Health Insurance Plan

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Health insurance is one of the blooming insurance sector all over the world and the same is for India. Health care is a crucial part of the financial cycle where most people prefer investing in. With the second-highest population in the world, India benefits a considerably good amount of money from the health care department. In the previous year, approximately 500 million people in the country failed to benefit from their health insurance cover meaning that much revenue for the insurance company.

The growth of the insurance sector has increased over the past few years. Based on a survey carried out in the year 2014 it was declared that almost 80% of the Indian citizens didn't have a health insurance cover. Among the rest, only 18% of the urban population had a health cover in which 12% were government-funded and 14% of the rural population had a health cover in which 13% were government-funded.

However, due to many awareness programs and services, the situation in the country has widely changed. There are health insurance plans for both individual and family cover so that purchasing a single-family plan could cover the health requirements of the whole family. The business of health insurance in Indian began in the year 1986 and since then there have been many changes to further improve the health insurance package to specifically fit the demands and pockets of the customers. The government has been planning to introduce new health insurance that can be used by the underprivileged. The insurance is named as Modicare and is still in progress.

Types of Insurance Plans

A typical health insurance plan in India was designed to pay for the hospitalization services and other medical treatments while the patient was admitted to the hospital. Those were the mediclaim policies and did not include other services as the policies do in the present time. In the year 2000, Indian health insurance plans were modified and many creative products and services like family floater Add-On, critical illness, cashless service etc were added to the health insurance plan. Addition of such useful services gave a much-needed boost to the health insurance industry in India. Still, a lack of competition affects the outsourcing of the health coverage department.

Let's look at the different types of health policies in India :

Hospitalization

These are one of the most simple health insurance plans which provide financial support for the hospitalization and other medical bills related to the hospital. The bills are paid using the sum insured. In a single plan, the sum insured is divided on an individual base while that in a family plan, the sum insured is divided on a floater base. In a family health plan, any member included in the policy can use the sum insured amount for the medical treatments.

Furthermore, several Add-Ons are attached to this plan like maternity benefit, newborn cover, pre/post-hospitalization, in-house medical care etc

Maternity Health Plan

One of the most popular health insurance plans which takes care of the medical need of a pregnant woman is maternity health insurance plans. The insurer of the plan is responsible to furnish all medical care including pre/post natal care, delivery of the child etc. Due to the network hospitals, the ambulance cost is also covered in the insurance plan.

The plan is advertised and supported by the Maternity Benefit Act which states that women working in a non ESI establishment and those working in factories, mines etc should be eligible for the maternity health insurance plan.

Pre-Existing Illness Plan

As the name signifies, the plan covers the medical needs of a person with a pre-existing medical condition such as kidney disease, heart disease, diabetes etc. It is best suitable for those having a history of serious medical illness in the family. The plan is specially modelled considering that this term or having a pre-existing illness is excluded from the clause of a basic health insurance plan.

Elderly insurance plan

An extensive health insurance plan for the elderly is a must-have. Therefore, a separate plan dedicated to the health protection of senior citizens is quite genius because age is an important factor in health insurance coverage. The older one gets, the higher the prices are.

Pro-Active Plans

These plans are not very common and most companies do not provide this plan under their health insurance coverage. The plan is designed to fit the challenges of the Indian economy and market. The plan offers coverage depending on the medical and lifestyle choices of the customer which can result in critical conditions.

Daily Cash Benefit Plan

This plan is subjected to those admitted to the hospital and have a need for instant cash every day. The plan grants a fixed amount of money to be given to the insured during the hospitalization period to fulfil day-to-day medical needs like medicines, injections etc.

Terminal Disease

This plan is dedicated to giving financial security to the insured person during a medical crisis such as being diagnosed with a terminal illness. The policy is established to deliver a fixed amount of sum to the insured. However, the terminal illness should be among the one's mentioned in the health insurance clause like heart attack, cancer etc. These diseases are generally specific to a certain audience and are not very common but require a high amount of money in the treatment.

Family Floater Plan

A family floater health insurance plan is quite similar to the hospitalization plan. This plan is a group insurance plan which includes all members of a family ( different companies have different criteria ). The plan provides financial support for all members of the plan. This plan is recommended for the families where not all members have health issues because the plan cannot cover all members at the same time.

Customised Plans

Customised plans for health insurance cover are modelled keeping in mind the current situation of the country and thus plans accordingly. The current situation means the kind of disease which has been more prevalent in the country and which has caused more recent deaths. For example, the current situation would suggest a customised plan against Covid-19. This type of plan is offered by only a few insurance companies in India.

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Plans by the government

  • ESI schemes cover the private sector workers and labourers which is calculated to be around 55 million people.
  • The insurance scheme is a central government-funded plan which offers assistance to the government employees and the one's who are retired.
  • RSBY is a strategy to help the families of the underprivileged in the country which consists of nearly 40 million families.

Schemes by the state government

  • The Andra Pradesh government helps the families whose annual earnings are below the poverty line or is Rs. 75,000. The total number of families this scheme encompasses is around 70 million.
  • Tamil Nadu state government also follows the same scheme helping the poor families in the state of nearly 40 million people.
  • Lastly, the state government of Karnataka funds the health insurance scheme which covers the rural poor families of more than 3 million.

Benefits

It is of no use to invest all your savings and buy an insurance policy which is of no use or that isn't too beneficial. Therefore, it is essential to study and be cognizant of all the benefits and advantages before purchasing an insurance policy, so let's take a look at some of the benefits of the health insurance policy.

  • Cashless Service - As mentioned above, one of the major benefits of the health insurance policy nowadays is the cashless service which the policyholder is eligible to receive at any of the network hospitals. Although the policy offers reimbursement or direct payment still one can go entirely cashless which ultimately reduces paperwork and other formalities.
  • Pre/post-hospitalization charges - The health insurance policy along with hospital charges also offers assistance in managing other pre/post-hospitalization expenses. This can include domicile services for patients that can't be moved to the hospital. With this inclusion, all health-related charges against any mentioned illness which is legally covered under the insurance are fully taken care of.
  • Ambulance Service - Even the rent for the ambulance required to carry the patient from one place to another is included in the health insurance coverage.
  • No Claim Bonus - No claim bonus is an advantage given to the policyholder as a token of appreciation if the policyholder has not made any claims for the previous years. The bonus is granted either in the form of an increment to the sum insured of the policy or as a discount upon the annual premium amount which the policyholder pays. This is calculated at the time of renewal.
  • Health check-up - A regular health check-up is very crucial to avoid any potential illness or diseases. Most health insurance policies provide free health check-ups if not the charge is reimbursed by the insurer. Also, this feature can be added as an Add-on.
  • Sub-limits on Room rent - The rental charge for a hospital room is an important factor which apparently affects the size of the total bill tremendously. So if you have a limited sum insured which does not wrap the total medical charge them, in that case, the policyholder is responsible for the remaining amount. Although the policy claims to cover all the hospital charges there can be a sub-limit to the amount of money that can be spent.
  • Payment sharing - This unique feature helps the insured to reduce the policy cost by sharing the payment on the medical claims. This is a mutual agreement between the insurer and the insured so that there is no confusion later on. The sum insured of the policy has no effect of this arrangement, however, it does reduces the premium amount by some percentage.

Cost and Validity

Cost - The price range for health insurance policies are different considering the wide population of the country where most people are below the minimum wage. One can even get a policy at a sum insurer amount of Rs. 5,000 for the small insurance policies. While the sum insured amount can be as high as Rs. 50 lakhs or more. However, the most common insurance rate is ₹1 to ₹5 lakhs.

Validity - The validity of a health insurance policy entirely depends on the kind of company the insurance is purchased from. If it's from a non-insurance company it generally is valid for a year or two, on the other hand, a health insurance policy from a renowned insurance company may last for several years.

Payment Modes

Payment under a health insurance policy can be done through different mediums. One such way is to directly pay the medical bill at the hospital which the insurance company pays and not the policyholder or the policyholder can pay the bills for the time being and later he/she can claim for reimbursement. The insurance company immediately reimburses the money used in the medical treatments during the patients stay at the hospital.

Also, using the cashless scheme the policyholder can opt to not pay any bills during his/her stay at one of the network hospitals of the insurance company. Note the cashless service can only be availed at the network hospitals and not any other hospital.

Health Insurance Premium Calculator

After witnessing the several benefits offered by the health insurance policy, it is now time to know what the insured has to pay in return to avail the exciting benefits. The premium is the fixed amount of money which the policyholder is supposed to pay to the insurance company in order to continue the insurance bond. This premium is mutually agreed upon at the time when the policy is bought, however, there are several factors that can further increase or decrease the premium amount.

Being the policyholder one would always want to know how this premium is calculated or how one can know for sure what the premium amount is before the due date. For this reason, there are online premium calculator tools which help in knowing the premium amount. The tool upon feeding the right information gives the exact amount which the insured has to pay before the due date.

Factors influencing Premium

Medical Background

It is quite universal that health insurance premiums for smokers are higher than what it is for none-smokers. Similarly, other medical conditions can affect the premium amount considerably. This is the reason why almost all insurance company prefer having a full medical check-up if the insured or the whole family ( in family floater pack ) before selling the policy and fixing the sum insured.

Age and Gender

Age is the most commonly known factor which affects the premium amount. The older you get the higher your premiums are for the health insurance plan. This is the reason why it is advised to buy health insurance as early as possible because then the premiums are reasonable. Reason being the fact that the older you get, more likely you are to get sick.

There is even a separate type of health insurance plan entirely dedicated to the senior citizens so that they can get equal benefits.

Likewise, age is a crucial determiner of health insurance premiums. The point here is that men are more likely to suffer from heart diseases and strokes than women.

Best health insurance plan in 2020

In this competitive industry such as insurance, it is quite difficult to find out the best plans. The statistics change every month and it is hard to identify the position of the insurance company. However, based on the recent survey let's discuss the top 5 health insurance plans by 5 most popular insurance providers.

  • Aditya Birla Activ Assure Diamond Plan - This plan is offered by one of the most trusted brands, Aditya Birla Capital. The plan is equipped with a large sum insured and it includes all the basic health insurance benefits such as hospitalization, Emergency services etc. There is moreover an alternative for cancer hospitalization.

    The minimum sum insured is - Rs. 2 Lakhs

    The maximum sum insured is - Rs. 2 crore

    Network Hospitals - 6000+

    Some of the exclusive benefits of the plan are room up-gradation, super NCB, health coach benefit, domestic as well as international service, organ transplant charges and vaccination benefit.

  • Bajaj Allianz Health-Guard Plan - The Health-Guard Plan is brought to you by Bajaj Allianz Insurance company which makes it more desirable and approachable for most people because of its wide network all over the country. The plan is available for both individual and family floater. Some of the other coverage of the plan is medical charges during pregnancy and financial aid at the time of a newborn baby.

    The minimum sum insured is - Rs. 1.5 lakh

    The maximum sum insured is - Rs. 50 lakh

    Network Hospitals- 6500+

    Some of the exclusive benefits of the plan are pre/post-hospitalization charges, rod ambulance, convalescence benefit, homoeopathic treatment and bariatric surgery expense

  • Bharti AXA Smart Health Insurance Plan - Again one of the most in-demand health insurance plan is by Bharti AXA. The health insurance plan covers all the health-related requirements of the insured during the term of the policy and assists the insured in maintaining an economic balance.

    Some of the exclusive benefits of the plan are tax saving, renewal discount, no claim bonus, free health check-ups, critical illness coverage, Ayush Treatment Cover and day-care medical service charges.

  • Max Bupa Health Companion Individual Plan - This extensive health insurance plan is produced by Max Bupa to cover all the financial needs of an individual during a medical crisis. The plan is focused to deliver the needs of a single person or small families. The plan covers all the basic benefits of a health insurance plan. The plan is offered in three different variants depending on the range of cover one chooses to buy. The plan has also an alternative of two years of the policy tenure.

    Some of the exclusive benefits of the plans are no cap on room rent, animal bite vaccination charge, refill benefit and look fe time renewal benefit.

  • HDFC ERGO Health Optima Restore Plan - Health Optima by HDFC ERGO is the plan most popular among insurance customers. The plan was earlier known as Apollo Munich Optima Restore Plan. The plan has a wide range of features that makes it unique and more desirable. It also has a restore feature which makes it uniquely attractive. The restore feature refills the sum insured if it has been maxed out. The company has a reputation for having the fastest reimbursement service.

    The minimum sum insured - Rs. 3 lakh

    The maximum sum insured - Rs. 50 lakh

    Network Hospitals - 10000+

    Some of the exclusive benefits of the plan are E-opinion, restore benefits, stay Active Benefit, multiplier benefit and sum insured enhancement.

Frequently Asked Questions

There are a lot of things which one should consider before buying a health insurance plan. And some of the most important among these are :

Claim Ration -Claim settlement ratio is the proof of the quality of the insurer to fulfil the claim made by the insured or the nominee after the demise of the insured. The simple formula for claim settlement is that the higher the claim settlement ratio the better is the insurance company.

Sum assured amount - The most important part of any insurance policy is to fulfil the requirements of the insured and their family members. Sum assured is the amount which is eventually used to take care of the medical requirements of the insured person, therefore, it is important to choose wisely the amount of sum assured. One should also keep in mind other factors such as age, income etc before evaluating the sum assured amount.

Network Hospitals - one of the widely used services of the health insurance policy is the cashless service which is provided to the insured and his/her family members who are attached to the insurance policy. This service is only available at one of the network hospitals of the insurance company. Hence, an insurer with a wide range of network hospitals is highly recommended.

Pregnancy Benefits - It is no lie that the maternity expenses are flying above the minimum pay grade. Therefore, any health insurance policy must include pregnancy services so that the insured could be spared from the burden of medical bills related to pregnancy.

The most important papers/documents required while buying a health insurance plan are :

Age Proof - Age is an important factor in calculating the sum assured of the health policy, therefore, it is essential for the insurance company to check the age of the insured using documents that can legally prove the age. The eligible documents for the purpose are :

  • Voter ID Card
  • Pan Card
  • Driving License
  • Aadhar card
  • Passport
  • Birth Certificate

ID proof - Identity is no doubt a high determiner of the insured person’s existence. It is also useful when the claims after the death of the insured are made by the beneficiary. The eligible documents for the purpose are :

  • Voter ID card
  • Passport
  • Aadhaar Card
  • Driving License

Address Proof - To be in touch with the policyholder and the insured, the insurance company will need more than a phone number to be able to contact the owner of the policy. And for that purpose, valid address proof is essential to be submitted by the insured. It can a copy of any one of the following documents :

  • Ration Card
  • Passport
  • Driving License
  • Rent paper ( if required )
  • PAN card
  • Aadhaar card
  • Bills including electricity, gas, phone etc

A photograph preferably of a passport size

Medical history reports

Signed and complete proposal form

Well, there is no correct answer to this question because age is an important element in the health insurance policy because age determines what the sum assured and the premium costs will be. The reason behind this is simple, the older you get more likely you are to get sick and die. Therefore, having a high-value sum assured is quite essential if you are older than compared to when you are young and immune. But accidents can happen at any given age and death doesn't discriminate between old and young. So it is wise to have a comprehensive health insurance plan as early as possible. But if you look from the perspective of the cost and expense of health insurance plan, one should probably buy health insurance at the age of 18 years because the younger you are the cheaper the policy is for you to afford. Some of the influencing factors are :

Premiums cost - premiums are relatively lower if you are young than compared to the premiums when you are older because the sum assured increases with your age.

No medical tests - It is mandatory for old people to take a medical test before purchasing a health insurance plan because the insurer needs to be sure of all the health conditions or if there's any existing illness. But for a young person, it is not mandatory to take a medical test because it is unlikely to develop a serious medical condition when you are young.

Yes, it is possible to have more than one health insurance policy by an individual. Having multiple health insurance plans is not a rare situation but is quite common among most individuals. Also, if you look closely having more than one health plan can give you more benefits and protects you from unfortunate situations. There are a lot of disease-specific health insurance plans which a person can buy based on their medical condition along with the regular health insurance plan so that he/she can get extra benefits which the basic health plan doesn't include.

Some of the common benefits of having more than one health insurance plan are :

Claim guarantee - It is certainly possible that a claim towards the death benefit or other funds from a health insurance policy can be rejected by the insurance company due to several reasons. In that case, if you have a different policy it can be accepted and you would not have to bear the financial burden.

Smaller premium - It is true that a single plan with all coverage requires a big premium amount but having multiple smaller plans with limited coverage can together add up to a bigger plan having smaller premiums altogether.

Different insurers - it is possible to have multiple health insurance plans by different insurers and not just one. This way you can experience benefits from various insurance providers at the same time.

Medical history of the insured is a crucial factor of any health insurance plan. Whether it is single or family floater plan, having a full medical check-up is beneficial for both the insurer and the insured. Most people try to escape the need for a medical test while purchasing a health insurance plan but what they do not realise is that a medical test can reveal a medical condition that might not be a part of the health insurance coverage. Therefore, the policy would not be of any use to the insured if it cannot deliver the benefits required for that specific illness. In some cases, the medical test can even indicate a terminal illness which is not included in the plan hence it can give you a genuine reason to buy the policy even more. The sum assured and ultimately the premium amount is also affected by the insured’s medical conditions. Here's a list of some of the benefits of undergoing a medical test before buying health insurance :

Prevent costly plans - Having a medical test before purchasing the health insurance plan enables you to skip a few extra cash on the policy itself. Health plans without a medical test are more expensive than a plan with a medical test.

To cover all conditions - As mentioned above going through a medical test can reveal several medical conditions which you might not be aware of before. Hence, being cognizant of such conditions helps you plan more appropriately for the situation.

Well, a perfect answer to this question doesn't exist because the cost of a health insurance plan depends on various diverse features such as a person’s age, income, health condition etc. All these factors help in evaluating the sum assured for the health insurance policy which eventually manages the premium amount which the policyholder is responsible to pay either annually or monthly depending on the term and mode of the policy. Along with this, there are Add-Ons which are attached to the basic health insurance plan and so the cost of these riders are also included in the premium amount. Eventually, all this adds up to form the total cost of the health insurance plan for a single person. And as you can see most of these things are person-specific and so it is hard to calculate the exact cost of a health insurance plan in a general term

But based on the most recent costs and graphs of single health insurance plan, an average cost for a 35-year-old male on a sum assured of Rs. 5 lakhs would be around Rs. 5,000- 7,000 yearly.

In order to estimate the cost of health insurance plans, one must look at different features of his/her health insurance policy. These features are mostly exclusive for each policy based on the insured’s medical health, age and other elements. Also, if it is a family floater plan then the cost is seemingly higher than a regular health insurance plan.

Most insurance companies provide various Add-On features as well, which you can choose to attach to your basic insurance policy. These riders are added on an additional cost. Some of the most popular Add-Ons are illness-specific, day-care service, road ambulance etc. But availing these extra benefit requires paying extra money.

Based on the recent statistics, a health insurance plan of Rs. 5 lakhs on a family floater basis including wife/husband and a child costs nearly Rs. 10,000 - 17,000 annually. But the cost of this can vary greatly if there are any changes made to the basic policy.

There are various types of health insurance plans offered by different insurance companies. Some of the most popular types of health insurance plans are -

Terminal illness plan - This plan is available to those suffering from a terminal illness and requires protection against huge hospital bills. The plan offers a fixed sum of money to the insured for his/her hospital expenses and treatment procedure for the illness.

Elderly health plan - Although it is advised to buy a health insurance plan as early as possible. Still, if you find yourself or a loved one without a health insurance plan after the age of 60 years then this health plan is modelled for you. It provides financial protection against medical bills for people above the age of 60 years.

Maternity health insurance - Bills and hospital expenses can be relatively higher for pregnancy than regular treatment. Therefore, this health plan is designed to assist during the vital time of pregnancy. It offers monetary support for the pregnant woman along with related medical care

Singles health insurance - This is the health insurance plan for a single person under which a life long coverage against all medical care is offered. An individual with the help of this plan is secured and taken care of by the insurance company in exchange for a premium payment.

Family health insurance - Having a family health insurance gives you a chance to protect all your family members including yourself, all under a single health insurance plan. It is like an umbrella of protective cover against medical bills for your whole family. The family plan can include you, your spouse and dependant children.

Unit linked health plan - Like other unit-linked plans, a unit-linked health plan is also a two-in-one savings plus protection plan offered by most insurance companies. This way, you can be free of medical expenses as well as store a little extra amount by investing in the market funds through the insurance company.

Group health insurance - As the name suggests, this type of health insurance plan is preferred when buying a policy for a group. It offers medical care support in the form of financial aid to the whole group. Usually, this type of plan is bought by companies, organizations and corporate firms for the group of employees.

Family health insurance - Buying health insurance plan can be hectic especially when you have a big family as it obliges formalities such as paperwork, instalments etc. Therefore, a family health insurance plan works as a multi-purpose insurance policy that covers you, your spouse and your dependent children. The policy can also further expand to include your parents or in-laws at an additional premium cost.

Everyday cash plan - This plan is generally used as an Add-On instead of a single insurance policy. The plan offers additional money to the insured for extra hospital expenses apart from medication and treatment cost. The plan promises to deliver a fixed sum of cash irrespective of the everyday needs meaning if the fixed sum for the policy is Rs. 2000 and the everyday cost is Rs. 1000 only, still, the fixed two thousand is given to the insured.

Personal Accident Plan - This type of health insurance plan is benefitted when the insured gets involved in an accident and so is in need of financial support for the medical expenses. Accidents can be damaging both physically and mentally if someone is not prepared or is suffering from a loss economically. In that case, a personal accident plan helps the insured by providing financial support against temporary disability, permanent disability or death.

ULIP plans - Like any other unit-linked investment plan, a health insurance plan with an investment factor doubles up the benefits of a regular health insurance plan by providing both health and wealth privileges. The premiums for the insurance is used simultaneously as the sum assured and for market investment. In time, the accumulated sum from the investment is given to the insured in the form of bonus money.

Group health insurance - It is often witnessed that most national and multinational companies offer additional benefits to their employees apart from the basic salary and health insurance is one of them. Therefore, keeping in mind this module of companies, health insurance providers offer group health insurance plans for the bunch of employees all under a single plan. It offers all basic health care facilities which are involved in a health insurance plan.

Singles health insurance - The most suitable health insurance plan for a single person with all of the health insurance benefits is the singles health insurance plan. It is offered for a fixed premium amount that the insured pays the instance company in instalments which is either monthly or yearly for a sum assured. The sum assured for an individual is fixed depending on various factors such as the person’s medical history, age, existing diseases etc. The premium is also fixed to match the sum assured so that the insurer can offer the best medical care to the insured in hard times.

Critical disease Insurance - This plan can be used both as a single plan or as an Add-On attached to the basic insurance plan. The plan covers the critical diseases which require a lot of money for the treatment and procedures involved in the process. The plan is focused on those illnesses which are mentioned in the bond of the insurance policy such as heart attack, kidney failure, cancer etc and can cause a big burn in the pocket. Therefore, in times like such, critical disease insurance plan assists with financial aid to lessen the burden.

Everyday cash plan - As the name suggests, this plan acts as a piggy bank for the insured by providing everyday cash to the insured so that extra activities during his/her stay at the hospital could be easily covered. The daily cash which is offered is fixed and agreed upon during the time of purchasing and cannot be changed later. The extra money comes in handy for additional expenses during a hospital stay such as medicines, food etc.

Levels defined in a health insurance plan is the type of payment mode you choose between the insurance company and yourself. These are also called metal levels for the insurance policy. The most common levels for a policy are bronze, silver, gold and platinum. However, these different levels of health policies have nothing to do with the type or the quality of health insurance plans. It only indicates the type of payment agreement which is set between the insured and the insurer.

For a different level, the insured is supposed to pay a different amount of sum for the policy every year. This amount is for the premium cost, deductibles, copayments etc based on whatever that is included in your policy.