A HealthInsurance is nothing, but protection offered to a person to get one’s expenses reimbursed or directly paid by the Health Insurance company. It is a contract offered to the individual based on age and pre-existing conditions against the promise that the expenses will either be reimbursed/directly paid to the hospital, in cases like surgery or hospitalization, also known as a cashless form of payment.
How does the cashless form of payment work in cases of Health Insurance?
If a hospital is covered under the network mentioned in the Health Insurance policy, it has an MOU (Memorandum of Understanding) with the Insurance policy, which essentially states that no amount will be charged to the individual/family that is insured.
Does an Insurance policy cover a specific disease fully?
No Health Insurance policy covers 100% of diseases. The Insurance Regulatory and Development Authority of India (IRDAI) has defined specific grades for each disease, which specifies these percentages and the constituents that are covered under such cases.
Claim Settlement Ratio in Health Insurance
The Claim settlement ratio is determined by dividing the number of insurance claims settled by the health insurance company, by the total number of Claims. Generally higher the Claim Ratio, the better it tends to be for the insured, with certain exceptions.
A high claim settlement ratio is important. However, the claim settlement ratio that is mentioned, needs verification, so the data source must be verified.
- Whether the claim settlement ratio data is current, as in when the data was last updated, generally these have an asterisk next to it, and the year is mentioned as a footnote, the data should be of the current year.
- The correct facts may not be available, at times, the claim settlements which happen in a delay time window are not reported, so the focus ideally should be on the coverage of the policy and not necessarily on the Claim Settlement ratio only.
Things to know before going for a Health Insurance plan
● Cashless settlement: This would mean that the network of hospitals covered under the Insurance policy directly liaises with the insurance company, helpful for people who do not have surplus cash available.
● Voluntary deductible – This is the amount that has to be borne by the Insured when an Insurance claim is filed. It is better to go for a zero-deductible policy, for this reason, even though they are slightly more expensive, they can help save money in the long run and help avoid the extra hassle.
● No Claim bonus – This means if in a year if the Sum Insured amount is not claimed in a specific year, the amount is increased by the Insurance company without an increase in premium(the percentages would be specified in the policy)
● Co-payment clause – If the co-payment clause states 80% payment, that means 20% of the amount has to be borne by the insured.
● Waiting period – Certain diseases have a waiting period before they are covered by the Insurance company. It is always better to check this before buying the Health Insurance policy.
What are the types of Health Insurance plans?
● Individual Health Insurance plan: It is a health insurance coverage only for the individual and covers hospitalization and medical bills. The premium depends on the age of the individual. The premium tends to be generally low given the Insurance plan is for 1 person.
● Family Floater Health Insurance plan: It covers all the family members. For instance, one’s spouse and children, and even parents may be covered in this plan. The premium is based on the age of the eldest covered member in the family. For this reason, family members above the age of 45 should not be included in the coverage of the Family plan here. It is better to opt for a Senior citizen Health Insurance plan in such cases.
● Senior citizen Health Insurance plan: It is specially designed for older people, the expenses are capped while covering all the risks, usually having a co-pay clause, wherein some amount must be borne by the insured.
● Disease-specific Health Insurance plan – Coverage specific to a specific disease. For instance: Insurance plans for Dengue, Malaria, etc.
● Critical Illness Health Insurance plan – Cases like stroke, paralysis, which are normally excluded from Health Insurance plan, can be availed by paying for this Insurance plan.
● Group Insurance plan: Every organization/company takes a group insurance plan against its employees, with the premium being low, even though the coverage is at a higher amount.