Insurance may be described as a social device to reduce or eliminate risk of life and property.
Under the plan of insurance, a large number of people associate themselves by
sharing risk, attached to individual insurance plan that exclusively
covers healthcare costs and is called Health Insurance.
Since the past
two decades, there has been a phenomenal surge in acceleration of healthcare
costs. This has compelled individuals to have a re-look on their actual monthly
expenditures, spending patterns and simultaneously allocate a proportion of
their income towards personal healthcare. This has resulted in individuals
availing healthcare insurance coverage not only for themselves but also for
their family members including their dependants. In short, healthcare insurance
provides a cushion against medical emergencies. The concept of insurance
is closely concerned with security. Insurance
acts as a shield against risks and unforeseen circumstances. In
general, by and large, Indians are traditionally risk-averse
rather than risk
Some major health insurance companies in India include National Insurance Company,
New India Assurance, United India Insurance, ICICI Lombard, Tata AIG, Royal
Sundaram, Star Allied Health Insurance, Cholamandalam DBS, Bajaj Allianz Apollo,
AG Health Insurance Company among others. Categories
Indian Health Insurance is primarily classified into 2
• Cashless Hospitalization
• Medical Reimbursement a) Cashless Hospitalization
Cashless hospitalization is a specialized service provided by an insurer wherein an
individual is not required to pay the hospitalization expenses at the time of
discharge from the concerned hospital. The settlement is done directly by the
insurance company (or insurer). However, prior approval is a must from the TPA
(Third Party Administrator) before availing the benefits under this option.
can be of two types:
• Planned hospitalization:
This is a planned hospitalization
wherein the insured is aware of the hospitalization in advance. This duration
period may vary from case to case. Examples include: FTND (Full Term Normal
Delivery), Chemotherapy treatment for carcinoma (cancer), for cataract surgery,
tonsillectomy (removal of tonsils).
• Emergency hospitalization:
It is a sudden hospitalization that may be either an emergency or due to
unforeseen circumstances. In short, hospitalization is not anticipated in
advance. Examples include RTA (Road Traffic Accident), Myocardial infarction
(heart attack), Acute Appendicitis. b) Medical Reimbursement
means to repay or to compensate. Thus, Medical Re-imbursement means to repay the
products/services availed during hospitalization and more importantly after the
completion of the treatment.
Under this procedure, the insured has to bear the entire expenses incurred during
hospitalization. After getting discharged from hospital, the insured/policy
holder can claim medical reimbursement. For availing benefits under this option,
the insured has to approach the concerned TPA under which he/she is covered,
fill the requisite form and satisfy all the requirements as mentioned. This
includes submission of TPA card, policy paper, discharge summary, prescriptions,
diagnostic laboratory reports, OPD treatment details etc. A sum is granted as
reimbursement for treatment expenses.
A recent survey conducted in
2008 showed that only 3% of the entire Indian population has availed some sort
of insurance policy and enjoys benefits included under its coverage. This
miniscule percentage constitutes both – PSUs
Undertakings) and Private insurance companies
. Since, the general
public are by and large ignorant about the benefits of availing healthcare
insurance policies, there lies an urgent need to educate the masses regarding
of Healthcare Insurance and the benefits
account of it.
There are numerous reasons for
not availing health insurance. There is a lack of knowledge regarding the
existing insurance products/services in the markets. On top of it, there are
numerous misconceptions about Insurance prevalent in the Indian Markets. Also
there are numerous fly-by-night agents out to fleece the gullible Indian public.
In India, public
funded healthcare is available only to a miniscule section of BPL (Below Poverty
Line) groups, low-income groups and to government employees. The Indian
Government has formulated Employee State Insurance Scheme (ESIS) that focuses on
the public healthcare policy for low-income groups. The government employees can
avail Central Government Health Scheme (CGHS) that offers medical treatment at a
With the opening
up of insurance sector for private participation, numerous players have entered
the healthcare segment, but inspite of the entry of private sector, penetration
of insurance coverage in India is abysmally low. Recently a legislature has been
passed in the Indian Parliament allowing 49% of FDI in insurance industry. Essential
Guidelines for Availing individual Health Insurance Policy:
The following points should be borne in mind while purchasing an individual health
• Understanding the policy coverage:
The policyholder should be able to clearly comprehend the extent of medical
coverage being offered under the particular health insurance policy before
opting for it. The individual should check whether pre-existing diseases and its
resultant complications are covered or not, as well as the extent of the
coverage under that particular policy.
• Keeping an eye for medical expenses
that are not covered/re-imbursable under the policy:
Before availing a particular health
insurance policy, the prospective policyholder should note the medical expenses
not covered under that Insurance policy. It is important to note that
deductibles are a part and parcel of any insurance coverage and the expenses
incurred as part of the medical treatment need to be borne by the individual.
Generally this list includes aprons, sterilization charges, gloves, Dettol,
• To understand whether it is a
Before availing a
health policy, the prospective customer should understand whether it is a
co-insurance policy or not. It is advisable to get an individual health
insurance policy with a co-insurance payment option. The maximum amount does not
exceed 15% of the entire medical coverage for a particular disease.
and updating oneself about expiry period regarding the policy cover:
An individual health insurance cover entails regular premium payments on
a monthly, half yearly or annual basis before the expiry of a particular policy. Non-payment of premium within the stipulated time results in the lapsing
of the policy with subsequent break in the policy coverage of the concerned
individual. Even though the concerned individual holds policy with an Insurance
company for many years together, a break in the policy coverage (which generally
does not exceed more than 15 days) is treated as a fresh policy cover
. Importance of
The importance of Health Insurance can never be undervalued for the
• Provides security to human life which is of prime importance
to any individual.
• Closely bonds
Insurance Companies, Hospitals, Policyholders and TPAs together for the benefit
of Indian masses.
• An answer to the solution
of uncertainties and risks that are prevalent and ever-pervading in human life.
• Prevention and
minimization of unforeseen losses.
• Access to quality
• Means of savings and a
safe investment option.
• Provides financial
• A tax-saving instrument
that significantly contributes in reduction of tax deductions.
• Reduces tensions and
stress caused on account of hospitalization.
• Greatly contributes in leading a stress-free life.