What Is Health Insurance: Meaning, Benefits & Types

Health is one of the most important facets of your life, and it is in your best interest to have insurance that can cover you in case you face any health-related issues. Health insurance is one such financial product that can take care of the finances if you or your family members have a medical emergency. Health insurance is a crucial investment in today's world, where medical costs are on the rise, and healthcare has become expensive.

What is Health Insurance?

Health insurance is a type of insurance that provides financial coverage for medical expenses and treatments. It is a contract between the insured person and the insurance company, where the insured pays a premium in exchange for the promise of the insurance company to cover the medical expenses incurred by the insured person/persons. Having a health insurance policy gives you peace of mind in times of crisis and provides you access to quality healthcare services. Now that you may know what health insurance is , check out the features and coverages of health insurance offered by Bajaj Allianz: *

1. Coverage for pre- and post-hospitalisation charges
2. Coverage for in-hospital expenses, room rent and boarding expenses
3. Doctor's consultation fees
4. Ambulance charges
5. Cashless claim facility available at 6000 + network hospitals

Multiple customised health insurance plans are available to suit different sets of requirements, such as for individuals, family members, senior people, pregnant women, critical illness patients, and so on.

Types of Health Insurance

Are you wondering what the different types of health insurance policies are and what each health insurance policy is like? Here is a brief overview of the several types of health insurance policies available in the market, each with its features and benefits, so that you can choose which suits you the best.

1. Individual Health Insurance

This type of health insurance policy covers a single person and provides coverage for hospitalisation, medical expenses, and treatments. * It covers individuals who are 18 years of age and above. It offers sum insured options ranging from INR 1.5 lakhs to INR 50 lakhs and comes with a lifelong renewal facility. The premium for an individual health insurance policy is based on the age, health condition, and medical history of the insured person.

2. Health Guard Family Floater Plan

This family floater health insurance covers the entire family under a single policy. The SI (Sum Insured) options range from INR 1.5 lakhs to 50 lakhs with these plans for families. Policy term options offer extended coverage for up to 3 years. The premium for a family floater health insurance policy is based on the age, health condition, and medical history of the family members covered under the policy.

3. Critical Illness Insurance

Critical illness insurance is a type of health insurance policy that covers specific critical illnesses such as cancer, heart attacks, strokes, and kidney failure. * The policy pays a lump sum amount on the diagnosis of the critical illness, which can be used to cover medical expenses and loss of income.

4. Silver Health Insurance plan

This insurance plan is specifically designed to cater to the needs of the elderly. The entry age for this insurance plan is 46 years to 70 years with a lifelong renewal option. This plan provides the financial security you need in your later years by covering you for the medical treatments you require in your old age. *

5. Extra Care Plus Policy

It is an additional cover available to you, over and above your existing cover. This is a top-up plan that can prove beneficial in case you exhaust your SI during the treatment.* While these are a few of the plans that have been elaborated on here, there are many more plans and top-up covers, which you can check on our website. All the plans come with a fixed set of features, inclusions, and exclusions. It is best advised that you should thoroughly go through the policy wording to avoid any confusion while filing the claim. Now that you may know what health insurance is and the different types of plans offered, let us look at the benefits one can gain from health insurance.

Features of Health Insurance

1. Hospitalization Coverage

Health insurance covers medical expenses incurred during hospitalization, including room rent, doctor’s fees, surgery, and nursing charges. Some policies also cover daycare procedures that do not require 24-hour hospitalization.

2. Cashless Treatment

Many insurers offer a cashless treatment facility at network hospitals, allowing policyholders to receive medical care without paying upfront. The insurer settles the bill directly with the hospital.

3. Pre & Post-Hospitalization

Expenses incurred before and after hospitalization, such as diagnostic tests, consultations, and follow-up treatments, are covered for a specific duration, depending on the policy.

4. Ambulance Charges

Emergency ambulance services, including transportation costs to the nearest hospital, are covered under most health insurance plans, ensuring timely medical assistance.

5. No-Claim Bonus (NCB)

If no claims are made in a policy year, insurers offer a bonus in the form of an increased sum insured or a discount on the premium for the next renewal.

6. Critical Illness Cover

Some plans provide additional coverage for critical illnesses like cancer, heart disease, and stroke, offering a lump sum amount to manage treatment costs and financial needs.

7. Tax Benefits

Policyholders can avail of tax benefits under Section 80D of the Income Tax Act on premiums paid for themselves, spouses, children, and dependent parents. The deduction limit varies based on age.

8. Maternity & Newborn Cover

Certain policies include maternity benefits, covering delivery expenses, prenatal and postnatal care, and newborn medical costs, reducing the financial burden on expecting parents.

9. Lifetime Renewability

Most health insurance plans offer lifetime renewability, allowing policyholders to continue coverage without age restrictions, ensuring financial security in old age.

10. AYUSH Treatment

Alternative treatments such as Ayurveda, Yoga, Unani, Siddha, and Homeopathy (AYUSH) are covered in many policies, offering diverse healthcare options beyond allopathic treatments.

Benefits of Health Insurance

What is health insurance, and why is it important? In simple terms, health insurance provides financial support to cover medical expenses in times of need. Let’s explore the key benefits of having a health insurance policy:

1. Protection Against Rising Medical Costs

With the ever-increasing costs of medical care, having medical insurance safeguards your finances. From ambulance charges to daycare procedures, a health insurance card makes sure you get the care you need without worrying about hefty bills.

2. Cover for Critical Illnesses

Critical illness coverage is an added advantage of health insurance policies by reputed insurers like Bajaj Allianz General Insurance Company. The Health Gaurd Policy and similar plans typically include provisions for critical conditions. These plans generally offer comprehensive hospitalisation benefits that can help manage the financial burden associated with critical illnesses.

3. Hassle-Free Cashless Claims

Bajaj Allianz General Insurance Company has a tie-up with 18,400+ network hospitals, offering cashless claims for covered treatments. This feature eliminates the need for upfront payments during emergencies, ensuring smooth access to quality care.

4. Additional Individual Coverage

Relying solely on group insurance plans may leave you vulnerable. Individual health insurance policies provide enhanced coverage and ensure continuity, even if you change jobs or exit the group plan. With the right plan, you are able to protect both your health and finances, making it easier to focus on recovery rather than expenses.

What Is Long-Term Health Insurance?

There is another type of health insurance which you should know about. However, what differentiates this policy from other types is not the scope of coverage but the tenure. Are you wondering what like? Let us help. The shortest term offered for health insurance in India is one year. However, there is an option to get a health insurance policy for more than 1 year. You can extend the tenure of your insurance plan for up to 3 years, which offers you coverage for a long time and saves you from the task of yearly policy renewal. You might also earn some savings on your premium if you opt for a long-term policy. You can also take advantage of the cumulative bonus for each claim-free year. Most health insurance policies also provide cover for pre- and post-hospitalisation expenses, which have occurred 60 days prior to hospitalisation or 90 days after hospitalisation respectively. **

How Does Health Insurance Work?

By now, you may be clear on what health insurance is, its features and benefits, as well as various other aspects. Now, let us understand how the concept of health insurance works. Health insurance works on the principle of risk-sharing. When you purchase health insurance, you are expected to make premium payments on a regular basis to the insurance company. In exchange, the insurance company agrees to cover your medical expenses and treatments up to the sum assured. When you need medical care or treatment, you can approach any of the network hospitals associated with your health insurance plan. The hospital will send the bills to the insurance company, which will verify the bills and approve the claim. If the claim is approved, the insurance company will settle the bills directly with the hospital, and you do not have to pay anything out of pocket. If the claim is rejected, you will have to pay the medical expenses yourself.

Why Do You Need Health Insurance Now?

Simply knowing what health insurance is, may not be enough; one must also know its importance and significance in today’s world. Having health insurance is not mandatory in India as per the law, but it is a must-have for availing hassle-free medical treatment and handling your health care expenses. Here are some reasons why you need health insurance now:

1. Rising Medical Costs

A health insurance plan helps you deal with the finances when you or your loved ones undergo medical treatment. The costs of medical procedures and medicines are sharply rising, making even basic treatments out-of-reach for common people. Health insurance provides financial coverage for medical expenses and treatments, which can help you manage your expenses and reduce your financial burden.

2. Protects Your Savings

In the absence of health insurance, medical expenses can be a significant drain on your savings. Health insurance provides financial coverage for medical expenses, which can help you protect your savings and investments. Thus, health insurance becomes the best tool to minimise your out-of-pocket expenses, helping you keep your savings in reserve.

3. Cashless Hospitalisation

You may have heard the term ‘cashless health insurance’ and may be wondering cashless health insurance. It is a feature within health insurance wherein the hospital bills are directly paid for by the insurer. This feature can be accessed via network hospitals only. * With a large number of network hospitals spread throughout the country, we ensure that no matter where you are, you and your loved ones receive the best medical care without you having to pay hefty medical bills.

How to Choose a Good Health Insurance Plan?

Choosing the right health insurance plan can be a daunting task, given the number of options available in the market. Here are some factors to consider while choosing a good health insurance plan:

1. Coverage

The coverage offered by the health insurance plan is an essential factor to consider. Make sure that the plan provides comprehensive coverage for medical expenses and treatments, including pre and post-hospitalisation expenses.

2. Network hospitals

Check if the health insurance plan has tie-ups with a network of hospitals in your area. This can ensure that you have easy access to quality medical care and treatment.

3. Premium

The premium for the health insurance plan is an important factor to consider. Make sure that the premium is affordable and fits your budget.

4. Claim Settlement Ratio

* Check the claim settlement ratio of the insurance company before choosing the health insurance plan. A high claim settlement ratio indicates that the company has a good track record of settling claims and provides timely and hassle-free claim settlement.

5. Exclusions

Check the exclusions in the health insurance plan to understand what is not covered under the policy. Make sure that you are aware of the exclusions before signing up for the policy.

6. Co-payment and Deductibles

Co-payment and deductibles are the amounts that you need to pay out of pocket before the insurance company starts covering medical expenses. Check the co-payment and deductibles of the health insurance plan before choosing it.

What is the Difference Between a Mediclaim Plan and a Critical Illness Insurance Plan?

A standard mediclaim policy works on an indemnity basis. This approach shows how does health insurance work by covering your actual medical bills. If you undergo surgery or require hospitalisation, you can raise claims based on the treatment costs you have incurred during the whole duration. You also gain clarity on what is health insurance in practical terms, as mediclaim policies pay hospital bills directly (cashless) or through reimbursements. On the other hand, a critical illness plan covers specified life-threatening conditions like cancer or kidney failure. It has a lump sum payout of the sum insured once a covered diagnosis is confirmed. This enables individuals to settle financial obligations, which go beyond medical bills. Some use this payout on debts, household expenses, or lifestyle adjustments. This shows the more extensive health insurance meaning in financial planning. So, which is better? Both have their merits and depend on your personal situation. The first one is a plan that takes care of day-to-day medical spending, and a critical illness plan takes care of your finances in the event of a critical illness. A good health insurance definition should cover both- keeping the bill paid for any hospital stay but also giving some extra money should you receive a serious diagnosis.

What Is the Claim Process For Health Insurance?

Health insurance claims can be registered either offline or online. For offline claim registration, you can call on our toll-free number - 1800-209-5858, where our executive will guide you through the complete claim registration process. For online claim registration, you can follow the steps mentioned below:

1. Cashless claims

For cashless claims, you need to approach the network hospital with your policy details. The hospital will verify your details and send the pre-authorisation form to the insurance company. This form is scrutinised by the insurance company, and it conveys the policy coverage and details to the hospital if the claim is approved. The insurer might also send a query letter asking for more details from the hospital.

2. Reimbursement claims

If you do not go to a network hospital, then you will need to file a reimbursement claim. In this case, you need to collect all the required documents from the hospital and submit the same to the insurance company. The insurance company will then verify these documents and then decide to either approve or reject the claim. In case it finds that some of the documents are missing, it will intimate the same to you and begin the claim process after you send all the remaining documents. You can also opt for more than one health insurance plan and register the claim under multiple health insurance policies.

Conclusion

We hope this article has helped you understand what health insurance is and explained its importance. We recommend that you get yourself and your family members a suitable policy post thorough research and comparison to stay covered in the event of any medical emergency.

FAQs

What are the advantages of health insurance?

It will cover everything from sudden medical costs to cashless hospitalisation in-network hospitals and treatments such as surgeries or critical illnesses, which helps you and your dependents save money. It also protects your hard-earned savings in case something goes wrong.

How much health insurance do I need?

The amount of health insurance you need depends on several factors, like your age, medical history, dependents, and lifestyle. You should opt for a sum insured that can comfortably handle major treatments or surgeries without draining your savings.

What do you mean by pre and post-hospitalisation expenses in health insurance plans?

The pre and post-hospitalisation expenses accounted for in health insurance plans are costs incurred before admission and after discharge from a hospital. The expenses include tests, doctor consultations, follow-up treatments, and medicines related to your hospitalisation.

What is the meaning of waiting period in health insurance plans?

It is the time you must wait after buying a policy before certain illnesses or treatments are covered. Claims made for those conditions during this phase are not accepted by the insurer.

How to apply for Health Insurance?

You can go directly to Bajaj Allianz General Insurance Company and fill out paper forms or do it online. Fill out the application form, provide details of your medical history, choose the desired coverage, and make payment. Keep all necessary documents handy to speed up the approval process.

What is the best age for buying health insurance in India?

A general rule of thumb is that the earlier, the better. For all practical purposes, early adulthood is an ideal stage. Younger applicants often enjoy lower premiums and fewer exclusions. Starting early also helps you complete waiting periods before age-related health concerns may arise. * Standard T&C apply. ** All savings are provided by the insurer as per the IRDAI-approved insurance plan. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.