Did You Know About These 8 Types Of Health Insurance Policies?

• Introduction
• Different Types Of Health Insurance Policies In India
  • 1️⃣ Individual Health Insurance
  • 2️⃣ Family Floater Plans
  • 3️⃣ Multi-Individual Health Insurance 
  • 4️⃣ Senior Citizen Health Insurance
  • 5️⃣ Maternity Health Insurance
  • 6️⃣ Critical Illness Insurance
  • 7️⃣ Group Health Insurance
  • 8️⃣ Topup & Super Topup Plans

You buy health insurance thinking it will financially cover you in the event of a medical emergency. But, as important as it is to have a health insurance policy, it is equally important to have the right type of policy. Not buying the right type of health insurance could leave both you and your family in a financially distressed situation. Because there might be huge out-of-pocket expenses that could exhaust all your savings. In order to avoid this, it is essential to buy the appropriate health insurance cover.

In this article, we take a look at some important types of health insurance in India so that you can make an informed decision. 

Let’s dive right in!

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Individual health insurance, as the name suggests, is one of the most common types of health insurance in India. It covers a single individual under a single policy. You can buy separate individual health covers for every member of your family. 

One of the biggest advantages of individual health insurance is it insulates one family member's cover from another. This helps in ensuring that a claim by one member of the family will not impact the coverage of other family members.  

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A family floater is a type of health insurance plan where you can cover your entire family under a single policy. The cover amount essentially 'floats' among all members covered under the floater plan, and is available to any and all of them!

For a variety of reasons, family floaters are a wonderful alternative to individual health insurance policies. They are less complicated. The entire family is covered under one policy. You don’t have to manage multiple policies - this makes them incredibly easy to handle and keep track of. 

So, instead of purchasing separate health insurance for each family member, you can buy a single floater plan that would cover the hospitalisation costs of all members.

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A multi individual policy offers you the best of both - a family floater and an individual health cover. It gives you the option of insuring multiple family members in a single policy while retaining individual coverages for all of them. This could be a good option for large/joint family units who want to insure all relationships in a single policy but may not have that flexibility in a family floater plan. 

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These are plans specifically designed for individuals above the age of 60 years. If you’re finding it difficult to cover one or both of your parents under a regular health insurance plan, you can consider buying this plan for them. 

Senior citizen health insurance policies may not require any medical tests. They, however, usually come with a lot of restrictions and limitations, like - 

• Waiting Period For Pre-existing Diseases: The policy will not offer coverage for pre-existing diseases immediately after it is issued. The insurer may apply a waiting period of 2 to 4 years on pre-existing illnesses. You’ll be able to claim for pre-existing diseases only after the completion of the waiting period. 
• Copay: Copay is a specific percentage of the claim you’ll have to pay out of your pocket before the insurer starts to pay. 
• Room Rent Limits: The insurer may restrict the room rent per day that’s payable by the insurance policy in case of hospitalisation. If you stay in a room that’s more expensive than your eligible limits, you’ll have to pay the differential from your own pocket. There are also other deductions at the time of claim settlement for associated expenses during the hospital stay viz doctor’s fees, surgery expenses, etc (in case you exceed the room rent limit).
• Sub-limits On Specific Treatments/ Diseases: There may also be limits applied on specific diseases and treatments/ procedures. Any expenses incurred beyond the limit specified by the insurer will have to be borne by you.

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Parenthood brings a lot of joy and excitement to our lives, no doubt! But it also brings along a lot of added expenses. And, these expenses may not be covered under a regular health insurance policy. This is why it becomes crucial to invest in a maternity cover. 

Some health plans come with an in-built maternity cover, whereas in others, the maternity cover is available as a separate rider or an add-on benefit. So, you’ll have to voluntarily opt for the maternity benefit by paying an additional premium. 

The maternity benefit in health insurance covers the cost of both normal and caesarean delivery. And some insurers also cover prenatal, and post-natal costs, the cost of medicines, ultrasound, medical checkups, etc. And, the coverage is not just limited to the delivery of the baby. Some insurers may also cover the newborn baby for a set period of time.

One important thing you must note about the maternity benefit is you won’t be able to make a claim immediately on buying the policy. There will be a specific waiting period that may range from 9 months to 4 years. You won’t be able to claim for any maternity-related expenses during this period.

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A critical illness can happen to anyone at any stage of life. Serious illnesses like cancer, kidney failure, heart attack, etc. are commonplace now. And, these illnesses demand immediate medical attention. While on one side, they cause immense emotional trauma to the family, on the other - there is a certain financial impact due to expensive medical care.

There is also a chance of you experiencing a sudden loss of income - you might either have to quit your current job or shift to a lower-paying job so you can prioritise your health. You will also start seeing a sudden increase in your healthcare expenses - medications, nursing and medical support, and other lifestyle alterations like installing a ramp for your wheelchair, and so on. Such expenses are not covered under a regular health insurance plan. 

These costs will need to be borne by yourself - unless you have a critical illness insurance plan. Critical illness insurance can help you and your family deal with the financial impact of a serious disease. It pays a fixed sum of money if you're diagnosed with an illness that is covered in the policy. You and your family can use this money to deal with all the additional expenses that will have to be incurred because of the disease.

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Group health insurance, as the name implies, is an insurance plan that covers a group of people. Generally, insurance companies offer group insurance coverages to a group with a common purpose. For instance, members of a club, employees of a company, account holders of a bank, registered users of a mobile app, and so on. 

Group health covers require very less documentation, and are usually issued without any medical tests. So, these policies are relatively hassle-free to buy in comparison to retail, individual policies. 

These plans, however, come with a lot of restrictions and are available only as long as you remain the member of the group (employer, club, bank, etc) Hence, in our opinion, you should consider buying a group health plan as a last resort - if you’re not getting an individual policy due to age or health-related issues. 

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Topup and Super Topup plans are like extensions to your base health insurance policy. Both these plans come with a ‘deductible’ - an amount after which the topup or the super topup will start to pay.

A Topup plan’s deductible is calculated based on every single hospitalisation. So, it becomes active and starts paying only if the expenditure on one hospitalisation crosses the deductible limit. A Super Topup’s deductible, on the other hand, is calculated based on the sum total of all hospitalisation expenses incurred during the year. 

Let’s try to understand how both Topups and Super Topups work with the help of Raj’s example.

Two friends, Raj and Simran, are covered under health insurance policies of INR 10 Lakhs each. They both get diagnosed with cancer a few months after buying the policy. Raj buys a Topup of INR 20 Lakhs with a deductible limit of INR 10 Lakhs. And, Simran buys a Super Topup of INR 20 Lakhs with a deductible limit of INR 10 Lakhs.

Now, let’s assume they both undergo hospitalisation at the same time and they incur similar hospitalisation expenses. Let’s understand how a Topup will pay in Raj’s case and how a Super Topup will pay in Simran’s case.

So, that is all from our side today. We hope this article helped you gain enough clarity on the different types of health insurance in India available in our country. If you have a question related to the different types of medical insurance plans in India, you can post it on the Beshak Insurance Forum, and get answers from vetted experts, for free!