Health insurance, as humans we are vulnerable to falling sick or getting a disease due to our hectic and stressful lifestyle. Sometimes even a minor change in weather can cause sickness. Health care of late is very expensive and more than the disease itself, it is often the cost of treatment that takes its toll on our peace of mind. The solution to these health-related expense worries lies in having a good Health Insurance Policy which covers medical expenses incurred during pre and post-
hospitalization. As per the IRDA regulations on Health Insurance, the insurance companies should have an entry age restriction for Health insurance policies. Hence almost all the health insurance plans do not have any restriction in the entry age. This means that an insured of any age can purchase a health insurance policy.
Similarly, almost all plans come with a Lifelong Renewability feature (again directed by IRDA) and this ensures once an individual is enrolled with an insurer, they can renew their policy till they are alive, either with the same insurance company or port their policy. They only need to ensure payment of renewal premium within the stipulated timeframe to ensure timely renewals.
The free look period is the time period provided to the insured during which they can review the terms and conditions of their newly purchased health insurance policies and if not satisfied can terminate the policy without penalties, such as surrender/closure charges. A free look period normally lasts 14 or more days (depending on the insurer), allowing the insured to decide whether or not to keep the insurance policy; if he or she is not satisfied and wishes to cancel, the policy purchaser can receive a full refund.
Insurance policies are legal contracts that grant rights and responsibilities to both the insurance company and insured policyholder. Hence if the insured is not satisfied with the terms and conditions of the policy purchased, they can cancel and return the policy within this specified period after receiving it, and premiums will be fully refunded. During the free look period, the purchaser can continue to ask the insurer questions regarding the insurance policy contract in order to better understand the policy.
Health is a human right. It’s accessibility and affordability has to be ensured by the Government but the escalating cost of medical treatment is beyond the reach of common man especially in Tier II and Tier III cities (Rural areas). Health care has always been a problem area for India, a nation with a large population and larger percentage of this population living in urban slums and in rural area, below the poverty line. Under this situation, one of the ways for the government to reduce funding and augment the resources in the health sector was to encourage the development of health insurance. Currently (according to the Health Vertical Specialist team at Cognizant Technology) some of the challenges being faced in the Health Sector are :
The India Healthcare Industry is estimated to row to $280 billion by 2020 from the $79 billion that was the size in 2012. This is despite the per capita spending on Healthcare in India (according to WHO Report 2012) amongst the lowest in the world.
You will note in the tables below (in the same study by the Global Actuaries), that India and China lag behind the other developed nations in terms of their Government’s allocation to Healthcare overall. In India this stand at currently around 2.9%, which China is slightly higher at 10.10%. But very importantly as a % of the overall GDP, the Health spends in India is around 5%, a marginal step ahead of China. But even then when we compare this to the largest economy like USA, the Government spend is a whopping 15.4% of their massive GDP. So there is a long way to go for India in the Healthcare space.
Health Insurance is a policy which covers the insured for Medical Expenses post hospitalization, whether it be a Sickness or Accident. This treatment could have major financial impact on the insured and their family and hence it is prudent for every individual to have sufficient Health Insurance in place. Some of the main coverages under the Health Insurance policy include:
The most important things to consider while choosing an optimum health insurance plan include:
Group Insurance Plan Coverage of Employees – this is typically a family floater coverage for all the members of the family. In this case, if the employee is leaving the organization, he/she can approach the existing insurance company and request them to offer a family floater for the family with the same sum insured limits. The only difference in this case will be that the premium payable will be higher than the Group policy offered by the employer and hence the insured will need to agree to pay the higher premium. Secondly and importantly, the insured should request the insurer to provide a pre existing continuity benefit under the new plan. This will avoid the insured and his family going back to a 48 month pre existing waiting period. For example, if the employee was employed for 2 years and covered under the Group Plan of the Employer, then he/she can request the insurance company to continue the waiting period already crossed and hence under the new plan, the waiting period will only be 24 months, rather than starting from the first month and having a 48 month waiting period all over again.
Individual Insurance Plans for Employees –this is a far more easier option where all the insured will need to do is to apply for a portability of the existing policy to the same insurance company or another insurer. Assuming that the individual premiums earlier were being paid by the employer, the individual will now be required to pay the premium after leaving the organization. This same process holds good for the dependent members also. Since the policies are ported from the earlier insurance plan, the pre existing waiting period continuity will be ensured.
The health insurance sector is easily one of the fastest growing segments in the insurance space in India. Ever increasing medical costs and increasing awareness levels are contributing to this growth, especially over the past few years. India is one of the most uninsured markets across the world with less than 20% of the population having some type of insurance coverage and in rural areas this falls to as low as 15%. Given this growth of health insurance, the industry is seeing significant changes in the range of plans which insurers are offering to customers. This is precisely why the IRDAI also offered licenses to insurance companies only focussed on Health Insurance, known as Standalone Health insurance companies (SAHI). These SAHI companies are leading the product innovation game and are at the forefront of unique product launches. So one shouldn’t be surprised to see a diabetes care or plans specially designed for cardiac patients. As mentioned earlier, the rising cost of medical treatments, inflation and the increased incidence of diseases (given the sedentary lifestyle) today have made health insurance a much needed insurance policy. A health insurance plan covers hospitalization expenses of the insured. Some of the more popular plans are :
This is clearly to most popular and preferred insurance policy. Also known as “Mediclaim” these policies compensate the policyholder by reimbursing the actual hospitalization costs incurred by him/her subject to a maximum opted Sum Insured. The word ‘indemnity’ means compensation for losses or damages and hence this plan covers hospitalization cost, pre and post hospitalization cost, expenses on surgeries, ambulance costs, etc. Under the Indemnity Plan, the insured can opt for an Individual Policy or a Family Floater policy depending on their requirement.
A top-up health insurance policy is an additional coverage for insureds who have an existing individual plan or a medi-claim provided by their employer. These plans increase the insured’s coverage amount at lower incremental premium costs. Top-up plans can be taken as supplementary plans for enhancing the coverage if the existing plan does not provide adequate coverage. Each top up plan has a deductible limit in the plan which is the minimum sum insured up to which the plan will not provide cover to the insured. If the claim exceeds the deductible limit, the plan is triggered and the excess claim amount above the deductible sum insured is paid.
Also known fixed benefit plans, they pay a specific fixed sum insured amount for a claim irrespective of the actual expense incurred by the insured. For instance, in the event of a Critical Illness, if the SI is ₹2 lacs, the policy will pay the insured ₹2 lacs on diagnosis of the Critical Illness irrespective of whether the insured spent ₹1 lac or ₹5 lacs for the treatment of the illness. Some benefit plans include:
These are specific plans offering coverages relating to only specific illnesses like Cardiac Care or Diabetes Care. So if a Diabetic wants to avail of a Health Insurance plan, regular plans will not offer coverage since diabetes will be treated as a pre existing condition. But under a Diabetes Plan, the insured even with a pre existing Diabetes condition will be offered coverage. Similar is the case for Cardiac Care. Persons with heart related complications can purchase this plan.