Business Line
12 April 2009
By Sanjay Datta

With the growing cost of health care in Urban India and a rise in the incidence of lifestyle diseases, consumers feel the need for a health insurance policy. To ensure that you are taken care of when the need arises, insurance companies provide you with a wide range of health insurance plans that cover much more than basic hospitalisation. Organisations usually opt for a group health cover for their employees. On the retail front, the standard family floater plan on indemnity basis is most popular. However, it is best to understand the nuances before opting for health insurance plan.

The individual health plan, as the name implies, covers only one person. If you are not married or do not have any dependants, an individual health insurance plan is the best option. An indemnity plan is a type of individual health insurance plan that gives you the freedom to choose any medical care provider and covers the hospitalisation expenses incurred on reimbursement or cashless basis. Before you buy any health insurance policy, make sure you know what it will pay for and what it won’t.

Tips when buying an individual insurance policy:
Policies differ widely in coverage and cost. Contact insurance company’s call centre or ask your agent to show you policies from several insurers so you can compare them.

Read and understand the policy. Make sure it provides the kind of coverage that is right for you. You don’t want unpleasant surprises when you’re sick or in the hospital.

Check to see if the policy states the date it will begin paying (some have a waiting period before coverage begins).

Beware of single disease insurance policies. There are some polices that offer protection for only one disease, such as cancer. If you already have health insurance, your regular plan probably already provides all the coverage you need. Check to see what protection you have before buying any more insurance.

What’s covered
In India, all major medical illnesses such as cancer, bypass surgery, myocardial infarction, kidney failure, major organ transplant, stroke, paralysis, heart valve replacement surgery and multiple sclerosis are covered under a health insurance policy.

Health insurance usually does not cover the following:
Any illness/disease/injury existing before the inception of the policy for the first four years;

Non–allopathic treatment, pregnancy and childbirth–related diseases, cosmetic aesthetic and obesity related treatment;

Expenses arising from HIV or AIDS–related diseases, use or misuse of liquor, intoxicating substances or drugs as well as intentional self injury;

Any medical expenses incurred during the first 30 days of inception of the policy, except accidents;

Congenital disease; Hospitalisation induced by war, riot, strike and nuclear weapons.

Tax savings
In addition to the above, health insurance also comes with tax benefits. The health insurance policy will help you save your investments and capital in the event of any critical illness in the family. The premium paid on health policy provides tax benefits as it is a deductible expense under the provisions of Section 80D of the IT Act. A health insurance plan is, therefore, an effective way of saving tax and obtaining a risk cover.