Health insurance acts as a financial shield and covers your medical expenditure in case you fall ill. Pay your premiums on time and the policy gives coverage to the policyholder subject to fulfillment of other terms and conditions. Fixed benefit health insurance policies pay a fixed amount of money following a claim and without any submission of bills from the policyholder, while traditional policies provide reimbursement for the money spent on actual medical treatment. Health insurance in India is offered by general insurance companies and life insurance companies.
Difference between Mediclaim Insurance and Fixed benefit health insurance plans
Mediclaim Insurance policies are indemnity-oriented plans. They reimburse the policyholder the cost of medical expenses up to the sum assured. The policyholder is required to submit hospital bills detailing the actual expenses incurred, and a successful claim can be either cashless i.e. directly to the healthcare provider, or to the policyholder as a repayment. These policies may have some limitations while providing cover for critical illnesses, heart and cancer disease which may require special health insurance cover or fixed benefit cover plan.
In comparison, fixed benefit health insurance plans give you cover against specific diseases or conditions including heart ailments and cancer. These new-age policies give you the claim amount on first diagnosis irrespective of the actual medical costs. You don’t need to find a network hospital or file for reimbursement claims. This is because fixed benefit health insurance plans send you the cover amount as soon as a diagnosis is made. So, you can get treated at a hospital of your choice.
|Mediclaim Insurance||Fixed benefit Health Insurance|
|Mediclaim insurance extends to expenses incurred before and after, and during hospitalisation.||Fixed benefit health insurance pays a defined amount of funds, irrespective of treatment costs, for a pre-determined illness or condition.|
|Mediclaim insurance claims are usually processed based on diagnostic reports, written consultation with doctors, discharge card, treatment bills, medicine bills and other documents.||Claims under fixed benefit health insurance plan are usually processed based on diagnostic reports confirming the insured illness or condition. There is no hassle of submitting bills, documents and other expenses to the insurance company.|
|Mediclaim insurance policies reimburse you/healthcare provider for the expenses actually incurred up to the sum assured limit.||Fixed benefit health insurance plans pay a fixed lump sum amount, regardless of your actual expenses.|
|Mediclaim insurance plans provide cashless facility i.e. direct reimbursement to healthcare provider, only at network hospitals. In non-network hospitals, you have to pay and the insurer will reimburse later.||Fixed benefit health insurance plans pay the money to the policyholder directly, often even before treatment starts.|
|Mediclaim insurance plans usually do not pay any assured monthly payout if the policholder is diagnosed with any major illness/condition.||On the diagnosis of a predetermined major condition/illness, some fixed benefit health insurance plans will pay the policyholder a portion of the base Sum Assured every month for a fixed period of time.|
|Some health insurance plans require you to pay a part of your expense, while the rest is paid by the insurer.||Fixed benefit health insurance plans do not require you to pay any part of the defined amount.|
Why do you need a health insurance plan?
- Medical emergencies - They can cause huge financial burden to people if they do not have health insurance. The cost of medical treatment rises each year and there are several disease which need extremely expensive treatment. Health insurance can cover your treatment expenses in such cases.
- Increase in medical costs - Healthcare treatment costs are rising. Total cost of cancer treatment can be `23 lakh* if you include chemotherapy, targeted therapy and PET scans. Heart ailments can cost `20 lakh including surgeries and post hospitalization follow-up. You need an alternative way to get treated. This is where regular health insurance helps.
- A necessity - In today’s economy, one cannot rely solely on traditional avenues like family support and emergency savings. The high cost of medical treatment has made health insurance a necessity for your health and financial security.
Why do you need a fixed benefit health insurance plan?
- Extra protection - Regular health insurance policies can provide you with financial relief when you have incurred treatment charges. Fixed benefit health plan works as a filler to pay for any possible expense that is not covered by the regular health insurance plan.
- Timely treatment - Early intervention is more likely when you have fixed benefit health insurance. With a regular insurance plan, a high medical expenditure most often prompts people to delay their treatment. This wait can lead to the condition becoming more serious, and even life-threatening.
- Complete freedom - Since the payment is based on diagnostic report, you are 100% free to choose the place, time and medium of treatment.
When should you buy health insurance?
- Start early: The earlier you buy health insurance, the lower your premium will be. Starting early will also end the exclusion periods for pre-existing conditions early. These periods commence from the time you have bought the insurance policy and hence the earlier you buy one, the better.
- Don’t rely on your employer: Many people skip buying health insurance because they are covered by a company policy. However they fail to note that the coverage will be withdrawn when they move to a different organisation or into self-employment. Buying a health insurance at this stage is a lot more expensive because you are likely to be older at the point of moving to your second job/new venture. Health insurance premiums shoot up with age.
- To save tax^: Health insurance premiums are eligible for deductions from taxable income up to `25,000 per annum under Section 80D of the Income Tax Act, 1961. In case of parents additional deduction upto `25,000 is available (if age of insured is 60 years or above deduction allowed is `50,000). These limits include deduction of `5,000 for preventive health check-up. If you are paying premiums for yourself and parents who are senior citizens, you can avail of the combined deduction up to `25,000 + `50,000 = `75,000 per annum. If both you and parents are senior citizens, you can avail of the combined deduction up to `50,000 + `50,000 = `100,000 per annum. These deductions are available each year and cannot be carried forward. Hence, starting early will help you maximise the benefits of these deductions.
How to choose the best health insurance plan?
In order to determine this, you need to look at a range of factors:
- Premium Charged: Price is an important component of your selection process, but not the only one. Certain policies may have higher premiums but may offer additional benefits. Also, fixed benefit health insurance plans come with a range of discounts that lower premium. For instance, you can get up to 9% disciount while buying ICICI Pru Heart/Cancer Protect. Covering your spouse with an independent cover gets 5% off*** on the combined premium, additional 2% discount if you buy the policy online. and there is 2% more discount on the combined premium (For Heart and Cancer) if you take both Heart and Cancer cover.
- Expenses Covered: When buying a regular health insurance plan, check whether your policy is covering pre and post hospitalisation expenses. Also, check if there are room rent caps. A room rent cap is a ceiling on the amount your policy will pay you for room rent charges when you are in a hospital. For fixed benefit health insurance, do check the amount paid in case of minor conditions/illnesses. Also, look at whether policy offers add-on covers like hospital cash benefit, increasing cover benefit, and income benefit.
- Claim Settlement Ratio: This figure tell you what proportion of insurance claims are paid out by the company. Other things being equal, a higher claims settlement ratio is better than a lower one. For instance, ICICI Prudential Life Insurance’s Claims Settlement Ratio^^ for FY2019-20 is 97.8%.
- Claim processing time: Health insurance claims are the reason why you are buying a policy. The best policy should have quick and transparent claims experience. During FY2017-18, ICICI Prudential Life Insurance’s average turnaround time for settling a claim is 2.99** days. As much as 67% of claims were settled within 3 days. Also, we have settled 96.43%~ of claims received within 30 days of intimation.
- Exclusions: Health insurance policies exclude certain diseases and ailments. It may also have certain waiting periods - only claims made after the waiting period are paid out. Check if these conditions and exclusions apply to your policy and to what extent.
Health Insurance Plan By ICICI Prulife
ICICI Pru Heart and Cancer:
- As the name suggests, this plan covers heart ailment and cancer.
- It pays out a fixed sum on the diagnosis of any of these diseases1.
- This policy also offers you the option to boost cover# by 10% for each claim-free year upto maximum of 200% sum assured opted at inception.
- It provides an option to get additional benefit## of 1% of base sum assured, every month for 5 years in case of any major condition as a substitute for loss of income. You can get a discount*** if you buy cover for yourself and your spouse.
- In case of a minor condition or permanent disability due to accident or a minor/major condition where cancer cover and heart cover are chosen together, future premiums are waived but the policy cover is kept intact.
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**The average TAT is calculated from the last document received to payment disbursal date for non-investigated claims.
~The percentage of claims settled within 30 days is computed as follows: Number of individual claims settled within 30 days (10,816) ÷ Total number of Individual claims settled (11,216) × 100
* page 9 and 10 : https://www.iciciprulife.com/content/dam/icicipru/brochures/heart_and_cancer.pdf
*** These discounts are not available with single pay policies.
^^ Claim statistics are for FY2019-20 and is computed basis individual claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our Website.
#In the Increasing Cover Benefit, the Sum Assured chosen at inception increases by 10% simple interest on each policy anniversary, for every claim free year. The maximum Sum Assured under the cover will be capped at 200% of the Sum Assured chosen at inception.This increase in Sum Assured will stop on occurrence of first claim under the cover. Where Cancer cover and Heart cover are chosen together, the Sums Assured for both the covers increase by 10% simple interest on each policy anniversary, for every claim free year. The maximum sum assured will be capped at 200% of the Sum Assured chosen at inception for each type of cover. In case of occurrence of first claim under any one type of cover, the increase in Sum Assured will stop for that cover type and Increasing Cover Benefit will continue for the other type of cover, for which no claim has occurred.
## Under the Income Benefit, the Sum Assured has to be chosen at inception of the plan. An amount equal to 1% of the Sum Assured chosen at inception will be paid to the policyholder each month, for a period of 5 years upon a valid claim under any of the listed Major conditions. Where the Cancer cover and Heart cover are taken together, pay out under Income Benefit will be triggered for only that cover for which a claim of Major condition is registered and all Benefits through other cover remains unaffected.
1 Only doctor’s certificate confirming diagnosis needs to be submitted. The benefit is payable only on the fulfillment of the definition of the diagnosed level of listed condition
^Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
ADVT NO: W/II/3661/2018-19