We do not plan to fall sick or get hurt. Yet most of us at some point in our lives do fall sick or get hurt, and require hospitalisation. With healthcare costs rising exponentially, it is imperative we have adequate coverage to protect our wealth. Whether we have government or employer support, a personal health insurance cover ensures we remain adequately protected for life and have more options if hospitalisation is required.
Health Insurance policies in India are either Indemnity Plans or the Defined Benefit plans. The Indemnity Plans include most of the “Mediclaim” policies bought and aim to reimburse the healthcare costs incurred. They could be bought individually or as a family floater where the coverage amount is shared by the entire family. Group Mediclaim policies are offered by employers or institutions like banks. The Defined Benefit plans offer the entire coverage amount and do not enquire on the actual expenses incurred. They include Critical Illness policies, Hospital Cash, Cancer cover and complement the “Mediclaim” policies.
Commonly referred Terms:
Sum Assured: Basic coverage amount.
Cumulative Bonus: Extra cover offered for every claim free year. Some insurers offer premium discount instead of CB.
Restore Benefit: Cover is reinstated if completely exhausted before next renewal.
Co-payment: Where the expenses are partly borne by insured along with insurer.
Exclusions: Conditions or circumstances where insured will not get benefit.
Network Hospital: Hospitals associated with insurer where bills are directly settled by insurer.
Deductible: Deductible is the amount that a policy holder has to pay before the insurer starts paying up.
Incurred Claims Ratio: ICR is the ratio of claims paid by an insurer to the total premium collected.
Claim Settlement Ratio: This is the ratio of actual claims paid by an insurer to the total claims lodged.