Insurance, by definition, is morbid. What if I die suddenly? What if my home caught fire? What if I had to undergo expensive medical treatment? What if something that I thought happened only to others befell me?
Insurers, who work with large samples, calculate the probability of such an event and, hence, the possibility of them having to pay out a sum of money to mitigate, to the extent possible, the effects of that disaster.
However, the possibility of you undergoing some kind of expensive medical treatment during your lifetime is far more likely than you dying suddenly or your house burning down. Given that costs at private healthcare facilities, where you are most likely to land up, is high, and, doubling every four years 10 months or so, the rest of your money life could easily go out of whack if you had to incur such expenses.
Just 12 per cent of India's population is covered with some sort of health insurance. Pared to the bone, for a comparatively small price, health insurance provides you the money you need, and you do not have to undergo expensive medical treatment of some varieties, mainly involving hospitalisation.
The basic type is an indemnity cover, i.e., the insurer only reimburses costs. As cost is the primary point of pain, there's sense in buying it.
CHECK to know about the different plans on offer...
What's on offer?
Once you have decided to buy health insurance, the next step is to try to figure out what you want to buy, and from whom.
This is the tougher bit, for there is a bewildering array of products in the market. Earlier, only general insurance companies sold such covers.
With 21 of them in the market, including three pure health insurance companies, it was bad enough. As nine more life insurers are offering health insurance covers, finding the solution has become the problem.
Let's take a look at the kinds of health insurance covers on offer.
Individual Health PlansPlan Name
Apollo Munich Health InsuranceEasy Health
Bajaj Allianz General InsuranceHealth Guard
Cholamandalam MS Gen. Insurance Chola Health Insurance
HDFC ERGO General Insurance New Healthwise
ICICI Lombard General InsuranceHealth Advantage Plus
IFFCO Tokio General Insurance Individual Medishield
National InsuranceMediclaim
Reliance General InsuranceIndividual Mediclaim
Royal Sundaram Alliance Insurance Health Shield Online
Star Health and Allied Insurance Medi Classic
The Oriental Insurance Individual Mediclaim
United India Insurance Mediclaim
The New India Assurance Mediclaim
Family FloaterPlan Name
Apollo Munich Health InsuranceEasy Health
Bajaj Allianz General InsuranceInsta Insure
Cholamandalam MS Gen. InsuranceChola Family Health
HDFC ERGO General Insurance Family Floater
ICICI Lombard General InsuranceComprehensive Health Plus
National InsuranceParivar
Reliance General InsuranceHealth Wise Policy
Royal Sundaram Alliance Insurance Family Health Floater
Star Health and Allied Insurance Medi Classic
The Oriental Insurance Family Health Floater
Critical Illness PlansPlan Name
Bajaj Allianz General InsuranceCritical Illness
ICICI Lombard General InsuranceCritical care Insurance
IFFCO Tokio General InsuranceCritical Illness
National Insurance Critical Illness
Tata AIG General InsuranceCriticare
Senior Citizens PlansPlan Name
Bajaj Allianz General InsuranceCritical Illness
National Insurance Varistha Mediclaim
Star Health and Allied InsuranceSenior Citizen Red Carpet
The Oriental Insurance Hope
Individual health plan. These are the so-called 'traditional' health insurance covers, commonly known as 'mediclaim' policies. They mainly cover hospitalisation expenses provided it is for at least 24 hours. The expenses for hospital bed, nursing, surgeon's fees, consultant doctor's fees, cost of blood, oxygen and operation theatre charges are the usual inclusions.
However, unlike the past, most plans now come with sub-limits for each of these heads. They usually do not cover pre-existing diseases or complications arising from them for the first four years of the policy. Besides, claims for specific ailments may not be allowed in the first or second year. For every claim-free year, most plans add 5 per cent to the sum insured.
Family floaters. These can be seen as agglomerations of IHPs for a family. The benefits remain largely the same, but the sum insured can be availed by any or all members of the family and not a single person. Rather than buying, say, a Rs 200,000 health cover for each member of the family of four by spending for a total cover of Rs 800,000, if you bought an FF for Rs 800,000, each person covered under it can avail benefits up to Rs 800,000 as opposed to Rs 200,000 in the earlier instance.
This reduces the need for you to pay from your pocket. Also, it comes at a lower premium than otherwise. A FF can be bought by an individual who becomes the proposer along with spouse, dependent children up to 25 years or even unmarried, divorced, widowed daughter and dependent parent. Even a parent-in-law can be covered.
Critical illness plan. This is not a substitute for a 'mediclaim', but you should ideally add this layer to the latter. It provides financial assistance if the insured develops a serious ailment, such as cancer, or has a stroke. Each cover has a list of ailments, usually 9-12 of them.
One can get it in the form of a rider attached to a life insurance cover, or as a standalone policy from either a life insurer or a non-life insurer. If critical illness occurs, it pays the entire sum insured and terminates and can happen only once for any particular illness.
To get the payout, the insured has to survive for 30 successive days after the diagnosis. No claim can be made during the first 90 days of the inception of the policy. The policy term is usually longer (10-20 years) if this cover is bought from a life insurer as a rider than from a general insurer (1-5 years).
Senior citizens health plan. Most IHPs cap the entry age at around 60 years, while SCHPs are generally for the age group of 60-80 years. Most can be renewed lifelong or up to the age of 90, and have a fixed coverage of, say, Rs 100,000 or Rs 200,000. Besides looking for sub-limits, those taking SCHP should watch out for certain illnesses as many ailments are excluded from the plan. SCHPs might even have the option to attach a CIP.
Daily hospital cash. This should be the last option when buying health plans. Most hospital cash plans might also inconvenience you as they offer the benefit after discharge from the hospital, and only after the policyholder produces proof of the number of days he stayed there.
Hospital cash benefit has a pre-defined limit in most cases, say Rs 500 per day for up to 50 days in a year and up to 250 days during the entire term.
Unit-linked health plans. These are mostly defined benefit plans - usually for the long term - and, unlike a standard health insurance policy, the payout is not dependent on the costs actually incurred.
Health Ulips are made up of two parts - a health plan and a unit-linked investment plan. Although these policies are being sold by life insurers, they may not cover life risk. Out of the premium one pays, a portion goes towards medical coverage and the rest of the premium is invested in a fund that operates like a mutual fund.
Covers from life insurers. Life insurance companies, too, have started offering health plans. Most of these are, however, defined benefit plans - the pre-specified amount which is the sum insured is paid as compensation, irrespective of the actual amount of expenses incurred.
Also, these are long-term, having a fixed premium for, say, three, five, or even 10 years. Most of the types of plans discussed above are on offer. Some will even throw in a life cover for good measure.
