"Health is Wealth" – This maxim itself describes the importance of health. Medical care is becoming progressively expensive with each passing day. It can hamper our financial planning.

Buying Health Insurance protects us from sudden, unforeseen costs of hospitalization which would otherwise make a dent into our savings or lead to indebtedness. While the health care is becoming expensive, buying Health Insurance is much more affordable.

Insured is a person who buys insurance policy whose interests are protected by an insurance policy. Insured can be an individual or a group (consists of family members).

It is the maximum amount for a year that an insurance company can pay to the policyholder (insured) in the event of his/her hospitalization.

Depending on the need & choice of the insured a wide variety of insurance products are available nowadays with a range of health cover benefits. Some of them are –

Hospitalization:

Hospitalization cover is the most common form of health insurance. Such plans primarily cover payments for hospital stays, surgery, and related expenses incurred on the insured’s health. Policy can be taken either for an Individual or for Family. For instance, consider a family of 4 members, each member having health cover of Rs.1 lakh. Here a member can claim reimbursement for a maximum of Rs.1 lakh. Now if the same family opts for a family health plan cover of Rs.4 lakh, then any member of the family covered under the policy can claim reimbursement for more than Rs.1 lakh, subject to maximum of Rs.4 lakh across all insured members. Such plans are known as Family Floater Policy.

Hospital Daily Cash Benefit Plans:

Such plan pays a certain prefixed amount to the policyholder for each day of hospitalization. It is not in any way related to the actual expenses incurred in the hospital. Such plans are very helpful to cover adjunct costs and to some extent, provide for income loss due to hospitalization. Depending on the plan the number of days of cash benefit is capped. For instance, daily cash benefit of Rs.5,000 for maximum of 50 days during the policy period.

Critical Illness Plans:

Any major sickness or illness can burn a bigger hole in the patient’s pocket. Such exorbitant cost derails the finances of the family. Here, Critical Illness Insurance comes a real survivor. Here, the insurance company offers a lump sum amount in case the insured gets diagnosed with any of the critical illness mentioned in the policy document. Depending on the plan Life threatening critical illnesses such as heart attack, cancer, kidney failures, strokes, etc. are covered under critical illness insurance.

The Premium is the amount paid by the Insured (buyer) to the Insurer (Insurance Company) to get the benefits as mentioned in the insurance policy.

You would need to pay higher premiums to avail a higher sum assured. Age is the primary factor that determines the premium- the older you are, the higher becomes the premium because you are prone to illness. Subsisting diseases, smoking habits, medical history, among others, also weighing in determining premiums.

The health insurer usually provides either direct payment to the hospital (known as cashless facility) or reimburses to the insured the expenses associated with illness and injuries or disburses a fixed benefit on occurrence of an illness.

It is the reward offered by the insurer for not making claim during the tenure of the policy. The NCB amount gets accumulated to the sum assured of the insured. With drastic rise in medical costs every year, the NCB offered by a health insurance company can be very helpful in covering increased medical expenses.

Although it is aimed at providing health cover, several pre-existing diseases (as mentioned in the policy document) are excluded under a Health Insurance policy. There would also be several standard exclusions like cost of hearing aids, visual aids (spectacles, lenses), cosmetic surgery, abuse of alcohol & drugs, hospitalization due to self-inflicted injury (suicide) among others.

Yes. IRDAI had issued the Circular on 10th February 2011 in the interest of the policy holder. As directed in the circular you can change Health Insurance policy from one insurance company to another without losing the benefits you have accumulated. This applies not only to switching from one insurance company to another, but also from one plan to another with the same insurer.

Unless specifically prescribed in the policy, an insured is allowed any number of claims during the policy period, subject to maximum limit of the sum assured under the policy.

Health insurance comes with attractive tax benefits as an added incentive. There is an exclusive section of the Income Tax Act - Section 80D - which provides tax benefits for health insurance. It is unlike the section 80C applicable to Life Insurance wherein other form of investments/ expenditure also qualify for the deduction.

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 without having to pay the hospital bills as the payment is made to the hospital directly by the Third-Party Administrator, on behalf of the insurance company. Cashless facility, however, is not available if you take treatment in a hospital that is not in the network.

Some health insurance policies pay for specified expenses towards general health check-up once in a few years.

It is a one premium and one policy for all members of the family. Family floater is a policy that takes care of medical expenses of your entire family. Any or all insured persons under the policy can avail hospitalization cover subject to maximum limit of sum assured.