Benefits of Health Insurance

Health insurance is an utmost necessity that cannot be ignored in present times. Considering the different benefits it offers, it is hard to miss financial protection. But before you understand why it is so important, you must know: What is Health Insurance ? Health insurance is an agreement between the insurance company and you, the policyholder, to compensate for medical expenses. In India, the health insurance situation is different as compared to the global insurance sector. According to the report ‘Health Insurance for India’s Missing Middle’ by the NITI Aayog in October 2021, over 30% of the population, or 40 crore individuals, are devoid of any financial protection for health^[1]. Owing to the reinforced importance of health in a world dealing with the pandemic, the insurance growth rate has fuelled up. Economic Times even states the increase in the demand for health insurance by at least 30% after the second wave of the current pandemic^[2]. Even more surprising is the fact that more and more young professionals are realizing the benefits of health insurance.

What are the Benefits of Health Insurance?

This article mentions a complete list of benefits that a health insurance policy offers to help you decide your next purchase.

Comprehensive Medical Coverage

Health insurance plans are designed to offer a comprehensive medical insurance cover with which you no longer need to worry about managing steep treatment costs. It is the best possible solution to manage an unexpected hospitalisation or even a planned procedure without worrying about finances.

In-patient hospitalisation

In-patient hospitalisation refers to the treatment where the patient is admitted to the medical facility for at least 24 hours. All insurance policies are designed to cover in-patient hospitalisation in a policy.

Pre- and post-hospitalisation cover

Along with the treatment cost of hospitalisation, medical insurance benefits include pre as well as post-treatment expenses, which includes diagnosis charges and expenses for tests prescribed by a medical professional. On the other hand, post-hospitalisation cover provides financial assistance for the expenses that may be required after the actual treatment. Sometimes, the cost of medicines required can be high, and during these situations, a post-treatment cover helps. Generally, health insurance policies provide a 30-day cover for pre-treatment expenses, whereas a 60-day cover for post-treatment expenses.

Day-care expenses

Day-care procedures are surgeries that formerly required hospitalisation, but in today’s times, can be completed within a couple of hours. Improvement in medical technology, along with effective medicines and quality medical procedures, have made it possible. Alternatively, it is also known as short-term hospitalisation. Generally, the time required for a day-care procedure is anywhere above 2 hours, but less than 24 hours. The coverage for day-care expenses in health insurance insures minor treatments, which otherwise can be expensive.

Coverage for Critical illnesses

Illnesses that can be fatal and prolonged in nature such as heart ailments, renal failure, cancers of varying intensity are among the illnesses that are covered in a critical illness cover. Critical illness plans function differently when it comes to paying compensation. Here, the entire sum assured is paid in lumpsum by the insurance company on the diagnosis of the specified ailment. Such lumpsum pay-out provides financial support for treatment as well as other costs of medical support. A little-known benefit of a Critical illness insurance  is the cover for organ donation.

Room rent & ICU charges

The comprehensive coverage of a health insurance policy includes cover for room rent and ICU charges. Room rent charges are expenses incurred during hospitalisation for accommodating the insured at the medical facility. Depending on the illness, a patient may be either admitted to a regular ward, or ICU, or even an ICCU. Generally, there is a limitation on the amount of room rent that is covered by the insurance plan. Beyond such an amount, any expenditure towards room rent shall be required to be paid by the policyholder. *Standard T&C Apply

Cashless Treatment at Network Hospitals

Health insurance plans are purchased to avail financial protection for uncalled medical emergencies. Paying the medical bills at this time can be a bummer, and so can reimbursing them. So opt for a policy that offers a cashless claims facility. Via a cashless health insurance  plan, the treatment cost is directly paid by the insurance company to the hospital, thereby not requiring a significant cash flow from your end.

Domiciliary Cover for Home Treatment

Health insurance benefits include domiciliary cover, where the policyholder can avail treatment at home. It may be required due to a lack of medical facilities, or the severity of the illness that limits the mobility of the patient. Elderly individuals can benefit from this advantage of health insurance. The primary benefit of this feature in health insurance is to enable ailing individuals to get treatment when there are problems either with hospitalisation or with the movement or mobility of the patient.*

Ambulance Charges for Transportation of the Patient

Health insurance plans also offer the additional benefit of ambulance expenses that are covered in the policy’s scope. Here, any charges for transporting the patient using an ambulance are covered in the health insurance plan. Since these charges are high, especially in metro regions, it is best to have the safety net of a health insurance policy covering such expenses.*

Coverage for Pre-Existing Diseases

The advantages of health insurance include coverage for pre-existing diseases. An individual at the time of purchase might have some already existing illnesses like chronic diseases like heart conditions, cancer, and asthma, and the like. It is especially the case for elderly buyers of health insurance plans. These illnesses, already existing at the time of purchase, are known as pre-existing illnesses. When you purchase a health insurance plan, its coverage includes pre-existing diseases as well as future treatments for specified ailments. So, you need not worry about paying from your pocket for these treatments. However, one thing to note is that the insurance company generally levies a waiting period before which such illnesses are included in your policy, and you must check it before buying.*

Cumulative Bonus at Renewal

Not every policy tenure has claims made by the policyholder. In these situations, the insurance passes on the benefit of making no claim by raising the sum assured of your policy at renewal. This increase in sum assured is known as cumulative bonus and ranges between 10% to 100% of the sum assured and is a lesser-known benefit of health insurance plans.*

Lifetime Renewability

Lifetime renewability benefit in medical insurance allows the policyholder to renew their health insurance plan without any restriction on age. This comes in handy when you are covered with a family floater plan and the eldest member hits the upper age limit. In ordinary situations, the coverage would end, but with the lifetime renewability benefit of health insurance, you can enjoy continued renewal for your entire life. Also, for senior citizens, lifetime renewability alleviates any financial pressure of a medical emergency with a continued renewal of their insurance cover.*

Convalescence Benefit

Some illnesses require a longer duration for recovery than the period of hospitalisation. It can be due to the critical nature of the treatment or severity of the illness. That’s when convalescence benefit comes in handy. In such situations, the insurer pays a lumpsum amount towards the recovery cost and the duration of such period may range between seven or ten days. It can even help to compensate for the loss of income during the period of recovery.*

Option to Seek Alternative Forms of Treatment (AYUSH)

Health insurance benefits include coverage for alternative treatments where procedures belonging to the disciplines of Ayurveda, Yoga, Unani, Siddha and Homeopathy are covered. These treatments aren't a part of mainstream medicine. Health insurance plans provide additional coverage to offer a choice of treatment to the policyholder.

Daily Hospital Cash Allowance

During the period of hospitalisation, you won’t be able to work, leading to a loss of income. In this scenario, a cash crunch may arise with mounting hospital bills. Using the daily hospital cash allowance, you can overcome such a situation. The insurance company provides a specified amount for every day of hospitalisation, compensating for the loss of income.*

Facility for Medical Check-Up

Since illnesses come unannounced, a health insurance plan benefits by providing a facility for medical check-up. Generally, this facility is available annually and by using one, you can evaluate your health and seek any treatment at an early stage. Depending on your health insurance plan, the cost of a medical check-up shall be borne by the insurance company. Alternatively, in some cases, these costs are also reimbursed by the insurer.*

Coverage for Bariatric Treatments

Not all insurance companies provide cover for bariatric treatments, only a select few (which includes Bajaj Allianz General Insurance Company). Bariatric surgery is a medical procedure for treating obesity when standard weight-loss measures such as dieting, routine and rigorous exercise have been attempted but have not resulted in the desired effects.*

Sum Insured Restoration Benefits

The restoration benefit is a feature in health insurance plans that restores any used amount of claim to its original sum assured. Generally observed with family health insurance plans, it helps tackle recurring medical expenses for the same beneficiary or different beneficiaries. With the soaring treatment costs, exhaustion of sum insured would mean you need to pay from your own pocket for its treatment. But with the reload feature by your side, the sum assured gets reinstated to the original amount.* Restoration benefit is classified into two types, based on how the policy coverage is exhausted - complete exhaustion of the sum assured or partial exhaustion of the sum assured. In complete exhaustion, the entire sum assured must be exhausted; only then will the restoration benefit kick in. On the contrary, partial exhaustion requires only a part of the sum assured to be used up to restore it. It is essential to check which type of restoration benefit the insurance company offers when buying one.

Maternity Coverage & Newborn Cover

Health insurance benefits include coverage for pregnancy and childbirth costs. While motherhood is a new and magical experience, it may also come with medical complications. In such times, a health insurance plan can provide a financial shield, letting you focus on the treatment and not worry about the cost. In addition, maternity covers in health insurance policies also provide protection for new-borns as young as 90 days. One thing to remember - a detected pregnancy is considered as a pre-existing disease in maternity covers and hence, must be purchased beforehand.*

Add-On Riders

The benefits of a medical insurance cover also include the ability to customise your insurance cover using add-on riders. These riders are optional features that can be opted for to increase the scope of your health insurance policy. This way, one can customise their insurance policy to ensure additional coverage.*

Coverage of COVID-19

Other than compensating for treatments mentioned in the policy document, health insurance plans also extend to provide coverage for COVID-19. A circular by the Insurance Regulatory and Development Authority of India (IRDAI) in March 2020 declared all existing insurance plans to include coverage for COVID-19 and handle cases expeditiously^[3]. Thus, if you are seeking coverage against the virus, a health insurance plan will provide the necessary benefits.*

Wellness Benefits

The concept of wellness benefits lies in the adage ‘prevention is better than cure.’ Wellness benefits are in addition to the financial support health insurance policies provide. They can be in the form of concession in renewal premium, membership benefits to specified organisations, vouchers for booster and supplements, free of cost diagnostic checks and health check-ups, redeemable pharmaceutical vouchers, and more. It is a win-win situation when opting for a plan with wellness benefits, as it helps to keep you ahead of ailments.*

Tax Benefits under Section 80D

Not just financial cover, health insurance plans also provide tax benefits. These tax benefits are available in the form of a deduction. Any premium paid is eligible for deduction under section 80D of the Income Tax Act. The value of the deduction differs based on the age group, with a maximum amount of ₹50,000. The table below summarises the deduction that can be availed –  

Scenario	Maximum deduction in your return of income		Total deduction under section 80D
	For the policyholder, their spouse, and their dependent children	For parents, whether they are dependent or not
No Beneficiary is a senior citizen	Up to ₹ 25,000	Up to ₹ 25,000	₹ 50,000
The policyholder and other family members are below 60 years AND Parents are above 60 years	Up to ₹ 25,000	Up to ₹ 50,000	₹ 75,000
				Either the policyholder or any other family member has crossed the age of 60 AND Parents are also above 60 years	Up to ₹ 50,000	Up to ₹ 50,000	₹ 1,00,000

  Apart from the deduction for any premium paid, medical insurance benefits include deduction for preventive health check-up up to ₹5,000, which is a sub-limit under the above amounts. Tax benefits are subject to change in tax laws. Read more on tax savings for Section 80D Medical Expenditure . *Standard T&C Apply

Reasons Why You Need a Health Insurance Policy

Protection of your hard-earned savings:

Next, health insurance helps you shield your hard-earned savings. Imagine that you invest your savings in different investment avenues and a medical emergency in your family suddenly requires you to withdraw all those investments. A health insurance policy provides protection against such a situation where you no longer are required to liquidate your investment to pay for medical treatments.

Additional financial coverage above corporate insurance covers:

Health insurance is an essential security cover in the current times, and many corporates offer health insurance policies as an added prerequisite to the compensation offered. This additional employee benefit ensures the health of the employees. But a limitation to these plans is that they are valid only until the time you are associated with the employer. This means that your health insurance cover ceases to exist when the employment ends. Thus, at these times, personal medical insurance ensures coverage even after the employment ends.

Essential in combatting medical inflation

Lastly, medical inflation is constantly rising, thereby pushing up the treatment cost. Newer and advanced treatments along with the rising inflation are also some of the reasons for it. It can also be extremely difficult to save up for a medical emergency because of such rapid increases in treatment costs. The situation is so severe that about 7% of the individuals are pushed below the poverty line due to the indebtedness arising from medical expenses^[4]. With a health insurance policy by your side, you can avoid such unfortunate situations. Health covers help provide financial backing to manage the treatment costs.  

What Do You Need to Watch Out for When Buying a Health Insurance Policy?

Here are some of the considerations to remember when buying a health insurance policy:

Coverage of Network Hospitals

To avail the cashless facility, you need to make sure that the treatment is sought at one of the network hospitals. These network hospitals are medical facilities associated with the insurance company’s affiliated hospitals. It is essential to check whether your health insurance company has a wide coverage of network hospitals in your vicinity and also across the country. This would enable you to avail quality treatment without incurring significant expenses upon emergencies at home and the ones that may occur during domestic travel.

Selecting a Suitable Cover Based on the Medical Requirements

Further, it is essential to buy the right type of health insurance cover for the right beneficiary. For instance, a family floater plan which ‘floats’ among the different family members is essential if you are covered with a corporate insurance plan. This way, any change in employment does not expose you to financial risks caused because of ill-health. In addition, if you have elderly individuals to cover, health insurance for senior citizens can be a suitable insurance cover,  thanks to the higher entry age and treatments that may be required with old age. If none of the above insurance plans are suitable, you can buy an individual cover that offers protection for one beneficiary (you).

Exclusions

While health insurance policies offer coverage against a wide array of diseases and medical exigencies, there may also be some illnesses that would not be covered under the plan you’ve opted for. Hence, it is always advisable to read the policy wordings and clarify any doubts regarding exclusions before purchasing a policy.  

How to Buy an Online Health Insurance Cover?

Now that you know the comprehensive list of benefits of health insurance plans, it is necessary to understand how to purchase one. An online health insurance purchase is a straightforward and hassle-free process. Step 1: It starts with visiting the preferred insurance company’s website and locating the health insurance section. Step 2: You need to enter the necessary personal information, such as your age, gender, mobile number, etc. Step 3: Next, select a suitable cover from the various types of health insurance plans Step 4: Load add-on riders to enhance the policy scope. Step 5: Once you have finalised the type of policy, its different features and additional riders, you can make the payment to avail the insurance cover. However, before this step, do not forget to compare all policies to get the one that’s best for you.  

Some FAQs on Health Insurance Plans

1. How can I avail an affordable cover?

There are a myriad of insurance policies to choose from. While price is a significant consideration in the purchase decision, you can save more by investing in a health insurance plan at an early age. In addition, you can choose to optimise your insurance premiums using deductibles, co-pay and similar other policy terms that require you to contribute at the time of claim. Further, making use of a health insurance premium calculator can help to make thorough comparisons, not only based on price but also critical policy features.

2. Is my policy valid throughout the country?

It is one of the most commonly asked questions that surround a health insurance policy. Generally, health insurance plans are valid across India. As medical emergencies can occur in any part of the country, it is essential that you know about the geographical scope of the policy.

3. Can a person have more than one health cover?

Yes, there is no limitation on how many insurance plans you can purchase. In fact, buying more than one health cover is advisable as one policy can be a generalist plan that covers various ailments while the other one can be specific in nature covering critical illness or even pre-existing ailments.

4. Is there a waiting period to raise claims under health insurance plans?

Yes, all insurance plans generally levy a 30-day waiting duration where charges for medical treatment are covered after such a period. However, you must note that such a waiting period is not applicable to cases of emergency hospitalisation because of an accident.

5. What are the number of claims allowed in a policy tenure?

There is no limit on the number of claims that can be made in a health insurance plan. But, do make a note that the sum insured of your health insurance plan is the maximum amount of insurance claim that can be made. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.   Source: [1] https://www.niti.gov.in/sites/default/files/2021-10/HealthInsurance-forIndiasMissingMiddle_28-10-2021.pdf [2] https://health.economictimes.indiatimes.com/news/pharma/health-insurance-is-wealth-many-realized-after-2nd-wave/85790116 [3] https://www.irdai.gov.in/ADMINCMS/cms/whatsNew_Layout.aspx?page=PageNo4057&flag=1 [4] https://www.downtoearth.org.in/dte-infographics/india_s_health_crisis/index.html