What are the Types of Health Insurance Plans Available in India?
- Author :
- TATA AIG Team
- Published on :
A sound health insurance policy assures that in case of an unfortunate event like an accident, ailment, serious injury, etc., you would not have to spend money from your pocket and ensures that all your expenses will be borne by the health insurance company.
This enables you to get the best treatment possible without worrying about the expenses, thereby increasing your chances for survival, which is truly the best gift you can give to your loved ones. In India, there are different types of health insurance plans in India with different coverage. Before you purchase a health policy, you must understand different types of health insurance and select the one that fits your needs.
How Many Types of Insurance are there in India?
Here is everything you should know about the types of health insurance coverage available in India: The different types of health insurance policies can be classified into two broad categories:
- Indemnity plans
- Defined benefit plans
Indemnity Health Insurance Policies
Indemnity policies are traditional health insurance plans that offer comprehensive coverage for the hospitalisation expenses up to the sum insured as per the policy. However, in these types of health insurance policies, the claim is exactly equal to the amount of medical expenses you incur. The insurer assesses the documents filed and reimburses you/pays to the hospital the sum spent for eligible medical expenses up to the sum insured under the policy.
For instance, if you buy a health insurance policy with a sum insured up to ₹4 lakhs and your hospital bills are ₹1.5 lakhs. In this case, you submit the hospital bills and the required documents with the insurance company, and upon approval, the insurer pays out ₹1.5 lakh to you. The balance sum of your policy is left unutilised and is available for future claims during the policy tenure.
An advantage of choosing an indemnity health insurance plan is that you have the freedom to choose your doctor and the hospital for your treatment. You do not have to get any approval from the health insurance company before consulting a doctor or visiting a hospital. In some indemnity health policies, the insurer applies a deductible condition. A deductible is a pre-decided, fixed sum of money, which is paid by you when you make a claim. The remaining claim amount is borne by the insurance company, up to the sum insured under the plan.
Under the indemnity category, some of the most popular types of health insurance plans in India are:
1.Mediclaim insurance: Also known as mediclaim policy, these types of health insurance policies are offered by the government and sponsors inpatient treatment and outpatient treatment. However, these policies do not cover cosmetic surgery, eye treatment, etc. Read the documents carefully to understand the inclusion and exclusions of your mediclaim insurance plan.
2.Individual health policy: These types of health insurance plans cover only the policyholder individually. In this policy, the insurer pays out the expenses you incurred during a hospitalisation or emergency treatment. You can claim up to the sum insured under the policy. For instance, if you buy an individual health policy of ₹1 lakh, where your spouse is also covered, then you both can claim up to ₹1 lakh individually.
3.Family floater plans: These types of health insurance plans in India provide coverage for the entire family (irrespective of their age) under a single comprehensive health cover. The sum insured under the family floater plan is equally divided among the insured members. If any of the insured family members need health care, the entire policy sum will be paid out. The premiums of these plans are comparatively lower than individual or mediclaim policies.
4.Group medical plans: These types of health insurance plans in India are offered by employers to employees to attract and retain their staff. Employees prefer these types of mediclaim policies in India as it lowers their taxable income.
5.Top-up health insurance plans: Heath top-up plans are available as additional policies which you can buy over and above a base health insurance plan. These plans kick into action once the sum assured on your base plan is exhausted. These are great options for people who wish to increase their health insurance benefits without changing their existing base policy. Tata AIA offers the MediCare Plus Super Top-Up Health Cover to boost your existing health insurance coverage.
Defined Health Insurance Plans
In these types of health insurance policy, a lump sum amount is paid to you by the insurer upon fulfilment of a condition, such as detection of an illness, personal accident, hospitalisation, etc. In these plans, the insurance company guarantees to pay a pre-decided sum for your medicare expenses without specifying any limit on how much they will pay during a period.
In the defined cover category, some of the most popular types of health insurance include:
1.Critical illness plan: In this type of health insurance policy, the insurer pays a lump sum upon diagnosis of a listed critical ailment. The amount can cover the treatment expenses. Some of the critical ailments covered under these plans are cancer, stroke, multiple sclerosis, kidney failure, major organ transplant, etc.
2.Personal accident plan: Under these types of health insurance in India, the insurers pay a lump sum to the family in case of your death or permanent partial or total disability (leading to loss of income) due to an accident.
3.Hospital daily cash: In this insurance plan, the insurer gives you a daily cash allowance (up to a specified limit) in addition to the hospitalisation expenses. Some insurance companies add this benefit to their standard health insurance plan. However, other insurers might allow you to add this as a payable rider to enhance your health insurance coverage.
How does Health Insurance Work in India?
In India, different types of health insurance plans have their processes. The indemnity health insurance covers, such as mediclaim insurance, family health insurance, individual health insurance, etc., allow you to enjoy your insurance benefits in two ways:
1.Reimbursement claims: In this, you pay for your treatment and hospitalisation expenses from your pocket and later file for a claim and get the reimbursement sum from the insurer.
2.Cashless facility: In this, you choose a health care provider or hospital listed under the insurer’s network and get your treatment done without paying any bills. The insurance company directly settles the hospital bills with the hospital, and you do not pay anything from your pocket.
In the case of defined benefit plans, there is no reimbursement or cashless facility mode. If the condition of the insurance contract happens (such as you are diagnosed with a critical illness or you meet an accident), the insurer pays out a lump sum to you or your family.
Now, you understand the different types of health insurance plans in India. Assess which one of these policies best fits your needs (budget, lifestyle, family members, etc.), and choose an insurance company, which is trustworthy and has a high claim settlement ratio.
You can check out the Medicare health insurance plans by Tata AIG. Available under three variants – Medicare, Medicare Premier and Medicare Protect. You can choose the plan of your choice and ensure complete protection for you and your loved ones. Be careful and choose the right health insurance policy.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.