This article on types of Health Insurance plans is going to be a long but important one. And it is strongly recommended for reading if you are looking to buy a health insurance plan or mediclaim, shortly.
Choosing the right health insurance plan (or mediclaim or medical insurance) can be a lot tougher than say, choosing a term insurance plan. And there are 2 simple reasons for this.
1. You are inundated with choices of variants in health insurance, with each company deciding their own sweet spot of the right balance of features and benefits to cover that will be of value to the customer, versus the kind of risks it is able to cover at a reasonable price.
2. Unlike term insurance, claims for health insurance plans can be tricky. In term insurance you are either dead or alive. In the case of health insurance however, you could be right in expecting the claim for a certain hospitalization expense, yet the insurance company could also be right in pointing out that it is either not covered in the policy or covered only to a certain limit that may not be good enough for you. So for health insurance claims, there are a lot more greys, rather that clear blacks or whites.
SOME BASICS FIRST
Health Insurance plans are not a marketing gimmick but a necessity. The best time to buy it is the late 20s for men, when they are healthy. For women, early 20s is the ideal time, and definitely before they get married (and before pregnancy). Any further delay and you may get an illness that may make you never be eligible for a health insurance for the rest of your life!
Health Insurance plans cover you for expenses incurred within a set of health-related events, e.g. consultation, check-ups, tests, surgeries, medical conveniences and even post-operative care. The cover is generally triggered when you stay in hospital for more than 24 hours.
Health Insurance plans are offered by more than 24 companies in India. This is such an important segment that there are even some companies which offer health insurance exclusively.
INDIVIDUAL Health Insurance Plans
These are mediclaim policies which can be taken only for a particular individual. It has a Sum Assured, which is the maximum claim that can be availed of only for that individual’s medical expenses, in a year. In the case of a family, you can take individual mediclaim policies for each person in the family, without any restriction on number of members. Each policy is independent of the other.
FAMILY FLOATER Health Insurance Plans
Family Floater policies can be taken for a pool of people, typically family members. The insurance cover ‘floats’ between different members of the family, and any one or more members of the family can together use any amount up to the maximum Sum Assured, in a year. Once a claim is made in a year, the claimable amount comes down by that much for the rest of the year. Any family member can continue to claim from the balance amount. In the next year, once the policy is renewed, the entire Sum Assured is again available for all members of the family.
FIXED BENEFIT Health Insurance Plans
Unlike other health insurance plans, Fixed Benefit plans give you a guaranteed fixed payouts irrespective of the actual hospital bill amount. Your can use it the way you want, for room charges, medicines, surgery, or anything other expense. All you need to provide is the diagnosis by a certified medical practitioner or a the medical bills. The plan may sometimes even have a fixed payout for each day of hospitalization and/or a fixed payout for different categories of surgeries. To some extent, this is like a critical illness plan, but it covers everything and not just specific critical illnesses. The good thing about such plans is that they also cover many minor day-care procedures which do not need 24-hour hospitalization. Also, you can claim for this over and above your other health insurance.
Such plans are used a lot for post-operative care(e.g. a nurse, physiotherapy, etc.) and supplementary medical expenses (e.g. expensive medicines that may have to be taken after hospitalization and during recovery phase, etc.). We recommend that this kind of plan is always taken in addition to a mediclaim policy and not standalone.
TOP-UP Health Insurance Plans
A type of mediclaim plan that is used to top-up your existing health insurance from any insurance company. It works to provide additional coverage over and above the existing coverage, provided a threshold level or deductible level is used up. Such a top-up health insurance plan is generally inexpensive and is a great way to increase health expenses protection for the family.
GROUP Health Insurance Plans
A group health insurance plan is one master plan for a group of similar individuals, e.g. all junior employees in an organization, their parents and up to 2 children. Most companies offer Group insurance today as a perk or employee benefit, and the plans are very customizable and inexpensive compared to individual health insurance. The problem is that such a plan remains on paper and most employees are not aware of what exactly the benefits of the policy are and whether it is sufficient for them and their family members. Many of them also have sub-limits and other restrictions (such as no renewal on exit from company) which end up making the plan not completely effective.