Health Insurance was introduced in 1986 by Public Sector Insurance Companies in India in the name of Mediclaim Policy for reimbursement of Hospitalization Expenses. Currently the Health Insurance is opened to all Insurance Companies including standalone Health Insurance companies registered with insurance regulator IRDA. Health Insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the Policyholder. You can purchase Individual Health Insurance or Family Floater insurance as per your needs. In India, Health Insurance is offered mainly in the form of (a) Indemnity Plan which covers hospitalisation expenses and (b)Fixed Benefit Plan which pays a fixed amount for pre-decided diseases.
Top 10 Benefits of Health Insurance Policy:
Health Insurance is growing swiftly because of the following evident Benefits:
- Protection against Health Mishap: It covers Hospitalisation expenses for any insurable Health misfortune happened. Its aim is to have best medical care without any strain on your finances.
- Life Long Protection: Health Insurance promises lifelong cover across all risks of illness that are insurable. In addition, the provision of Migration and Portability of benefits is also available.
- Health Insurance offers Cash Flow: The Hospitalisation expenses are settled between your insurance company and the Hospital. The facility of pre-cashless authorization is monitored by the TPA.
- Coverage against Critical illness: Health Insurance provides coverage against life threatening diseases like Heart Attack, Kidney Failure, Brain Surgery Cancer, Chronic lung and Liver disease and you are benefited by a lump sum amount to meet your illness related treatment cost and any other financial obligations.
- Add on Covers: Some of the Add on covers commonly offered by the insurance companies includes Organ Donor Medical Expenses, Maternity Benefits, Covers for New Born, Hospital Cash, Payment of Ambulance Charges, OPD treatment, Restoration of Sum Insured and Health Check-ups etc.
- Additional services offered by the Health Insurance: The Insurance Regulator IRDA has introduced a dedicated Health intermediary known as Third Party Administrators are licenced to process health insurance claims, provides cashless facility and serve the policyholders who take Health Insurance Policies. The major activities of the TPA includes customer enrolment, Database maintenance, providing value added services like Ambulance service, health wellness and check-up camps.
- Income Tax Benefits for paying Medical Insurance Premium: The deduction under section 80 D of Income Tax Act, 1961 has been allowed for Health premium paid. Medical premium paid for the Parents is also additionally qualified for deductions.
- Health insurance is highly regulated: When the insurance sector was opened in India in 1999, The Insurance Regulatory and Development Authority (IRDAI) was vested with powers to regulate the insurance sector. The regulator aims is to make health insurance policies customer friendly and more standardized for bringing uniformity in health products. Recently IRDA has introduced a standard health cover Arogya Sanjeevani Policy that must be offered by all General and standalone health insurers to the general public as affordable health cover.
- India is among the cheapest health insurance markets: one can observe that compared to the numerous benefits being offered by health insurance policies, the premium payable is quite affordable.
- Group Health Insurance: Group health covers can get better terms and conditions of services as the insurance companies designed the Tailor made Group Mediclaim Policies to suit the group’s requirements
In view of the above Health Insurance Benefits, You may choose Insurance plans based on your personal needs and requirements.
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FAQs
Under Section 80D of the Income Tax Act, you can claim tax deductions on the premiums paid for health insurance policies. This includes premiums paid for your own health cover, family floater plans, and even for your parents’ health insurance. These deductions help lower your taxable income and make your health insurance more affordable.
Health insurance protects you from sudden, expensive medical bills by covering hospitalisation expenses and surgical treatments. It helps you access quality medical care without putting a strain on your savings. Whether it’s for routine hospitalisation or critical illnesses like cancer or heart surgery, health insurance reduces your financial burden by settling bills directly with the hospital or reimbursing you, depending on your policy.
A cashless claim is when your hospitalisation expenses are settled directly between the hospital and the insurance company through a Third Party Administrator (TPA). This is mostly done at the insurer’s network hospitals. You don’t need to pay anything upfront except for non-covered costs. Reimbursement claims, on the other hand, require you to first pay for medical expenses and later submit documents to the insurer for refund. Cashless claims are more convenient during medical emergencies but are limited to network hospitals only.
Pre-existing diseases are often covered by health insurance, but they may come with a waiting period, typically ranging from 2 to 4 years depending on the insurer. It’s important to carefully read your policy terms, as some insurers offer coverage after the waiting period, while others may impose specific conditions or exclusions.
Critical illness cover is an add-on rider that provides a lump sum amount when diagnosed with life-threatening illnesses like heart attack, cancer, or kidney failure. This benefit helps you manage huge treatment costs or other financial obligations beyond standard hospitalisation. It provides extra financial support, reducing the stress of large medical bills during difficult times.
The Income Tax Act allows deductions on premiums paid under Section 80D. For individuals and their family, you can claim up to ₹25,000 per annum, and an additional ₹25,000 (₹50,000 if parents are senior citizens) for insurance premiums paid on your parents’ health cover.
Health insurance makes sure your hospitalisation expenses are either paid directly to the hospital (as part of cashless claims) or reimbursed to cover costs like room charges, surgery, medicines, doctor fees, and diagnostic tests. This prevents unexpected medical bills from depleting your savings and helps you focus on recovery rather than financial worries.
Network hospitals are tied to the insurer and offer cashless treatment. Choosing a network hospital allows you to avail of cashless services where the insurer and hospital settle bills directly. This simplifies the claim process and reduces the need to pay a large amount of money upfront. Non-network hospitals require reimbursement claims, which can take longer and involve more paperwork.
Common exclusions include cosmetic surgery, treatments for self-inflicted injuries, dental treatments (unless caused by an accident), pre-existing diseases during the initial waiting period, and hospitalisation less than 24 hours. Always read policy terms carefully to understand what’s not covered and avoid unpleasant surprises during a claim.