Health Insurance de-jargoned

1.What kinds of Health Insurance plans are available?

Micro-Insurance policies
Critical Illness plans.
Individual Health Policy
Family Floater Policy
Hospital Daily Cash Benefit Policy
Senior Citizen Health Policy

2. What are the forms of Health Insurance claims available?

Health insurers usually provide either cash-less facility (direct payment to hospital by insurer) or reimburses the full or part-payment of expenses related with hospitalization due to illnesses and injuries.
The forms of health insurance claim that will be covered by the health plan are specified in advance.

3. What is cashless facility?

Insurance companies have tie-up arrangements with several hospitals all over the country as part of their network. Under a health insurance policy offering cashless facility, a policyholder can take treatment in any of the network hospitals (with which the health insurer has tie-up) without having to pay the hospital bills. The payment is made to the hospital directly by the Health Insurer through a 3rd party called the TPA (Third Party Administrator). The payment is made by the TPA to the hospital on behalf of the health insurer.

In case of senior citizen health policies, there are always sub-limits on the amount of claims payable. The sub-limits vary among the health insurers. The expenses beyond these sub-limits are not covered under the policy and the policyholder has to pay for these expenses from his pocket.

Cashless facility is not available if treatment is taken in a non-network hospital.

4. What are the tax benefits if I opt for a Health Insurance policy?

Under Section 80D of the Income Tax Act, policyholders who have made payment towards purchasing a health policy for self, spouse (dependent or not), and dependent children, by any payment mode other than cash, can avail of an annual tax deduction of upto INR 15,000 from their taxable income. For senior citizens, this deduction is upto INR 20,000.

In addition to the above, an additional tax deduction of upto INR 15,000 per annum is available for health insurance premium paid on behalf of dependent parents, which again is INR 20,000 if either of the parent is a senior citizen.

5. What are the factors that affect Health Insurance premium?

Being a health policy, age is a major factor that determines the premium. Previous medical history is another major factor that determines the premium. Lower age and no prior medical history means, lower premium.

6. What is not covered under a Health Insurance policy?

Generally, pre-existing diseases are excluded under a Health Insurance policy, for a limited period (the time period of exclusion varies among health insurers).

Other typical exclusions from a health policy are cost of spectacles, contact lenses and hearing aids, dental treatment/surgery ( unless requiring hospitalization), convalescence, general debility, congenital external defects, venereal disease, intentional self-injury, use of intoxicating drugs/alcohol, AIDS, expenses for diagnosis, x-ray or laboratory tests not consistent with the disease requiring hospitalization, treatment relating to pregnancy or child birth including caesarean section, naturopathy treatment.

Read the policy document carefully to understand what is covered and what is not.

7. Does the health cover start immediately on payment of premium?

No. When you get a new policy, generally, there will be a 30 days waiting period starting from the policy inception date, during which period claims will not be payable by the insurer.
However, this is not applicable in case of any emergency hospitalization occurring due to an accident.
For subsequent policies under renewal, waiting period will not be applicable.