Even the healthiest of individuals can fall sick without warning and require expensive medical treatments. In such a scenario, being financially unprepared to tackle the costs of the necessary medical procedures is not an option. This is where comprehensive health insurance plans come into play, to ensure the financial comfort of your family and you. Here is an in-depth look at this handy financial tool that has helped many individuals heave a sigh of relief in their hour of need.
What are health insurance plans?
Health insurance plans reimburse insured customers for their medical expenses, including treatments, surgeries, hospitalization and the like which arise from injuries/illnesses, or directly pay out a certain pre-determined sum to the customer. A health insurance policy offers coverage for any future medical expenses of the customer.
This is an agreement between the insurance company and the customer where the former agrees to guarantee payment/compensation for medical costs in case the latter is injured/ill in the future, leading to hospitalization. In most cases, insurance companies have tie-ups with a network of hospitals, thereby ensuring cashless treatment for patients there.
What is the need for health insurance?
Popular US politician, Jan Schakowsky, said that ‘Without health insurance, getting sick or injured could mean going bankrupt, going without needed care, or even dying needlessly.’ Nothing could be truer!
Here is why you need health insurance:
- Health insurance pays for future illnesses/medical treatments without depleting your savings or negatively impacting your family’s financial future.
- Medical costs are increasing rapidly and for those with insufficient savings, affording medical care becomes a problem during emergencies.
- Cashless treatment possible with network hospitals while reimbursements are given by insurance companies in other cases.
- Health insurance plans offer coverage for several types of ailments and surgeries along with other aspects of medical treatment.
- Health insurance keeps you and your family worry free; you only have to pay a small premium for the same.
- In many cases, you also get coverage for hospitalization costs, ambulance costs, consultations, medicines, tests and post-hospitalization expenditure.
What are the kinds of health insurance plans available?
There are several kinds of health insurance plans. Here are the main ones:
- Individual plans-These are basic health insurance plans, covering the hospitalization costs of the person insured.
- Family plans-These are health insurance plans where all family members can be included in a single coverage model. In this case, a fixed sum assured is provided for any family member who falls ill.
- Senior citizen plans-These are special insurance policies designed to meet the needs of senior citizens who are above 60 years of age.
- Critical illness insurance plans-These plans cover specific critical illnesses such as kidney ailments, heart attacks and so on. Cancer insurance and other plans included in this section as well.
- Personal accident insurance-These plans offer coverage for hospitalization in case of any motor accident.
- Maternity plans- These policies offer coverage for pre and post natal medical care and delivery expenditure. They also offer coverage for the new-born for a certain duration along with ambulance costs.
- Unit-linked health insurance plans- These plans offer health insurance coverage while also helping build savings to meet those costs which do not have coverage under the policy. These are insurance-cum-investment plans that help you accumulate corpus.
Key Benefits of Health Insurance Plans
There are several benefits offered by health insurance plans, including the following:
- Coverage for pre and post hospitalization expenses-Insurance policies usually offer coverage for expenses both before and after hospitalization up to pre-specified durations/limits.
- Cashless facility-If you are getting treated at a network hospital, you can get hassle-free cashless treatment under your insurance plan.
- Ambulance and transportation costs-Ambulance charges and other transportation costs of the person insured are also covered under health insurance policies.
- No-Claim Bonuses-These bonuses are earned by the person insured in case no claims are filed for treatments in a particular year.
- Room rent coverage-Room expenses are also covered by insurance policies and this is dependent on the premium paid by the customer.
- Medical check-ups- Insurance policies also offer coverage for periodic health check-ups. Some companies even offer free check-ups on the basis of earlier no-claim bonuses.
- Tax benefits- You can get deduction up to `25,000 from taxable income of health insurance premiums paid under Section 80D of the Income Tax Act. The maximum deduction limit for senior citizens is `50,000.
Fixed Benefit Health Insurance Plans
Fixed benefit health insurance plans pay out a certain amount/sum upon the occurrence of any particular pre-specified event that is covered by the policy. For instance, a critical illness plan will involve the payout of a guaranteed/assured lump sum upon diagnosis of any critical illness covered under the health insurance policy.
Why should you buy Fixed Benefit Health Insurance plans?
- Lump Sum Payout- Fixed benefit health insurance plans pay out a lump sum amount upon diagnosis of any disease/ailment covered under the same. This helps you take care of treatment and other costs right from the outset without financial worries. Payouts are made irrespective of the cost of treatment.
- No Worries of Sub Limits- Many health insurance plans come with sub limits in terms of room rent, hospitalization expenses and so on. With fixed benefit health insurance plans, you receive a lump sum payout upon diagnosis of a particular illness without having to bother about sub limits and so on.
- No Hospital Bills Required- Unlike other health insurance plans, fixed benefit health insurance plans pay upon diagnosis of the illness without the hassle of submitting hospital bills.
- Get treated anywhere in the world- Since you get a lump sum payout upon diagnosis, you need not be admitted to a network hospital for cashless treatment. You can opt for treatment anywhere in the world as per your own preferences and convenience.
- Affordable and fixed premiums- You can get higher coverage for premiums that are affordable. Premium amounts also remain fixed for the entire duration of the policy.
- Tax Benefits- You can avail of tax benefits under Section 80D of the IT Act on the premiums you pay on these policies. Maximum amount of deduction from taxable income is `25,000 for you and your family (children and spouse) if you are less than 60 years old. If you are all more than 60 years old, the maximum deduction can increase to `50,000. The same is applicable for premiums that you pay for your parents, i.e. a maximum deduction of `25,000 if they are below 60 years of age and `50,000 if they are above 60 years of age.
Fixed Benefit Health Insurance Plans Online in India by ICICI Prulife that are Worth Checking Out
| ICICI Prulife Heart/Cancer Protect | Life and Health Option with ICICI Pru iProtect Smart |
|---|---|
| Coverage against heart ailment and Cancer. | Coverage against 34 critical illness with life cover. |
| Claim amount paid out upon first diagnosis of any of the listed minor/ major condition irrespective of actual costs of medical treatment. | Payout upon first diagnosis of any critical illness covered under policy. |
| High coverage amount for comparatively lower premium, i.e. Rs. 20 lakhs coverage at Rs. 387 per month1. | Longer coverage of up to 30 years is offered. |
| 5% discount on first year premium when you buy health cover for yourself and spouse2. | Special premium rates for women and coverage for female organ cancers such as cervical and breast cancer. |
| Waiver of premium in case of minor claim or on diagnosis of permanent disability due to accident. | Premium waiver in case of permanent disability due to an accident. |
| A 10% increase in sum assured if it is a no claim policy year. | |
| 1% of sum assured paid out as additional income for five years after a major condition. This is over and above the lump sum payable. | |
| Lump sum payout of critical illness benefit without needing any hospital bills. | |
| 25% of lump sum payout in case of minor condition diagnosis and 100% payout in case of major condition diagnosis post deduction of any previous payouts on minor claims if applicable. | Premium remains fixed for whole tenor of the policy term. |
As can be seen, health insurance is a basic need that cannot be ignored. Assess your current financial situation and future needs to choose the best policy for yourself and your family now!
1. How much does health insurance cost for an individual?
Health insurance costs are a function of your age, coverage amount and health status. For instance, if your age is 20 years, the health insurance cost in form of premium will be lower than somebody is 50 years of age. For instance, a 20 year old buying ICICI Pru Heart & Cancer Health Insurance will pay a premium of Rs 119 per month (including taxes) for a Rs 20 lakh cover for 20 years. But a 50 year old for the same cover and duration will shell out Rs 1652 per month (including taxes). Do note that the premium cost goes up if you are a smoker since they are prone to more health risks. A 20 year old male who smokes will pay Rs 132 per month for Rs 20 lakh cover for 20 years as premium, about 11% more than a non-smoker.
2. What are the things to look for while choosing a health insurance plan?
The best health insurance policy depends on your specific needs. There are a few important factors that one must look at while choosing a health insurance plan-
i) Payout mechanism - Whether payout happens on diagnosis, or on actual hospitalization
ii) Claim Process - Claim process should be simple, fast and efficient involving minimum discomfort to policyholder/family
iii) Waiting Period - The best plans will have minimal waiting period before you can claim for a pre-existing cover
iv) Adequate cover - With health costs on the rise, the best health plans will give maximum cover at an affordable cost
v) Pre/post hospitalization benefit - Some health plans have limits related for pre and post hospitalization expenses and so you must be aware of them before buying.
3. Does health insurance provide tax benefits?
Yes, paying health insurance premium every year can lower your annual tax liability. Health insurance premium paid can be used to claim deduction under Section 80D^. An individual can claim a deduction of up to `25,000 for the insurance of self, spouse, and dependent children. An additional deduction for the insurance of parents is available. This is to the extent of `25,000, if the parents are less than 60 years of age. The additional deduction can be up to `50,000 if the parents are aged above 60.
4. Do health insurance plans cover diagnostic charges like X-ray, MRI or ultrasound?
Yes, the health insurance cover usually pays for them as long as patient is hospitalized for at least 24 hours and such tests have been prescribed. Such tests done out-patients are not always covered, unless specified in the policy#. Please read your health insurance policy document to find out. In ICICI Pru Heart & Cancer health insurance, you get upfront payment for covered ailments, which means you can use them to pay for X-ray, MRI, Ultrasound, nurse and therapy related charges/tests pre and post hospitalization at your own choice.
5. What are the documents required for buying a health insurance plan?
Generally, the following documents are required to buy health insurance
i) Age proof
ii) Identity proof
iii) Address proof
iv) Some plans may require medical check-up reports, usually for people above the age of 45
v) Passport size photo
6. What is the right age to get health insurance?
The earlier you get health insurance, the lower is your premium amount. For instance, if a 20 year old person buying `20 lakh cover for 20 years delays buying ICICI Pru Heart & Cancer plan and buys it at 50 years age, he/she will pay nearly 14x premium for the same coverage and policy term. Even a 5 year delay for a 20-year old leads to 33% more premium, while a 10-year delay pushes premium cost by almost 98%.
If you wait to buy health insurance policy at later stages of life, you might be deprived of immediate coverage due to waiting period$. So, it is better to buy health insurance as soon as you meet the minimum entry age requirements for the policy.
7. Can a person have more than one health policy?
Of course, you can have more than one health policy. Many people have a separate health insurance policy apart from the health cover provided by their employer. You may use the second policy if you exhaust the health cover in the first one.
1. How much does health insurance cost for an individual?
Health insurance costs are a function of your age, coverage amount and health status. For instance, if your age is 20 years, the health insurance cost in form of premium will be lower than somebody is 50 years of age. For instance, a 20 year old buying ICICI Pru Heart & Cancer Health Insurance will pay a premium of Rs 119 per month (including taxes) for a Rs 20 lakh cover for 20 years. But a 50 year old for the same cover and duration will shell out Rs 1652 per month (including taxes). Do note that the premium cost goes up if you are a smoker since they are prone to more health risks. A 20 year old male who smokes will pay Rs 132 per month for Rs 20 lakh cover for 20 years as premium, about 11% more than a non-smoker.
2. What are the things to look for while choosing a health insurance plan?
The best health insurance policy depends on your specific needs. There are a few important factors that one must look at while choosing a health insurance plan-
i) Payout mechanism - Whether payout happens on diagnosis, or on actual hospitalization
ii) Claim Process - Claim process should be simple, fast and efficient involving minimum discomfort to policyholder/family
iii) Waiting Period - The best plans will have minimal waiting period before you can claim for a pre-existing cover
iv) Adequate cover - With health costs on the rise, the best health plans will give maximum cover at an affordable cost
v) Pre/post hospitalization benefit - Some health plans have limits related for pre and post hospitalization expenses and so you must be aware of them before buying.
3. Does health insurance provide tax benefits?
Yes, paying health insurance premium every year can lower your annual tax liability. Health insurance premium paid can be used to claim deduction under Section 80D^. An individual can claim a deduction of up to `25,000 for the insurance of self, spouse, and dependent children. An additional deduction for the insurance of parents is available. This is to the extent of `25,000, if the parents are less than 60 years of age. The additional deduction can be up to `50,000 if the parents are aged above 60.
4. Do health insurance plans cover diagnostic charges like X-ray, MRI or ultrasound?
Yes, the health insurance cover usually pays for them as long as patient is hospitalized for at least 24 hours and such tests have been prescribed. Such tests done out-patients are not always covered, unless specified in the policy#. Please read your health insurance policy document to find out. In ICICI Pru Heart & Cancer health insurance, you get upfront payment for covered ailments, which means you can use them to pay for X-ray, MRI, Ultrasound, nurse and therapy related charges/tests pre and post hospitalization at your own choice.
5. What are the documents required for buying a health insurance plan?
Generally, the following documents are required to buy health insurance
i) Age proof
ii) Identity proof
iii) Address proof
iv) Some plans may require medical check-up reports, usually for people above the age of 45
v) Passport size photo
6. What is the right age to get health insurance?
The earlier you get health insurance, the lower is your premium amount. For instance, if a 20 year old person buying `20 lakh cover for 20 years delays buying ICICI Pru Heart & Cancer plan and buys it at 50 years age, he/she will pay nearly 14x premium for the same coverage and policy term. Even a 5 year delay for a 20-year old leads to 33% more premium, while a 10-year delay pushes premium cost by almost 98%.
If you wait to buy health insurance policy at later stages of life, you might be deprived of immediate coverage due to waiting period$. So, it is better to buy health insurance as soon as you meet the minimum entry age requirements for the policy.
7. Can a person have more than one health policy?
Of course, you can have more than one health policy. Many people have a separate health insurance policy apart from the health cover provided by their employer. You may use the second policy if you exhaust the health cover in the first one.
1. The premium rate is of `10 lakh Cancer cover and `10 Lakh Heart cover for 35 year healthy male for policy term of 20 years and inclusive of tax.
2. A discount of 5% on the first year’s premium will be offered on purchase of ICICI Pru Heart / Cancer Protect when life assured and his/ her spouse is covered under the same policy. The policy benefits of both the Lives Assured shall be independent of each other. The Sums Assured of both the lives could be different. A claim made by one Life Assured under the policy does not affect benefits of other Life Assured. This Family benefit has to be chosen at the inception of the policy only, spouse cannot be added once the policy is issued. This discount is not applicable on Single Pay Policy. With one policy, you can avail either Family Benefit or Loyalty Benefit.
^Tax benefits under the policy are subject to conditions under Section 80D 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.
$A waiting period is the amount of time an insured must wait before some or all of their coverage comes into effect. The insured may not receive benefits for claims filed during the waiting period. Source: https://www.investopedia.com/terms/w/waiting-period.asp
#Source - https://www.insuranceinbox.com/health-insurance/health-guide/faq/does-health-insurance-cover-diagnostic-charges-like-x-ray-mri-or-ultrasound
COMP/DOC/Aug/2019/88/2581.
