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Health Insurance


Health insurance covers your medical expenses against any financial constraints arising on account of a medical emergency. Health Insurance products are geared towards covering spiraling medical costs and manages your and your family's health-related needs right from consultation, hospitalization to post-hospitalization. A health insurance policy is a contract between an insurance company and an individual. The contract is renewable annually.

Health plans are available in three formats –

  1. Individual
  2. Family floater and
  3. Group plans

In an individual policy only the owner of the policy gets covered. In a family floater plan the whole family is covered under one single policy. While in a group plan, the sponsor owns the policy and the people covered under it are called its members.

There are three types of Health Insurance:

Medical Insurance

This is typically a hospitalization cover which provides for the reimbursement of medical expenses incurred while treating a specific disease or during a surgery while the insured is admitted in the hospital as a patient. Different types of medical insurances are available like individual medical insurance, group medical insurance and overseas medical insurance. There are health policies that reimburse you the actual hospitalization cost for treatment of any disease and are offered by the non-life insurers only. These policies are popularly called Mediclaim policies. Other types of health insurances are provided by both the life and non-life insurers.

Critical Illness Insurance

This plan insures you against the risk of serious illnesses in return of a premium you are required to pay. This gives you the same security of knowing that a guaranteed cash sum will be paid if the unexpected happens and you are diagnosed with any one of the critical illness. Sometimes a critical illness can change your lifestyle. In this type of health insurance plan, the insured receives a lump sum amount within a few days of diagnosing critical illness. Once this lump sum is paid, the plan ceases to remain in force.

Personal Accident Cover

This product is specially designed to cover you in case of accident related injuries, permanent disablement and death. Some insurance companies cover you on losses due to terrorism.

Why Health Insurance

In mid 80’s most of the hospitals in India were government owned and treatment was free of cost. With the advent of Private Medical Care the need for Health Insurance was felt and various Insurance Companies (New India Assurance, National Insurance Company, Oriental Insurance & United Insurance Company) introduced Mediclaim Insurance as a product. With the boom in this segment and the entry of private players in 2001, today over 21 insurance companies offer various health insurance plans Health insurance comes handy in case of medical related emergencies that lead to costly medical treatment. Moreover with the current sedentary lifestyle, people are prone to repetitive ailments. In order to keep the expenses down, having health insurance is important because the coverage will help you get timely medical care without footing huge medical bills out of your own pocket. A small premium paid regularly can help you offset huge expenses in the future (like saving for a rainy day). It also covers the risk of financial difficulties in the event of long illness. It acts like a financial cover against unforeseen medical expenditures, which could eat up your hard earned savings. At BimaIndia we aim to help you choose the plan that best suits your needs.


1. Who is eligible to buy Health Insurance?

Any individual from the age of 3 months up to the age of 65 years can purchase Health Insurance. Individuals over the age of 65 can also be covered under certain terms and conditions of the insurance companies. These conditions vary from one provider to another.

2. How do I select a Health Insurance policy?

A simple way of choosing can be done by asking yourself this question “What should the insurance policy cover me against?”

  1. Critical illness or injuries?
  2. All hospitalization expenses or OPD (Out Patient Department) expenses as well?
  3. Cover for both inpatient and outpatient costs?
  4. Or all the above

The best way is to analyze what type of medical conditions would affect you and your family. As an example if you have a family history of heart disease you have to choose carefully, as most insurance plans do not cover existing ailments. Such policies are definitely available however these come for a higher premium. Some companies do not provide any coverage for pre-existing diseases for the first few years. You need to carefully understand the premiums payable by you for all the years and also the amount of partial coverage of any pre-existing disease.

3. What are the benefits of Health Insurance?

  1. It helps securing a better future by paying a fraction as an expense today called premium, rather than paying a huge sum for an unforeseen medical expense.
  2. The best part is that you can also opt for health insurance policy even after the age of 60.
  3. It induces a sense of security to the insured.
  4. It covers your hospitalization and medical bills.
  5. Save Tax - You can avail tax benefits on the premium paid under section 80d of the Income Tax Act.
  6. It provides financial security to the family members.
  7. It also covers disability and custodial bills.
  8. It reduces saving huge amount of financial losses, risk of financial breakdown in case of expensive medical and post-illness care.

4. Are pre-existing diseases covered?

Certain Insurance policies do not include pre existing diseases while some may cover after a certain period of time.

5. What is TPA?

TPA stands for Third Party Administrator. TPA is a Health Care Service provider which is approved by the Insurance company. They have the expertise and capability to administer all or a portion of the claims process, hence providing hassle free and speedy process.

6. What is Co-payment?

As the name suggests, a certain percentage of money is paid by the insured while settling the claims. This happens when the insured gets treated in a hospital other than the network hospital as stated in the policy. Copayment is also applicable when the insured’s age is above 60 years. The terms and conditions of copayment vary from one insurance company to other.

7. What are renewal benefits?

Benefits that the insured can obtain after a claim free period such as reduction in the premium amount while renewing the policy, increase in the sum assured and so on. Insurance companies have their own terms in setting the amount and type of benefit for the policy holder.

Certain other benefits like ‘free health checkup’ and similar kinds are offered at the end of claim free period.

8. Are critical illnesses covered while buying a health insurance policy?

Generally, critical illnesses like heart related problems are not covered by Insurance companies. But certain companies do offer to cover critical illness on a higher premium based on certain conditions, as set by them.

9. After claiming against the policy, will there be any extra charges for renewal of the policy for the next period?

Yes, a certain extra amount would be charged, known as Loading Charges. Apart from a raise in premium these charges are levied against those who have filed for claims.

10. How is the premium calculated?

Premium depends on several factors:

  1. Your age: Age is the most important factor for determining the premium since health risk increases with age and thus the premium payable will increase as well.
  2. Amount of coverage required by you.
  3. Number of family members covered under the plan.
  4. Your monthly income
  5. Other additional benefits provided under the plan.

Note that the cheapest premium may not necessarily be the most “value for money” policy. Read all the benefits covered under the different plans before you make up your mind.

Points to note before buying health insurance

  1. Before buying a health insurance policy, decide whether you want to cover your family under one single policy or you would prefer an Individual coverage. This depends upon each family member’s health condition.
  2. Based on previous health related issues and current conditions, assess the minimum coverage you would require (Sum assured required). This can be calculated based on the average medical costs which will be incurred for a Critical surgery cost and/or accidental hospitalization. The average cost of medicals in these cases will be close to 3-5 lakh rupees. Suggested sum assured for any individual or Family will be 5 lakh rupees.
  3. Make sure you take a look at the list of Network hospitals available with the Insurance company. This will help you decide whether you have a listed hospital in your area with all required facilities.
  4. Another important aspect is the track record of genuine claims settlement by the insurance company. If claims settlement track record of that insurance company is poor, despite offering a good policy you could end up in trouble in times of emergency.
  5. The ease with which you can go ahead with the claim process is important. Hence check for availability of online claims submission, TPA toll free number, 24/7 Helpdesk number for any query handling.

Recommended Readings

Ways to keep yourself healthy and fit.

As the saying goes ‘time and tide waits for no one’, hence life is moving at a faster pace. To keep up with the pace, people often do not find time for daily exercises and find it difficult to maintain a healthy lifestyle. It is vital for you to be physically active in order to be healthy. There are certain tips that can help you remain fit without having to revamp your busy schedule.

  1. Instead of sitting in your office chair whole day and staring at the computer, it would be nice if you take small breaks, like walking over to your colleague and giving the message yourself. It’s an excellent way to stretch those stiff muscles.
  2. It’s good to spend some time exercising. A 30 minute exercise daily can be rewarding. But hey, these 30 minutes can also be broken down into 15-15 minute intervals. You can take rest in between and continue later when you have time.
  3. Relax now and then. Taking stress is ok, but living with it might be dangerous. The perfect remedy is meditation and yoga. Small activities like chilling out with friends, cracking a joke, spending time with family can help a long way in beating stress easily.
  4. The most important is having a balanced diet. A good way to detoxify and stay healthy is to eat natural foods. Try to reduce your intake of processed foods as much as you can. When you eat is as much important as what you eat. Do not skip meals and do not have late meals. Studies have found that late breakfast can increase the fat level
  5. To lead a perfect and a healthy life, all you need is a little bit of planning. A little bit of self assessment and familiarizing yourself with certain lifestyle related diseases can help you in the long run.
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