Insurance
•04 min read
Welcome to our brand-new series, A-Zs of Insurance. In this series, we will venture into the world of insurance to breakdown insurance jargon for you, so you’re empowered to make informed decisions about your financial security.
In today's world, healthcare costs can be a major source of stress and financial instability.
A significant portion of the country’s population is just one medical emergency away from their savings being wiped out. In fact, 7% Indians are pushed below the poverty line each year due to rising healthcare costs.
Imagine facing an unexpected illness or injury only to be hit with a mountain of medical bills. Especially when medical inflation in India is at an all-time high. It stands at an alarming 14%,almost twice the inflation in the retail sector. Did you know that the cost of hospitalisation has more than doubled over the last 5 years?
How do you deal with medical expenses then? How do you make sure you can foot the bill without compromising on the care you require?
Enter: Health Insurance. Your sturdy shield against any medical emergencies.
In this article, we'll delve into the fundamentals of health insurance and how it can help you secure your financial future.
Let’s begin.
Health insurance is a type of insurance that covers your medical expenses, like hospital stays, doctor visits, surgery, and more. It either reimburses you for these expenses or takes care of them directly.
Let’s understand this with an example.
Kunal, a 35-year-old man, buys a health insurance policy for himself. He opts for a cover amount of ₹20 lakhs, based on his medical history and the current cost of medical treatments and items.
6 months down the road, Kunal needs knee replacement surgery. He undergoes doctor visits, check-ups, diagnostic tests, a weeklong hospital stay, the actual surgical procedure, and post-hospitalisation care like x-rays, physiotherapy, and more. The entire cost of the surgery comes up to approximately ₹7 lakhs.
His health insurance policy covers all these costs as per its terms and takes care of the entire bill upfront. Kunal doesn’t need to pay anything from his own pocket.
Typically, a health insurance plan will cover various medical costs, like:
The expenses you incur when hospitalised for more than 24 hours, including nursing charges, room rent, ICU rent, medication, and more.
Costs you incur before and after you’re hospitalised, like doctor visits, diagnostic tests, physiotherapy, etc.
Items like gloves, masks, bandages, syringes, thermometres, gauze, cotton swabs, etc. Even though the cost of an individual piece might be quite low, these consumables are used multiple times during treatments, and can add up to a lot!
Treatments which can be carried out without overnight hospitalisation, like cataract surgery, dialysis, etc.
Healthcare is witnessing massive shifts in terms of technology and treatments. Modern procedures like oral chemotherapy, robotic surgeries, and more are now covered by health insurance.
These typically include pre- and post-natal care, delivery, the baby’s vaccinations, etc.
Medical care that doesn’t require hospitalisation, like general doctor consultations, follow-ups, and more.
Costs associated with organ donations are covered by health insurance, usually when the policyholder is the recipient.
Expenses incurred due to the usage of ambulances, air ambulances, etc., are covered by certain plans.
Consultations you seek from a doctor through telephonic means, video calls, etc.
Treatments administered at home due to the unavailability of hospital beds or because your condition is fragile.
Note: The coverage provided will depend on the policy that you select and may be different from the ones listed above. Please refer to your policy document for details.
Health insurance generally comes with three types of exclusions:
The health insurance plan you pick will not start covering every medical expense from day 1. Its coverage will unfurl gradually, as you fulfill the associated waiting periods.
Some examples of how waiting periods work is as follows:
a. Initial waiting period: This typically lasts 30 days. During this time, the health insurance generally does not cover any medical expenses, except for those related to accidents
b. Pre-existing disease waiting period: This can last up to 30 years and entails an illness that you’ve had or have been treated for within 3 years prior to buying health insurance. Such diseases will not be covered for a few years after you buy health insurance.
c. Specific disease waiting period: This can last anywhere between 2-4 years. This includes certain illnesses, as specified in your policy, that will not be covered for a few years.
These exclusions are laid down by the IRDAI (Insurance Regulatory and Development Authority of India) and are typically applicable to every health insurance plan available on the market. They include:
Expenses related to investigative, diagnostic, evaluation procedures.
Rest cure, rehabilitation, respite care.
Obesity or weight control procedures.
Any change of gender treatments.
Cosmetic or plastic surgery, unless necessitated by an accident, burn, cancer, etc.
Treatments for alcoholism, drug abuse, etc.
Treatments taken at establishments like nature cure clinics, spas, etc., for domestic reasons.
Dietary supplements purchased without a prescription.
Eyesight correction treatments for refractive errors less than 7.5 dioptres.
Any unproven treatments, items, services, etc.
Sterility and infertility procedures like contraception, assisted reproductive services (IVF, artificial insemination, etc.), gestational surrogacy, and more.
Maternity and childbirth-related expenses.
Participation in risky activities like river rafting, skydiving, paragliding, etc.
Any breach or attempted breach of law.
Treatment taken at a medical facility excluded by the insurer.
The insurer may also levy additional exclusions on your health insurance policy, based on their own volition or your medical history. However, please note that the insurer can exclude only a specific set of illnesses, as laid down by IRDAI rules. Some common examples include pancreatic diseases, liver diseases, etc.
The policy you choose may also come with specific exceptions, as decided by the insurer. These go beyond the exclusions we’ve discussed above and usually include situations like sleep apnea, preventive care, congenital anomalies, etc.
Note: This list is not exhaustive. The exact exclusions will depend on the plan you choose.
Riders are add-on covers that widen your base coverage at a certain extra cost.
Health insurance plans come with various types of riders, like personal accident cover, room rent modification, hospital cash rider, surgical care rider, etc. Each rider serves a different purpose, but ultimately helps you ensure more financial stability in the face of medical bills.
Make sure you go through the available riders thoroughly when you get health insurance, so your plan is perfectly tailored to your needs.
Please read the terms and conditions of your policy carefully to understand how the features and limitations apply to you.
