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Types of Health Insurance in India

Health insurance is a saviour during medical emergencies, which otherwise would be a financial drain. The treatment costs are soaring high and can burn a hole in your pocket. ...Read More

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Types of Health Insurance in India

Different Types of Health Insurance

Types of Health Insurance
November 04, 2024

Table of Content

 

For an informed choice, you should be aware of the different types of health insurance available and the associated terms and conditions. The details of the plans are given below:

Sl. No

Health Insurance Plan

Designed for

1. 

Individual Insurance Plans

For a single person

2. 

Family Floater Plan

The entire family, including parents, children, and spouse

3. 

Senior Citizen Plan

For individuals above 65 years of age

4. 

Group Insurance Plan

Corporate/Company employees.

5.

Critical Illness Plan

To cover treatment cost of critical illnesses like cancer, heart and kidney diseases, etc

6.

Personal Accident Cover

For partial/ total disability or death due to an accident

7.

Top-up Plans

For additional cover for the basic plan up to a certain extent.

8.

Maternity Plan

To cover the pre/post-natal and delivery expenses

9.

Mediclaim Plan

To cover the hospitalisation expenses

10.

Disease-specific plan

To cover specific diseases

11.

Unit-linked Plan

For a dual component of insurance and investment

12.

Daily Hospital Cash

To manage the expenses till the insured is hospitalised.

 

Individual Health Insurance

Individual insurance plans are for a single person. If you choose to purchase this plan among the different types of health insurance, the provider will take care of your hospitalisation expenses. 

Features of the Individual Health Insurance Policy

The features of the plan are:

  • It is for a single person.

  • The sum assured will be separate for each beneficiary.

  • The cover for hospitalisation expenses includes surgery, daycare treatment, room rent, doctor’s consultation, prescription medicines, etc.

  • This insurance plan is for individuals in the 18 to 65 age group.

Family Health Insurance

Family floater insurance plans cover the entire family. The sum assured gets divided among the members of the family. The premium for these types of plans will be lower when compared to individual health insurance for each family member. 

Features of Family Floater Health Insurance Policy:

Here are the terms of the family floater given below:

  • A single plan will cover the entire family.

  • The sum insured is shared among the beneficiaries listed in the plan.

  • The plan offers coverage for hospitalisation expenses, including doctor’s fees, daycare treatment, nursing and surgery charges, prescription medicines, etc.

Critical Illness Insurance

The treatment cost for critical illnesses like heart and kidney diseases, cancer, stroke, etc, is exorbitant and can drain your savings if you do not have insurance coverage. Generally, if you are diagnosed with any of the critical illnesses included in the policy terms, the critical illness insuranceplans provide you with the sum insured in a lump sum. For instance, if the plan is for Rs. 20.00 lakhs, you will receive Rs. 20.00 lakhs in a lump sum. Once the lump sum payment is made the provider terminates the policy.

Features of Critical Illness Health Insurance Plan:

The key features of the plan are:

  • You get a lump sum payment incase you are diagnosed with a critical illness included in the policy terms.

  • The policy is eligible for lifetime renewal i.e., it can be renewed lifelong without any age limit or restrictions. This especially benefits senior citizens if they are diagnosed with a critical illness later in life.

  • You should survive for at least 30 days after the illness is diagnosed.

  • Some of these types of health insurance in India come with a feature of complimentary annual health check-ups. This gives the advantage of early diagnosis and timely treatment.

  • The policy automatically terminates after a lump sum payment is made. 

Senior Citizen Health Insurance

The senior citizen insurance plans are for persons over 65 years of age. This benefits persons who do not have an insurance plan and intend to go for health coverage later in life. Also, if your parents do not have an insurance plan, you can opt for this plan. The premiums are slightly higher for these plans, considering the higher risk of medical emergencies. 

Features of Senior Citizen Health Insurance Plan

The salient features of the plan are:

  • The plan is designed for individuals above 65 years of age.

  • It offers coverage for hospitalisation expenses incurred due to illness/accident, medical treatment, domiciliary expenses, and psychiatric treatments.

  • The premiums for health insurance for senior citizens are higher than the individual insurance plan or family floater since older persons are more susceptible to health issues.

Top Up Health Insurance

Top-up health insurance plans are ideal for persons who intend to reload the sum insured up to a certain amount. The top-up amount is available once you have utilised the entire insured under the base plan. 

Features of the Top-up Health Insurance Plan

  • You can get coverage for a higher amount over and above the sum insured in the basic plan. 

  • Fixed deductibles apply to these types of health coverage.

  • Option for a super top-up health insurance plan is also available for a higher sum insured. 

Maternity Health Insurance Plan

Maternity insurance plans can be a separate plan or can be an add-on to the basic plan. These types of health plan cover pre/post-natal and delivery expenses. Some maternity insurance plans offer coverage for two pregnancies. It also provides for newborn baby expenses like vaccination and paediatric expenses. 

Features of the Maternity Health Insurance Plan

The features of the maternity health insurance plan are:

  • The plan covers expenses incurred for pre-natal, post-natal, and delivery. 

  • Some maternity insurance plans may have a waiting period.

  • Some insurance companies provide cover for the newborn baby under this plan.

Personal Accident Insurance

The sudden death of a family member in an accident or partial or permanent disability can leave the family shaken. Bearing the treatment cost is one aspect and the financial instability is another if the victim is the sole breadwinner.  Personal accident insurance plans can be a great support under such circumstances.  

Features of Personal Accident Insurance Policy

The features of these types of health coverage are:

  • This plan provides coverage for accidental death and permanent or partial disability.

  • It can be by way of weekly compensation in the case of permanent/partial disability.

  • The insurance company offers a lump sum amount to the family in case of death or permanent disability. 

MediClaim

MediClaim insurance policies are for persons who need coverage only for hospitalisation expenses. The pre and post-hospitalisation expenses will not be covered under these types of health insurancein India. 

Features of Mediclaim Insurance Plan

Only in-patient expenses like doctor’s fees, anaesthesia, nursing charges, surgeries, and oxygen are covered under these types of health insurance plans. 

Group Health Insurance

Group health insurance plans are for a group of people. The most popular group health insurance plans are the Group Medical Cover (GMC). GMC is generally provided by Corporations and organisations to their employees. These types of health plan can be only for the employee or may cover the family members under the same policy. Some institutions may collect extra premiums to include family members in the policy. 

Features of a Group Health Insurance Plan

The key features of the plan are:

  • Health coverage is available for the employee and his/her family.

  • The basic coverage is free, but the employee might have to pay an additional premium to include family members.

  • There is no waiting period under this plan.

  • Hospitalisation expenses incurred for injury or illness are covered under this policy.

  • Coverage may also be available for maternity care and treatment received as an out-patient.

  • A top-up facility for the sum insured may also be available.

  • Coverage for online doctor consultations, annual health check-ups, and lab tests may also be provided.

Disease-Specific (M-Care, Corona Kavach, etc.)

Some specific diseases like Corona may involve heavy treatment costs. If you do not have enough savings, you may end up in a financial crisis. Disease-specific health insurance plans can be a great support in such situations. 

Features of disease-specific health insurance plan

The features of the plan are:

  • Consumables like PPE kits, masks, gloves, etc are covered under the plan.

  • The plan duration can be 105, 195, or 285 days.

  • It can be either an individual plan or a family floater.

  • The plan has only a single premium payment option.

  • No renewal is permitted.

ULIPs

Unit linked insurance plans (ULIPs) are ideal for persons who prefer to have both insurance and investment options. A part of the premium paid towards the plan is invested in market-related instruments like debt, equity, or both, and the remaining provides life insurance coverage. The ULIP policyholder can grow his investment while financially securing his family. 

Hospital daily cash

The hospital daily cash insurance provides a fixed amount for expenses like transportation, food, and lodging for every day of hospitalisation of the insured. The predetermined amount is irrespective of the actual medical expenses incurred. 

Indemnity & Fixed Benefit Plans

All types of health insurance plans are classified as classified as indemnity and fixed benefit plans. The features of each of the plans are given below:

Indemnity

Under these plans, expenses are covered up to the sum insured. For instance, if you have purchased a health insurance plan for Rs. 5.00 lakhs, expenses are covered by Rs. 5.00 lakhs. The policyholder can make multiple claims to the extent of the sum insured. The claims are settled in two ways:

  • The policyholder bears the expenses and then submits a claim application for reimbursement.

  • Cashless hospitalisation wherein there is no upfront payment. The insurance company coordinates with the hospital directly for approval of the expenses and makes the bill payment directly.

Fixed Benefits

This plan has a lump sum payment approach. The sum insured will be paid in a lump sum for the treatment cost of a critical illness or medical condition. This fixed benefit is typically for plans like critical illness insurance, daily hospital cash, or personal accident cover. 

How does health insurance work?

Health insurance policies primarily work based on the concept of risk sharing. When you buy different types of health insurance plans, you transfer the risk of any medical emergency or high hospitalization cost to the insurer (also called the insurance company). The insurance company, in exchange, offers coverage for your medical expenses incurred during the policy tenure, such as planned surgery, emergency hospitalization, etc. 

Importance of Health Insurance

Health insurance is a must-have, considering the soaring treatment costs. If planned properly, you can handle medical emergencies without much financial stress. Apart from providing financial security, the other reasons why you should have a health insurance plan are:

  • Financial Assistance

Unexpected medical expenses can create financial instability.  The expensive costs involved in medical treatments will be taken care of by the health insurance plan and you can focus on treatment and recovery. 

  • Tax Benefits

A health insurance plan will reduce your tax burden. The premiums paid towards health insurance plans are eligible for deduction under Section 80D of the Income Tax Act 1961#.

  • Investment plus savings

Once you have invested in a healthcare plan, you can be worry-free about treatment costs. The insurance provider will take care of the expenses incurred.

  • Annual health checkups

Annual health checkups help in keeping fit and proactively working towards overall well-being. Some health insurance plans cover the annual health checkup costs, and you need not miss the routine checkup for want of funds.

  • Deal with Medical Inflation

Investing in a health insurance plan helps you deal with rising medical costs without burning a hole in your pocket.

  • Includes complex procedures

Health insurance plans also provide coverage for complex procedures like bariatric surgeries, which is a relief for people suffering from obesity-related issues.

  • Advantages for organ donors

If you are an organ donor, health insurance plans provide coverage. The coverage is up to the sum insured.

  • Coverage for alternative treatments

Some types of health insurance plans provide alternative treatments like Homeopathy and Ayurveda.

Key Points to Keep in Mind When Purchasing Health Insurance

There are various types of health insurance plans, and there is a plan to suit the requirements of every individual. While you have to invest in a health insurance plan that aligns with your specific needs and budget, you should also keep the following points in mind before buying a policy. 

  • Deductibles

Before you buy the health insurance policy you should review the policy for deductibles. Deductibles are a percentage of the expenses incurred at the time of claim settlement. The rest will be taken care of by the insurance company.

  • Sum insured

You should ensure that the sum insured is sufficient to cover your medical expenses as well as the other members included in the policy. Otherwise, the differential costs will have to be borne by you. 

  • Waiting period

Some types of health insurance plans have a waiting period for pre-existing medical conditions. You should go for a plan that has zero waiting period.

  • Medical history of family members

The medical history of family members impacts the premium costs. For the cost incurred towards the health insurance plan you intend to purchase to be within your budget, you should consider the medical history of family members.

  • Age of the beneficiaries

Age is an important factor as it determines the premium, waiting period and renewability of the plans. Various types of insurance plans depend on the age of the buyer. 

  • Exclusions

Checking the exclusions in the plan is imperative. Only by knowing what is not covered under the plan you can buy a plan that suits your needs. 

  • Claim Settlement Process

Study the reviews of other customers about the claim settlement process of the insurance company. Go for an insurance company where the claim settlement process is simple. If online claim application provision is available it is much better. 

  • Annual health checkups and value-added services

Choose a plan that offers coverage for annual health checkups. Also, check if the insurer offers discounts on medicines, and has cover for online consultations and lab tests and imaging. 

  • Maternity cover

A health insurance plan with maternity insurance as an add-on should be preferred. This will cover the pre/post-natal and delivery expenses. Some plans even provide newborn baby cover as well.

  • Lifetime renewability

Lifetime renewability is the option to renew the policy throughout your life without any age limit or restrictions. So check the renewability feature of the plan before making a decision.

  • Network hospitals

For easy access to medical care, the insurance company should have a vast network of hospitals on its list. Also, network hospitals provide cashless hospitalisation, which reduces your financial burden. 

Why buy health insurance?

Here’s a list of reasons why you should buy a health insurance policy:

1. Protection against high medical costs:

Health insurance policies can greatly help you cover the high costs of medical treatments, which can otherwise burn a deep hole in your pocket and even wipe out your entire life savings. Medical treatment can turn out to be very expensive without health insurance coverage, especially with the rising medical costs in India.

2. Access to preventative care:

Another benefit of buying health insurance is that many policies offer coverage towards preventative care services like routine check-ups, immunizations, and screenings. All such services can help you keep your health in check and detect any health issues early on.

3. Network of healthcare providers:

Most health insurance policies have a list that mentions their network of healthcare providers, who can be accessed for medical care at discounted rates.

4. Peace of mind:

Last but not least, buying a reliable and adequate health insurance policy that covers you and your family gives you much-needed peace of mind, knowing that any medical emergency can be taken care of sufficiently. 

Summary

With a lot of players in the market offering different types of health insurance plans, the options are unlimited for you. Choosing a plan that suits your specific needs and is within your budget is crucial. You have various plans like individual insurance plans, family floater, critical illness insurance, etc. Understand the features of each of the plans and consider the factors listed in the article for an informed buy. Invest in a health insurance plan now if you have not to avoid financial crises during medical emergencies.

FAQs on Types of Health Insurance

Q. What are the major types of health insurance in India?

The major types of health insurance in India are individual health insurance, family floater insurance, senior citizen insurance, group insurance, maternity insurance, and critical illness insurance.

Q. How many types of health policy are there?

There are two types of health policy. They are indemnity policy and fixed benefit policy. Under the indemnity policy, you can make any number of claims up to the sum insured. The fixed benefit policy provides the sum insured in a lump sum for the treatment of the illness diagnosed.

Q. What is health insurance?

Health insurance is an insurance product that covers the surgical and medical expenses of the insured. It reimburses the expenses incurred for the treatment of an illness or injury, or it pays the hospital directly.

Q. Why is health insurance important?

Health insurance is important due to the financial assistance, tax benefits, protection against high medical costs, access to preventive healthcare, and network hospitals it offers.

Q. How to claim health insurance?

You can claim your health insurance plan after you are hospitalised or avail of treatment. You should raise a claim 24 hours after emergency hospitalisation or 48 hours before planned hospitalisation.

Q. Can I combine different types of health insurance plans?

As per IRDAI rules, if you have multiple types of health insurance policies that provide fixed benefits, each insurer has to make the claim payments independent of any other payments received from other similar policies. Also, if you have multiple health insurance policies taken during a period from one or more insurers in order to indemnify treatment costs, you do have the right to get a settlement of the claim in terms of any of the policies.

Q. Are there tax benefits for different types of health insurance?

The premium you pay towards your health insurance policy, whether it is an individual policy, family floater plan, or any other type, can be claimed as a tax deduction under Section 80D#, provided the policy has been taken for self, family, or parents.

The claim can be up to Rs 25,000 if paid towards the premium of policy taken for self, spouse, dependent children, or non-senior citizen parents. And it can be up to Rs 50,000 if self, family and parents are above 60 years of age. If the self and family are below 60 years of age but the parents are senior citizens, then up to Rs 75,000 can be claimed as a tax deduction for medical insurance premium.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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Here's all you should know about Health Insurance.

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# Tax benefits are subject to conditions under Section 80D and other provisions of the Income Tax Act, 1961. Tax Laws are subject to change from time to time.

1. Annual Premium amount ₹ 1869 for Male aged 35 years, Base Benefit, 10 years term, Regular Pay option, Sum Assured=10 lakhs, excluding Taxes & levies as applicable.

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