All About Health Insurance in India: A Comprehensive Guide for You

With medical inflation reported at above 6% over the last year, investing in health insurance plans becomes the need of the hour [1]. Interestingly, the health insurance industry is the fastest growing non-life insurance sector in India with a CAGR of 23% over the last 10 years [2]. Around 514 million Indians were covered under health insurance schemes in the fiscal year of 2021 [3]. However, this is roughly 25% - 35% of the population indicating there is still potential for growth in the health insurance sector. It is important to note that a huge part of the credit goes to the government-sponsored health insurance schemes like Ayushman Bharat that contribute toward Universal Health Coverage (UHC). Still, the coverage through individual health plans remains bleak. The myths about health insurance, lack of awareness, and distrust in the healthcare ecosystem deprive many Indians of reaping the benefits of health insurance [4]. But we need to remember that health insurance is not just a form of investment but a savior in times of financial constraints during medical emergencies. Here is a complete guide to healthcare insurance and its importance for you and your loved ones.

Features and benefits of health insurance 

Here are some benefits and features of health insurance that explain why should everyone have health insurance:

Comprehensive coverage 

Health insurance plans in India cover a wide range of healthcare expenses. These include hospitalization, pre-hospitalization, and post-hospitalization expenses. A single health policy can cover room rent, ambulance charges, medicinal costs, and more. Besides, you get covered against critical illnesses such as kidney failure, stroke, heart disease, and cancer.

Financial security 

Medical emergencies arise without any notice. To deal with such emergencies, as well as the rising medical inflation and lifestyle diseases, health insurance acts as a protection. A single family floater health insurance plan can provide financial security to your every family member by ensuring coverage against medical expenses. Additional Read: Health Insurance Benefits

Cashless claim settlement 

Getting the treatment done at network hospitals of your health insurer gives you a cashless claim benefit. Network hospitals are the hospitals empaneled with your health insurance company. Under a cashless claim settlement, the insurer directly settles medical bills with the hospital instead of you paying the cash and getting it reimbursed. Additional Read: How to File A Claim: A Quick Guide on The Process & Required Documents

Critical illness cover 

Treatment of life-threatening diseases such as stroke, cancer, and heart attack is quite expensive. In such situations, having a health insurance policy with a critical illness cover helps you tackle the additional costs.

Government health insurance schemes in India 

To provide health coverage to a substantial number of people, governments across the world take measures to improve the healthcare ecosystem of their countries. For example, Ayushman Bharat health insurance scheme in India is an initiative that provides health coverage to low-income earners in the country. There are many central and state government health insurance schemes in India that provide health cover at a low price and are usually offered on a yearly basis.  Additional Read:  Ayushman Bharat Registration Here is a list of health schemes in India: 

• Ayushman Bharat Yojana
• Rashtriya Swasthya Bima Yojana 
• Bhamashah Swasthya Bima Yojana 
• Central Government Health Scheme (CGHS) 
• Mukhyamantri Amrutam Yojana 
• Chief Minister’s Comprehensive Insurance Scheme 
• Awaz Health Insurance Scheme 
• Dr YSR Aarogyasri Health Care Trust 
• Employment State Insurance Scheme 
• Aam Aadmi Bima Yojana (AABY) 
• Janshree Bima Yojana 
• Karunya Health Scheme 
• Telangana State Government Employees and Journalists Health Scheme 
• Pradhan Mantri Suraksha Bima Yojana 
• Universal Health Insurance Scheme (UHIS) 
• West Bengal Health Scheme 
• Yeshasvini Health Insurance Scheme 
• Mahatma Jyotiba Phule Jan Arogya Yojana

Additional Read: 18 Best Government Health Insurance Schemes

Tax benefits under section 80D of the IT Act 

Apart from the health coverage benefits, health insurance offers tax deduction benefits too. Individuals and HUF can claim a tax deduction on insurance premiums paid under section 80D. The benefit is available for premiums paid on the insurance of self, spouse, dependent children, or parents. Additional Read: Learn about 3 Tax Benefits You Can Avail with a Health Insurance Plan However, only individuals and HUF can claim deductions for premiums and medical expenses paid for senior citizens. The payments eligible for deductions include premiums paid in modes other than cash, preventive health check-up expenses, medical costs for senior citizens, and payments towards government health schemes. Additional Read: Why Should Health Insurance be a Part of Your Tax Saving Plan? The maximum tax deduction under section 80D is Rs.25,000 for individuals, and Rs.50,000 for senior citizens in a financial year. Here’s a table with deductions for the premiums paid: 

Premium paid for	Amount paid for self, spouse, children	Amount paid for parents	Total tax deductions
Individual and parents below 60 years	Rs. 25,000	Rs. 25,000	Rs. 50,000
Individuals, family below 60 years + Parents above 60 years	Rs. 25,000	Rs. 50,000	Rs. 75,000
Individual, family and parents above 60 years	Rs. 50,000	Rs. 50,000	Rs. 1,00,000
HUF members	Rs.25,000	Rs. 25,000	Rs. 50,000
NRI	Rs. 25,00	RS. 25,000	Rs. 50,000

Additional Read: Section 80D: Enjoy Combined Benefits of a Tax Rebate and Medical Coverage

Types of health insurance  

There are several types of health insurance in India. Here are some common health plans:

Individual health insurance 

Individual health insurance caters to the financial needs of the individual policyholders during planned treatment and medical emergencies.

Family floater health insurance 

A family health insurance plan offers coverage to the entire family and provides the same comprehensive benefits as individual health insurance. A single family floater plan is cheaper than buying separate individual plans for each family member. Additional Read: Looking for a Suitable Health Cover for Your Newborn? Here’s A 3-Step Guide

Maternity health insurance 

These plans offer health insurance coverage to pregnant women by helping them avail timely services and covering maternity expenses. Some health insurance plans provide coverage to both the mother as well as the newborn. Additional Read: Women’s Health Insurance: 10 Things You Should Look at Before Buying One

Senior citizen health insurance 

Older people are more prone to age-related diseases treating which often leads to huge expenses. A senior citizen’s health policy is specifically designed to cover healthcare costs of people above 60 years. Buying this plan can be a perfect gift for your aging parents. Additional Read: Why is Buying a Senior Citizen Health Plan for Your Parents Important?

Group health insurance 

Group health insurance provides coverage to the members of a large group, such as the employees of an organization. The premium of such a policy is usually paid by the employer. Additional Read: Group Health vs Family Floater Plans: What are Their Features and Benefits?

Things to consider before buying health insurance 

You need to do some health insurance comparisons and research to buy the right health plan for yourself and your family. Here are some things to consider before buying a health insurance policy: Additional Read: Top 9 Things to Consider When You Decide the Sum Insured Amount

Sum insured 

One of the most important factors is the coverage amount you choose. Selecting a high sum insured provides extensive coverage to you and your family and helps tackle the rising medical bills. While choosing the right sum insured, take your income, family members, age of your family members, pre-existing diseases, or critical illnesses into consideration. Additional Read: Maturity Amount and Sum Assured: Understand How They Differ From Each Other

Premium 

The premium you pay towards your health insurance policy depends on factors like the sum insured, your age, type of health plan, medical history, and more. Go for an affordable premium that provides you maximum features and benefits for your health plan. However, note that a policy with a lower premium may not always be the right choice to cover all the healthcare needs you are looking for. Additional Read: What is Health Insurance Premium and How is it Determined?

Waiting period 

Health insurance companies usually have a waiting period ranging from 2 to 4 years before they can cover your pre-existing medical diseases. During this period, your claims due to such illnesses get rejected. Choose a health plan that has the lowest waiting period. Additional Read: Waiting Period: Why is it so Important for You to Know About This? https://www.youtube.com/watch?v=CnQcDkrA59U&t=5s

Copayment, deductible and No-Claim Bonus (NCB) 

Copay is the percentage of the billed amount you choose to pay during claim settlement. While buying a health policy, check if it has a copayment clause and select the percentage you wish to pay. The remaining percentage will be covered by the insurer. Additional Read: Copay in Health Insurance: Its Meaning, Features, and Benefits On the other hand, deductible is the fixed amount you incur before the insurer pays towards your treatment cost. Both copayment and deductible help reduce the premium you pay. Similarly, check if the health insurance provider offers NCB for every claim-free policy year. This is given to you in the form of a discount on premium or a higher sum insured against existing premium. Additional Read: What is a Deductible? What are its Benefits in a Health Insurance Policy?

The reputation of the insurer 

Checking the reputation of the health insurance company from where you wish to buy the health policy is equally important. Before buying a health policy, watch out for factors like the network hospitals of the insurer, claim settlement ratio, and the customer services they offer. Make sure you buy a policy with a high claim settlement percentage. Additional Read: 10 Tips to Choose the Best Health Insurance Policy in India

How to make your health insurance policy more affordable? 

To get the best health insurance plans in India at affordable premiums, understand the health insurance tips and tricks: Additional Read: Health Insurance Myths and Facts that you Should Know

Start early 

Premiums at an early age are much lower compared to the health insurance premium you pay as you become older. This happens because there are risks of age-related diseases like hypertension and diabetes as you grow old. This makes the health insurers increase the premiums. Therefore, it is important to opt for a health policy when you are young to enjoy lower premiums. Additional Read: 7 Important Health Insurance Questions and Answers You Need to Know! https://www.youtube.com/watch?v=hkRD9DeBPho

Opt for top-up plans 

Top-up health insurance plans provide you coverage above the sum insured in the base policies. These plans get activated once the threshold limit has been reached in your existing policy. Such plans help you meet the changing insurance requirements as you age. You can just opt for top-up health insurance instead of buying a new health policy for extending coverage. These plans are much cost-effective when compared to buying a new plan. Additional Read: Top-up Health Plans: Why is Having a Backup Plan Important?

Compare policies 

Research about the policy you wish to buy and perform a health insurance comparison of various policies offered by different health insurance companies. Ensure you take into consideration the coverage amount, premium, features, benefits, inclusions, exclusions, riders, claim settlement, network partners, and more while comparing the policies. Buy a health plan that offers the most benefits at a reasonable premium. Also, do read the fine prints before your sign the policy documents.  Thus, comparing health policies online and making an informed decision will help you get best offers and discounts. Additional Read: Top 6 Health Insurance Tips to Get Affordable Health Insurance Plans! Considering the various health insurance options in the market, it is often a challenge to choose the best health insurance plans. However, this should not stop you from buying the right health insurance for yourself and your family. Check the Aarogya Care Health Plans offered by Bajaj Finserv Health. These plans have one of the best-in-industry claim settlement ratios. Buy now and enjoy benefits like hospitalization cover up to Rs.25 lakh, 100% cashback on availing health services from network partners, and discounts on doctor and lab consultations.