In the first article on Health Insurance, we discussed the rationale for buying insurance. Now let us understand the types of Health Insurance / Medical Insurance policies offered in India and how to choose what’s best for you?
Types of Health Insurance Plans
- Hospitalization Plans / Indemnity Plans:
These plans reimburse the insured or pay up the hospital directly (Cashless Policies @ Network Hospitals) for cost of hospitalization and medical costs of the insured subject to the sum insured or sub-limits for different treatments specified in the policy.
- Individual Health Plan – Entire sum insured is applicable for single individual
Who should buy? When to buy?
- Anyone who doesn’t have adequate health insurance cover.
- Right after first job till happily single.
- For individuals more prone to diseases (family history), accidents (bikers), they can buy or continue individual policy even after marriage and buy a family floater to cover family.
- Family Floater Policy – Sum insured is applicable for a family as a whole
Who should buy? When to buy?
- Earning member of any family that is not adequately covered.
- Right after first job if parents and siblings are not adequately covered.
- Right after marriage.
Benefit* by converting existing Individual Health policy to Family floater.
Please Note: SUB-LIMITS may exist for various Non-Major procedures up to certain SI (Sum Insured) level. This means insurance company will pay only up to respective sub-limit amount in case of the specified medical procedures.
These sub-limits are usually not applicable for Major medical illness & procedures like Cancer, major organ transplant, cardiac surgeries, stroke, paralysis, brain surgeries etc. (Read policy document for details)
Eg. In case of ICICI Lombard complete health insurance, for Annual sum insured of Rs.3Lac, Rs.4Lacs and Rs.5Lacs – following Sublimit applies
| Surgeries / Medical Procedure | Sub-Limit |
| Cataract per eye |
20,000 |
| Other Eye Surgeries |
35,000 |
| ENT |
35,000 |
| Surgeries for – Tumors/Cysts/Nodule/Polyp |
60,000 |
| Stone in Urinary System |
40,000 |
| Hernia Related |
60,000 |
| Appendisectomy |
40,000 |
| Knee Ligament Reconstruction Surgery |
90,000 |
| Hysterectomy |
60,000 |
| Fissures/Piles/Fistulas |
35,000 |
| Spine & Vertebrae related |
90,000 |
| Cellulites/Abscess |
35,000 |
| All Medical Expenses for any treatment not involving surgery/medical procedure |
25,000 |
For Annual sum insured of Rs.2Lac sub-limits are much lower.
However for Annual Sum Insured of Rs.7Lac and Rs.10Lac no sub-limit exists.
(Source – www.icicilombard.com)
- Hospitalisation Plus / Top Up Plans:
These plans are affordable options to supplement your Primary Health Insurance Plan with a Rs.5Lac, Rs.8Lac or Rs.10Lacs Top-up cover with applicable deductions^ of Rs.2lac, Rs.3lac or Rs.4lac respectively.
^Deduction means you need to pay the applicable deduction amount (i.e. 2lac, 3lac, 4lac) out of your other existing policy/company group policy and use your Top-Up insurance policy to pay the rest of the hospital bill.
Higher the Deduction Amount → Lower the Policy Premium.
Who should buy? When to buy?
- Individuals/Families with insufficient existing cover
If Existing Policy/Co. Policy provides cover up to Rs.2lacs or 5Lacs, then one can buy:- 5Lac Top-Up policy for family of three with Rs.2Lacs deductible at annual premium of around Rs.11,000 (~ Rs.920/- per month) OR
- 10Lac Top-Up policy for family of three with Rs.4Lacs deductible at annual premium of around Rs.5500 (~ Rs.460/- p.m.)
- Check your family’s total health insurance cover. Right time to buy is the time you realize you’re inadequately covered – Could be today.
- Critical Illness Plans
These plans are defined-benefit based policies which pay a lump-sum (fixed) payment on diagnosis of covered critical illness & medical procedures like heart attack, stroke, cancer, kidney failure etc.
Life Insurance companies also offer critical illness plans as a bundled option with Online/Offline Term Life Insurance Plans.
General Insurance companies also offer these plans as Add-On option.
Who should buy? When to buy?
- Individuals with family history of critical illnesses covered in such plans.
- Individuals with highly stressful lives.
- Anyone who wants to cover themselves against life shattering & wealth eroding critical illnesses.
There are some other health insurance plan categories like Specific Conditions Coverage Plans (Eg. Cancer Care Plans) – These plans are special case of critical illness plans designed specifically to offer health insurance against cancer or diabetes.
In a nutshell:-
- It is imperative to have adequate health insurance protection covering all family members irrespective of your company’s group insurance policy cover. This may not apply for individuals/families covered under CGHS or Railways or Military hospital if they are satisfied with the offered medical care.
- You should contemplate buying an Individual Health Plan / Family floater as soon as you join the workforce depending on parent’s & sibling’s medical coverage situation.
- If your company covers you & your family for Rs.2lacs, 3lacs or 5lacs and you cannot afford paying high premium than you can buy a Top-Up Health plan.
However if your organisation’s group plan doesn’t cover all your family members, buying a family floater makes more sense.
You should increase the Sum-Insured amount and/or add a Top-Up plan when your salary increases. - If you lead a very stressful life and/or have a family history of any critical illness, buying a critical illness cover makes lot of sense.
- Before buying any health insurance plan, you should thoroughly read the policy document and understand important Conditions (e.g. sub-limits) and Exclusions (both temporary and permanent).
In the third and final article on Health Insurance we would shed some light on general health insurance policy exclusions, along with discussing Add-on rider options that one can take advantage of.
By Kushal Bhateja
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