What Are the Benefits Of Health Insurance In India?

In this modern, fast-paced life, we are always rushing to get things done. We spend endless hours in front of computers and phone screens, eat fast food, and do not work out as much as we should. All of this has led to severe health conditions becoming more prevalent than ever. Add to this the increasing costs of medical treatment and care. To protect yourself from depleting your savings during a medical emergency, it is imperative to invest in health insurance. Health insurance provides a financial cushion during medical emergencies, covering several significant medical expenses. Read on to learn the many benefits of having health insurance. 

Health Insurance – An Overview

Health insurance is an agreement between a policyholder (insured) and an insurance provider (insurer). Per this agreement, the insurer promises to pay for medical expenses up to a specific sum insured limit per your mediclaim policy clauses. The policy lists numerous health conditions the insured can seek treatment against in case of a medical diagnosis. 

Insurers charge an annual premium in exchange for the coverage offered. Each health insurance policy comes with a specific waiting period, which could be anywhere from 6 to 48 months, depending on the policy type. You can file claims only after riding out the waiting period. 

Health Insurance – Benefits 

The following are the top you ought to know.

• Protects Your Savings

Medical costs like diagnoses, hospitalisation, surgery, consultation fees, medication, etc., cost a lot of money. Several treatments are unimaginably expensive and can put a severe dent in the painstakingly-built savings. Therefore, it is best to safeguard your savings with health insurance. Health insurance covers the diseases, regardless of their treatment costs, provided your insurance company insures the conditions. Your insurer typically covers most of the medical expenses, thus safeguarding your finances. 

• Affordable Annual Premiums When You Start Early

With health insurance, you typically pay a nominal amount to get high-value coverage. For instance, your annual premium of ₹10,000 can get you coverage up to ₹10 lakhs. However, to ensure you get high coverage at a lower cost, you should purchase the policy when you are younger and less likely to file claims. Doing so proves beneficial in many ways. You can easily ride out the waiting period, your premium generally remains the same, and most importantly, you can enjoy the health insurance advantage of the no-claims bonus. E.g., if you do not file claims for five consecutive years, your sum insured increases by 50%. If we take the above example, your sum insured increases from ₹10 lakhs to ₹15 lakhs. The increased sum insured helps you manage the rising costs due to inflation. 

• Tax Saving Benefits

Tax saving is a significant benefit of health insurance in India. You can enjoy tax deductions under section 80D of the Income Tax Act, 1961. The deduction limit typically depends on the age of the insured members.

As an individual below the age of 60 years, purchasing a health insurance policy for yourself, your spouse, and your children makes you eligible to claim ₹25,000 in tax deductions annually. When you buy a health insurance policy for your parents below 60, you can claim an additional annual tax deduction of ₹25,000. If your parents are above the age of 60 (senior citizens), this tax deduction limit increases to ₹50,000. 

As someone below the age of 60 years, if you purchase health insurance for yourself, your spouse and children and a separate policy for your senior citizen parents, you can enjoy annual tax deductions of ₹75,000. When both you and your parents cross the 60 years threshold, buying a mediclaim policy for your kin and your citizen parents, enables you to enjoy annual tax deductions of ₹1 Lakh.

You can avail of additional tax deductions under Section 80DD and Section 80DDB, covering costs of physical disabilities and specific diseases, respectively.

• Covers Expensive Medical Treatments

Several conditions, especially of the cardiovascular and nervous systems, require extensive medical care. Coronary artery bypass graft (CABG) surgeries, permanent paralysis, cancer care, organ transplants, etc., are conditions where you need medical attention for extended periods. The benefit of having health insurance is that it covers all such health conditions. For instance, you can purchase critical illness health insurance plans to avail of a lumpsum sum insured to pay for recurring medical costs. 

Another medical insurance benefit is that it covers hospitalisation and domiciliary expense (in the case of at-home treatments). A typical health insurance policy covers pre and post-hospitalisation costs, including medical tests, consulting fees, medication, etc. With health insurance, you can receive specialised care as it also covers Intensive Care Unit (ICU) room rent. Typically, ICUs are more expensive than standard hospital rooms. 

• Complimentary Health Check-ups

It is crucial to monitor your health from time to time. As a policyholder, you are entitled to medical check-ups during your policy period. The mediclaim policy comes with a pre-determined limit based on the sum insured amount. The frequency of health check-ups also differs across insurance companies. Some companies offer free medical check-ups for every claim-free year. Also, you can buy plans that allow you to avail of check-ups even if you have raised a claim. 

You can undertake health check-ups like blood tests, electrocardiogram (ECG), urine analysis, pap smears, etc, at empanelled diagnostic centres. The insurance company directly pays these centres. However, you can also avail of check-ups at non-network centres. You need to pay for the tests from your pocket, and your insurance provider will reimburse you later.

• Hassle-Free Claims

A crucial benefit of health insurance in India is the convenient claiming process. You can avail of two types of claims – cashless and reimbursement claims. A cashless claim is when your insurance company pays the healthcare facility directly. The caveat is that you must undergo treatment at a hospital within the insurer’s network. Essentially, these hospitals have tie-ups with your insurance provider. You only need to inform your insurer about your chosen network hospital before you get admitted. A representative from your insurance company contacts the hospital and takes care of the expenses.

If you use the second option, i.e., reimbursement, you need to bear the expenses upfront and file a reimbursement claim. This option allows you to seek treatment at your preferred hospital, which may not be in the insurer’s network. You must submit all the necessary documents while filing the claim. Insurers typically reimburse you within 21 days of filing your claim.

• Add-ons For Maximum Coverage 

Health insurance add-ons or riders are optional covers you can buy. Add-on riders help bolster your basic plan and provide comprehensive coverage. The add-on health insurance advantage includes the freedom to customise your plan to suit your medical needs. Insurers charge you an extra amount, beyond the base plan, for every additional rider you choose. You can select riders like room rent waiver, hospital cash, second opinion, sum insured reset (for family floater plans) and waiting period reduction for pre-existing diseases, to name a few. 

• Lifetime Renewability 

For the longest time, insurance providers either denied policies to senior citizens or charged a high premium. However, per a new mandate by the Insurance Regulatory Department and Authority of India (IRDAI), insurance companies are no longer permitted to not deny policy renewal on the grounds of an insured person’s age. Hence, lifelong renewability is an essential medical insurance benefit especially advantageous for seniors. 

Individuals over 60 years are typically retirees. As a retiree, you would either have to pay for medical expenses from your savings or buy a new health insurance plan altogether. Hence, it is advisable that you invest in health insurance in your 20s and 30s to enjoy the benefit of lifelong renewability.

• Covers Mental Health Conditions

Thanks to the Mental Healthcare Act of 2017 and the IRDAI’s intervention, health insurance providers are now mandated to frame their policies to include coverage for treating mental health conditions. This move by the IRDAI is a noteworthy medical insurance benefit that allows policyholders to seek treatment for mental health conditions like stress, anxiety, depression, etc. Also, the IRDAI has mandated insurance companies to include coverage for psychological disorders impacting the memory and cognitive abilities of policyholders in their health insurance offerings. 

Several insurance providers also offer coverage for outpatient treatments like counselling and rehabilitation. Acute depression, bipolar disorder, schizophrenia, dementia, hyperactivity disorder, etc., are a few mental disorders your health insurance policy may cover. The waiting period for mental health coverage is similar to pre-existing disease coverage, i.e., 48 months. Ensure you read the policy terms thoroughly to leverage this health insurance benefit.

• Cover For Maternity Expenses 

While bringing a new life into the world is a joyous occasion, it comes with various expenses. Pregnancy and childbirth can usually costs several thousands to a few lakhs. For caesarean or C-section deliveries, the prices are generally higher than normal delivery costs. However, the benefit of health insurance in India is that it can take care of most childbirth-related expenses. 

Depending on the insurance provider, the maternity cover can pay for hospitalisation expenses from labour to delivery and post-childbirth. It may also cover the treatment costs of childbirth-related complications, post-birth neonatal care, vaccinations in the first year, etc. The amount covered is usually a percentage of the policy’s sum insured. However, some companies offer a higher percentage if the new-born is a girl child. If medical emergencies call for the termination of the pregnancy, some policies may also cover those costs. Note that if your policy does not cover maternity expenses, you can always buy it as an add-on cover. 

• Treatment For Outpatient and Day-Care Procedures

Not all illnesses require hospitalisation. Outpatient department (OPD) treatments are for general disease prevention and vaccination. With health insurance, you may get coverage for OPD expenses like doctor’s fees, diagnoses, minor surgeries and dressing, dental care, etc. 

Another essential medical insurance benefit is coverage for day-care procedures, where you need hospitalisation for less than 24 hours. For instance, cataract surgery takes less than an hour, and patients can go home the same day. Other day-care procedures covered under insurance plans include eyelid incision, stapedectomy, middle ear reconstruction, glossectomy, lithotripsy, haemodialysis, radiotherapy, chemotherapy, etc. 

This cover is ideal for patients with recurring illnesses who require frequent visits to hospitals and clinics. Since these procedures are recurrent, their costs can add up over time. However, your health insurance policy covers such procedures, preventing you from dipping into your savings. 

• Alternative Treatment Cover

Some conditions are better treated with alternative treatments like Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy (AYUSH). Therefore, the IRDAI has urged insurance providers to offer AYUSH cover as part of health insurance plans for additional coverage. AYUSH treatment helps treat illnesses in tandem with allopathy. For instance, a herniated disc can be treated with surgery. However, proper diet and regular exercise is the most efficient and non-invasive way to treat the condition. You can enrol for a Yoga and Naturopathy course and utilise the AYUSH cover to manage the expenses. Breathing exercises and meditation have proven benefits in improving the oxygen supply to the brain, thus improving your health. 

• Family Plan Benefits

A prominent health insurance benefit is that you can extend coverage to your immediate family members. Also known as a family floater plan, this type of health insurance policy generally covers the policyholder, their spouse and children. Essentially, a single sum insured is shared between the insured members. This facility enables you to manage insurance coverage for all members under a single policy. The premium amount is lower than the total cost you would incur if you were to purchase individual policies. 

Any of the insured members can utilise the entire sum insured. You can also safeguard and reset the sum insured by purchasing the restoration or reset benefit add-on rider. Such a rider proves helpful when multiple members in a family need treatment within the same policy year and the sum insured is exhausted.

Why is a Health Plan better than Health Insurance?

Traditional Health Insurance generally covers Hospitalization expenses when admitted for over 24 hours. LivLong Health Plan on the contrary covers not just hospitalization expenses (powered by IRDAI approved Insurer) but also expenses around Doctor consultations, lab tests, pharmacy, and more, providing much higher value for money.

Final Note

With so many health insurance benefits, it seems unwise not to invest in health policies. Your insurance plan proves to be a godsend when you receive a sudden diagnosis of an illness that can cost lakhs of rupees. Moreover, benefits like cashless coverage and customisation with additional riders proves extra helpful in enabling you to seek comprehensive coverage. You can seek instant hospitalisation without worrying about breaking your deposits and investments to manage the treatment costs. With health insurance, you can safeguard your finances and seek the best treatment money can buy.