Health Insurance Plan: A Complete Analysis

Health Insurance Plan: A Complete Analysis

Health insurance is popularly known as Medical Insurance or Mediclaim. It is a kind of agreement made between a person and an insurance company. It protects you and your dependents against any financial constraints arising on account of a medical emergency. It sometimes includes disability and long term medical needs. In Mediclaim you pay a premium and in return the insurer commits to pay a prearranged sum of money to meet the claims. Health insurance is new in Indian context and is slowly catching up with the consumers. Consumers recognize the objective of health insurance and it’s offering to cover the ever-rising medical expenses. Health insurance is sometimes used more generally to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a government-sponsored social insurance program or from private insurance companies.

Health insurance is obtainable to both individual and groups (e.g. by a firm to cover its employees). In each case, the covered groups or individuals pay premiums or taxes to protect themselves from high or unexpected healthcare expenses. However premium for an individual policy is costlier than that of the group policy. An individual is the owner of his personal policy. Whereas in group plans the sponsor is the owner of the policy and the registered members are enclosed by the policy. You can take benefit of group health insurance to overcome the shortage of individual insurance. People with no policy or are uninsurable due to one or the other reason can take good advantage of the group plans and be covered

By estimating the overall risk of healthcare expenses a routine finance structure such as a monthly premium or annual tax can be developed, ensuring that money is available to pay for the healthcare benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business or not-for-profit entity. The person or the insured should pay a regular fee called a premium to the insurance company. In return the insurance company will pay all or some medical expenses wanted when the insured becomes injured, ill, or otherwise hospitalized.

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Know about other Insurance Plans

Insurance can be defined as a risk-transfer mechanism that ensures full or partial financial compensation for the loss or damage caused by event(s) beyond the control of the insured party. Under an insurance contract, a party (the insurer) indemnifies the other party (the insured) against a specified amount of loss, occurring from specified eventualities within a specified period, provided a fee called premium is paid. Some of the basic types of insurance plans which give you tax benefit have been described below.

• ULIPs Insurance plan
• Child Plan
• Pension Plans
• Term-Life policies
• Pure Endowment Plans
• Endowment Assurance Plans
• Money-Back Plans
• Health (Med-Claim) Plans

ULIPs Insurance Plan

ULIPs stand for Unit linked Insurance Plans. These are a type of investments which have the characteristics of both insurance and mutual fund. A part of the invested amount goes into insurance cover and remaining into an asset class. ULIPs usually have higher entry costs, brokerage and commission. The price of insurance cover is higher in a ULIP plan compared to a plain insurance policy.

Child Plan

These are the plans that provide cover to the life of the child’s parents/guardian/grandparents. These are term plans. These plans basically ensure that the child’s future is not put in jeopardy in case of death of the parent/guardian/grandparents of the child. Usually child plans are calculated to mature at important events in child’s life, like pursuing higher education or marriage. The sum is receivable irrespective of the survival/death of the insured.

Pension Plans

It is a plan that assures, one will continue to earn income and enjoy a comfortable life even after retirement. It has gained importance off late because of job insecurity, mid-career shifts. Mostly insurers provide two types of pension plans, endowment and unit-linked plans.

Term-Life policies

These are the kind of insurance contracts which cover the life of an individual over a period of time. The benefits will be paid if and only if the risk happens during the term of the policy.

Pure Endowment Plans

These are similar to term life plans. The basic difference is that the benefit will be paid if and only if the insured survives the term.

Endowment Assurance Plans

The best form of explaining this kind of a policy is that it is a combination of term life policy and pure endowment plan. This is a form of life insurance that assures one about the payment of a specified amount on a specific date or to the beneficiary upon the death of the insured before that date.

Money-Back Plans

These are ideal investment options for those who look for both insurance and savings. In these kinds of policies a certain percentage of the sum assured is remitted to the insured throughout the term of the policy. These remittances are tax-free. In case the insured survives the term, he receives the corpus with accrued options like bonus. In case of death of the insured before the expiry of the term, the nominee or legal heirs get the sum assured irrespective of the installments received, with accrued benefits.

Health (Med-Claim) Plans

This plan falls into the general insurance category. This basically covers medical expenses one may incur on account of illness and subsequent hospitalization. However, life insurance companies have started coming up with health plans.

We often buy insurance policies without analyzing the benefits. For instance insurance policies like endowment, money back don’t make good investment options because of;

•    Longer lock-in periods
•    Larger initial outlay
•    Lesser relative returns
•    Poor surrender value

Consider the Total Cost of Your Policy:

Some policies appear to cost more, but may, in fact, be cheaper when you look at the overall cost of the policy. For instance, annual renewable policies increase your premiums every year and thus may appear to be more expensive than level term policies where the premiums never increase (even though the initial premiums for a level term policy will be higher). But, in fact, level premium policies might involve higher costs over the policy's full term, and become particularly costly when you try to renew your policy at the end of the term.

See Also: How to lower Health Insurance Premiums?

Quit Smoking :

The facts prove it: Tobacco users are twice as expected to die as non-tobacco users while they are insured. Insurance companies take this into account when they set their premium and cash benefits levels from the customers. You can save from 20% to 30% on premiums by stopping smoking.

Standard Vs. Preferred Risk :

Many insurance companies offer lower, preferred rates to people who appear to be in good health and live a lifestyle that promotes a healthy, accident-free life. If one is in this category, he/she may be able to get a much better deal on his/her life insurance.

See Also: Policy Details and Cost of Life Insurance

First-To-Die Policies :

First-to-die permanent life insurance policies pay cash benefits despite of which spouse dies first. Covering both spouses with one policy will be cheaper than buying two policies.

Consolidating Policies :

If one has a number of small life insurance policies, he/she can save money by consolidating their policies into one larger policy that offers the same coverage.

Shop for A Better Deal :

The best way to be sure that am I getting the best deal on my life insurance is to shop around. But it is important that you should do your shopping now while you are in good health, insurable and can meet the criteria for a good rate. Remember, the longer you wait, the older you will be and the higher your rates will be.

See Also: Different Types of Life Insurance Policies in India

Categories of medical insurance

Medical expenses has raised manifold in last few years. So it is very important to take a and the services provided are simulation of one another thus making choice difficult. There are some kinds of health insurance and they are follows :

• Individual Medical Insurance
• Group Medical Insurance
• Special Plans

Individual Medical Insurance

These types of medical insurance plans offer protection and indemnity on an individual basis. Insurance premium for individual plans are advanced than that for a group policy.

Group Medical Insurance

These medical insurance plans generally available through an employer or society or union are written on a number of people under a single master policy.

Special Plans

These plans are specially structured to suit the needs of elderly persons, veterans of military service, etc.

Types of Health Insurance

Health care expenses have seen a phenomenal rise in the recent times. This has led the customers to insure not only themselves but their family members also. It will cover future medical expenses and other connected requirements if it ever arises. The need to insure has gained more importance amongst older generation who is either retired or will retire in the near future. Let us discuss the types of medical insurances available in the market.

• Medical Insurance
• Critical Illness Insurance

Medical Insurance

This is typically a hospitalization cover and reimbursement of the medical expenses incurred in respect of enclosed disease or surgery while the insured was admitted in the hospital as a patient. Different types of medical insurances are available in the market like individual medical insurance group medical insurance and overseas medical insurance. There are health policies that reimburse you the actual hospitalization cost for treatment of any disease and are obtainable by the non-life insurers only. These policies are popularly called Mediclaim policies. Other types of health insurances are provided by both the life and non-life insurers.

See Also: Advantages Of Buying A Health Insurance Plan

Critical Illness Insurance

Critical Illness plan insures you against the risk of serious illnesses in return of a premium you are necessary to pay. This gives you the same safety of knowing that a certain cash sum will be paid if the unexpected happens and you are diagnosed with any one of the critical illness. Sometimes a critical illness can change your lifestyle in adding to help within the home or the family. In this type of health insurance plan the insured receive a lump sum amount within a few days of diagnosing critical illness. Once this lump sum is paid the plan ceases to remain in force. Normally a critical illness plan would supply cover for the illnesses mentioned below;

• Aorta graft surgery
• Cancer
• Coronary artery bypass surgery
• First heart attack
• Kidney failure
• Major organ transplant
• Multiple sclerosis
• Paralysis
• Primary pulmonary arterial hypertension
• Stroke

Need of Health Insurance

Medical expenses are in sky high these days. A meeting with a doctor might churn out big bucks. The complicated medical treatment expenses could eat into your savings meant for the future. Health insurance policy kicks in to guarantee that you get the necessary treatment and your pocket is still under control. Having health insurance is significant because the coverage helps people get timely medical care and improve lives and health. It covers the risk of monetary difficulties in the event of long illness. The awareness has been enormous in the last couple of years. This must have been in response to the series of uncertainties people have observed in recent times like the terror attacks.

Benefits of Health Insurance

Benefit depends on the policy you choose and the coverage it provides. Here is a list of basic coverage provided by most of the health policies.

• It helps securing a better future by paying a fraction as an expenditure today called the premium.
• It reduces saving huge amount of financial losses, risk of financial breakdown in case of expensive medical and post-illness care.
• It certainly induces a sense of security to the insured.
• It provides financial security to the family members.
• It covers your hospitalization and medical bills.
• It also covers disability and custodial bills.
• You can avail tax benefits on the premium paid under section 80D of the Income Tax Act.
• The best factor, you can also opt for health insurance policies even after the age of 60.

Tips To Select The Right Health Insurance Plan

Following are the tips to note while taking a right health insurance policy

• Compare prices and features before buying. One policy can cost over 3 times the other.
• If you have a family, go for a Family floater policy. It is more economical and gives higher coverage for each member of the family. In addition it provides the flexibility that any member can use any proportion of the floater. This is helpful since in most cases one individual gets seriously ill, rather than the entire family.
• Compare the terms of the policy so you do not get a shock later. A broker will be able to give the best advice since he is largely independent.
• Do not always adopt a policy with a cashless tie up with a hospital nearby. All good hospitals can be empanelled by insurance companies. Rather look for a policy that fulfils your necessities adequately.
• Find out all the hospitals that your insurance company has empanelled with and understand what their specialization is, so if you are in need you can use the appropriate hospital, rather than just one all the time.
• Always it is advisable to buy from a broker, ask for their license number and make sure if the details provided are correct from the IRDA website. These brokers are independent and are paid for every policy they sell, so they are not inclined to push one over the other. An agent on the other hand sells for one company only and hence will usually push that company and its benefits.
• Be truthful and accurate in your declarations on the proposal form. That will only ensure payment when you have a genuine claim.
• Exercise frequently and follow healthy eating habits. Avoid smoking or drinking in excess. Over time all your efforts will definitely reduce your premium while covering the risk.
• If you already suffer from a disease take the necessary precautions. Always act as if you are uninsured yet though you may be insured. This will always control your habits and will advantage you in the long run.

Save on Health Insurance Premiums

No one likes pay more than its worth. Getting the most appropriate and reasonable Health insurance is dependent on a few aspects like your choices, capability to choose and of courses the health conditions of the policy buyer. But by following a few steps you can save a good lot on your health insurance premium.

• Smoker’s health is always at risk so people with smoking habits will end up paying more premium than a non smoker. So in order to decrease the premium, one has to quit smoking.
• High blood pressure is not a good sign and is sensible to keep it under control. Keeping control on high blood pressure can help you decrease the premium cost.
• If you are in good health then automatically your premium cost will be lower than the people whose have health problems.
• Avail your no claim benefits. Discounts on claim free years will also help reducing the premium at the time of renewal.
• Comparing the quotes from a variety of insurers is an important feature to save on health insurance premium. Though you need to shop for a while to have an idea. Make sure you get some affordable online health insurance quotes.
• Compare the profit of various health insurance plans. Perform deep research to find out what discounts you can avail for in various appropriate policies.
• Make your choices for cover very carefully; take only the coverage you require. Your random selection might end you up paying out more than actually required. So a right decision making is important.

Comparison of health Insurance Plan

Below given table will help you to compare some of the good Health Insurance Products in the Market.

Company Name	ICICI Lombard Insurance	HDFC ERGO General Insurance	Royal Sundaram General Insurance	Bajaj Allianz Life
Product Name	ICICI Lombard Health Advantage Plus Plan	HDFC ERGO New Health Wise Plan	Royal Sundaram Health Shield Plan	Bajaj Allianz Life Health Care Plan
Medical Expenses (30 days prior and 60 days post hospitalization)	Available	Available	Available	Information not available
Inpatient expenses*	Available	Available	Available	Available
Day Care expenses for advanced technological surgeries and procedures *	Available	Available	Available	Available
Outpatient Treatment Expenses*	Available	Available	Available	Available
Pre-existing diseases	It is covered after 24 Months of Continuous Coverage	Information not available	It is Covered after 4 Years of consecutive insurance	Information not available
Sum Insured	Information not available	Rs. 5,00,000	Information not available	Rs. 10,000
Policy Duration	1 Year	3 Years	Information not available	Information not available
Eligibility	Age at entry 5 Years to 65 Years	Upto the age of 55 Years	Upto the age of 45 Years	Age at entry 18 years to 57 year

*Day Care expenses for advanced technological surgeries and procedures : Dialysis, Radiotherapy, and Chemotherapy, requiring less than 24 hours of hospitalization.

*Outpatient Treatment Expenses : Expenses related to Dental Treatment, Surgery, Anaesthesia, Operation Theatre Charges, Cost of Pacemaker, Cost of Artificial Limbs External Medical Aids, Dental treatment charges, Ambulance charges, etc.

*Inpatient expenses : Room charges, Doctors / surgeons fee, Medicines, diagnostic tests, etc.

Procedure to file a health Insurance claim

Taking health insurance and paying premium is one story and filing for claim is another. Claiming benefits can be quiet tricky at times so you have to be smart and careful while filing for the claim. To file a Health Insurance claim with your Insurance Company you have to keep the following things ready.

• Claim form duly filled and signed by the claimant.
• Discharge Certificate from the hospital
• All documents pertaining to the illness starting from the date it was first detected i.e. Doctor's consultation reports/history
• Bills, Receipts, Cash Memos from hospital supported by proper prescription.
• Receipt and diagnostic test report supported by a note from the attending medical practitioner/surgeon justifying such diagnostics.

Health Insurance Tax Benefit

From the time taxes have come into existence there has been a constant struggle between the tax collectors and tax payers. The collectors want to collect more taxes so that the government will have more money to invest in the developmental works, and hence improve the economy on the other hand it is us or the tax payers who want to reduce the tax liability. The government gives deductions and tax exemptions for some of the investment done by the assessee to encourage him to invest in some of the businesses. Earlier on the Tax laws were stringent and the provisions were not lucrative enough to drive people to invest keeping tax planning in mind.

With the amendment of Income Tax Act and the passage of time, there seems to be a dramatic improvement in the investment options available to save tax. Insurance has always been viewed as an investment and a tax saving tool. One major mistake we all do is to plan for tax saving only towards the last quarter of the financial year, and thus, we end up taking many investment decisions in haste.

Therefore assessing each option carefully and then choosing the right investment plan has become pivotal in making tax saving a profitable exercise. Insurance is one such tool. If any person knows the benefits under the Income Tax Act, Tax Planning will be much simpler activity.

Tax Saving Provisions through Insurance

Section 80C

Any tax payer can invest upto Rs. 150000/- in EPF, PPF, life insurance premium, NSC, infrastructure bonds, pension plan premium, tax saving mutual funds, home loan repayment without any sub limits. Earlier on tax laws did not provide for exemption on premiums paid towards pension plans. However, the current provisions cover that also, hence, retirement planning has also become an interesting investment option.

Section 80D

Amount paid towards the premium of med claim insurance policy by an assessee can be claimed for deductions under this section.

The deductions available under this section are;

• Rs.25000 or premium paid whichever is less in case of medi-claim premium paid for self and non senior citizen dependants and an additional deduction of Rs.50000 or premium paid whichever less in case of medi-claim premium is paid for dependant senior citizens.

Section 80DD

In case of premium paid for medical treatment of disabled dependent, an exemption of Rs.75000/- is available and an exemption of Rs. 1,25,000/- in case of severe disability.

Section 10(10D)

Any sum received as profits from the policy are exempt and the sum assured one receives is also exempt. Any amount an individual receives is exempt from tax as benefit from the insurance policy

Insurance Tax Benefits

Section	Benefit up to
Section 80C	Rs.150000/- includes premium paid on life insurance and pension plans
Section 80D	Rs.25000/- towards payment of premium on medical insurance plans on self and non senior citizen dependents. An additional deduction of Rs.50000/- towards payment of premium on medical insurance plans of senior citizen.
Section 80(DD)	Upto Rs.75000/- on premium paid for covering the medical insurance of disabled dependent and Rs.125000/- in case of severe disability
Section 10(10D)	Any profit or sum assured received is exempt

Some tax planning tips to sum up the article would be:-

• Utilize the Provision of Section 80C
• Learn to think beyond Section 80C, Avail benefits under section 80D and 80DD
• Restructure your Salary

Many investors feel tax planning is little more than a compulsory business activity to save tax. Tax planning is a lot more than blindly applying to insurance policies. Tax planning has to be an activity that contributes to personal financial goals as well as reducing the tax liability. Tax planning has to be taken up as a continuous activity rather than a onetime affair.

Why Health Insurance is necessary to buy?

Human body is prone to diseases. Nobody can say “yes i cannot get sick”. Even Baba Ramdev can get sick. A common man works hard all his life for what?? He earns for his livelihood, for his families dreams, for his child’s dreams, for a better standard of life. BUT what if after working hard for whole of one’s life one has to spend all that money for his medical treatment, all give it to hospitals just for the sake of breathing. All happiness vanishes once for all. The whole lifetime fortune just goes like that for medical treatments. BUT, why not spend little now to get spared from making huge payments at the time needed and let the dreams come true. This brings in the concept of HEATH INSURANCE SECTOR. The question arises WHY IS NOT HEALTH INSURANCE COMPULSARY AND MAKE MEDICINES FREE IN INDIA. It is there in western part of the globe, and that is the reason people there have no fear on their faces in old age too. Why not get insured and enjoy the facility of standard quality medical treatment in our country instead free substandard treatment in municipal hospital.

Health insurance is a risk covering document to provide financial aid against the risk of unforeseen health expenditure. It’s simple health insurance is an insurance policy on which one has to pay a reasonable amount of premium any in any event of sickness, this health insurance provides financial aid for the treatment.

Need for health insurance

Over the large 50 years India has developed much awareness and has been successful in improving the health status. The death rate, infant mortality rate etc have certainly been reduced and during the course of time the life expectancy has increased from about 35 to 65 years. Still there are many challenges which include high incidences of the communicable as well as non communicable diseases, neglect of women’s health, variation in regions and of the environmental threat. A recent survey result shows that 60% people use private health providers for outpatient treatment while another 40% rely on government providers only. The average expenses incurred in private sector is 2-5 times more than in public sector.

See Also: Health Insurance Benefits

On considering the GDP of our country private health care expenses is 4.25% out of 6%, the total expenditure on health. But still the insurance is considered to be negligible. Public funding is mainly on preventive, and primary care programmes but private sector concentrates mainly on curative care. There has been a considerable increase in number of private doctors and private clinical facilities, in addition to these there are many hurdles arising in Indian health financing which are :

• Increase in health care costs
• High financial hardship on poor as compared to minimum income.
• Increase in burden of new diseases and health risks.
• Avoidance of preventive and primary care and public health functions by the government health care.

Thus having a view of the above data it is very difficult for health financing options. Health insurance, hence, is considered to be as one of the financing mechanism to overcome the problem and stay health.

See Also: Best Health Insurance Plans in India

How Health Insurance works?

There are many health insurance companies in India. Every company offers various products. Some are for specific illness, some are only for hospitalization and on top of that most of them are having hidden terms and conditions. Here INDIANMONEY.COM plays a predominant role in helping you in selecting the best health insurance policy among the various available in the market. Indianmoney.com is a free financial advice provider which can help you in selecting the best health insurance policy as per your individual requirements.

Health insurance may be available at cheap rates if you are healthy but make sure that you purchase a policy which meets your needs. Look out for the deductibles, co payments and sublimits in your health insurance policy.

Make use of health insurance portability if you are not satisfied with your health insurance policy.

India suffers a serious mental health crisis, with more than 5 Crore people suffering from depression. Nearly 4 Crore people suffer from anxiety disorders. Mental illness can lead to depression and suicides, costing India crores of rupees. Sadly, not much attention is paid to mental health which is costing productivity and employee well being.

Why is mental illness ignored in India? It’s commonly believed that speaking to a mentally ill person affects your mental health. IndianMoney reviews say people keep mental illness secret, fearing job loss. They are reluctant to discuss mental health and seek a cure.

What is mental illness? It’s a wide range of mental health conditions and mental disorders, which affect mood, thinking and behavior. Mental illness includes depression, anxiety disorders, schizophrenia, eating disorders and addictive behaviors. Mental illness makes a person miserable, affects work life and relationships and causes problems in daily life.

Mental Illness: Causes of mental illness:

• If a blood relative has mental illness, you are likely to get it. Some genes increase the chances of mental illness, and stressful life situations trigger it.
• Exposure to toxins, alcohol or drugs while in the womb, can lead to mental illness.
• Hormonal imbalances affect mental health.
• Financial problems, death of loved ones and divorce leads to stress and mental health problems.
• Brain damage caused by violent blow to the head.
• Traumatic experiences like an assault.
• Use of narcotics.
• Being abused as a child.
• A history of mental illness.
• Poor relationships and few friends.

Warning signs and symptoms:

• Sad and a feeling of being let down.
• Confused thinking and difficulties in concentration.
• Mood swings
• Extreme fear and guilt
• Tiredness and low energy
• Cannot cope with stress
• Withdrawal from friends, family and social functions
• Excessive consumption of alcohol, cigarettes and drugs
• Eating disorders
• Suicidal tendencies
• Being angry, aggressive and violent.

Types of mental illness:

Depression: Depression can occur at any age, to any gender and practically anyone. It leads to loss of interest in activities and pleasure, affecting work life and productivity. Symptoms could be fatigue, weight loss, eating disorders and low energy levels. Guilt, difficulty in concentration and wrong decision making, follow. Suicidal tendencies and feeling of worthlessness must be looked into, on priority.

Anxiety: Anxiety could be palpitation, restlessness, apprehension, nausea, trembling and breathlessness as reactions to stressful events. Anxiety induces an increased use of sleeping pills, drugs and alcohol. Difficulty in concentration, loss of control, fatigue and sleeping disorders affect productivity.

Schizophrenia: Hallucination, disorganized thinking and delusions are the symptoms of Schizophrenia. A delusion is a false belief which persists in spite of contrary evidence. There’s a feeling that people are constantly plotting and you are the target.

What are the treatments for mental disorder?

The Parliament passed the mental Health Care Bill 2016, with provisions for state health care facilities and rules which uphold the rights of mentally ill people in India.

1. Access to affordable healthcare for mentally ill

A person with mental illness in India has the right to good quality and affordable healthcare. No discrimination can be made on the basis of gender, religion, caste, socio-economic status or political beliefs.

2. Power for consent and decision making

People with mental illness can make decisions regarding health and treatment, if they understand treatment and consequences. They cannot be forcefully admitted to hospitals, if they understand what’s happening to them.

3. Right to live in a community

People with mental illnesses enjoy the right to live in a community and cannot be segregated from society. The Government will provide legal assistance and support to help mentally ill people live a normal life.

4. The right to confidentiality

A person with mental illness doesn’t have to disclose illness or treatment to anyone. The media cannot publish information without individual’s consent.

5. Rules on prohibitive practices

Electroconvulsive therapy or shock treatment cannot be performed without muscle relaxants and anesthesia. Patients cannot be sterilized, chained or abused in any manner. Patients have the right to wholesome food, privacy and facilities of leisure.

6. Decriminalization of suicide

Suicide is not a criminal offence. Survivors of attempted suicide would be considered to be under severe.