Health Insurance – Part 2

In the previous article we had discussed about what is health insurance policy, difference between mediclaim and health insurance policy and different types of health policies. Here, would like to answer some more queries:

Are there any tax benefits which can be availed through health insurance plans?

Medical insurance premium paid offers tax benefits under section 80D of the income tax act. An individual can claim a deduction of up to Rs 25,000 for the insurance of self, spouse, and dependent children. An additional deduction for the insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age, or Rs 50,000 (as per the Budget 2018) if your parents are aged above 60.

If both the taxpayer and the parent whom the medical covers have been taken for are aged more than 60 years, the maximum deduction that can be availed under this section is to the extent of Rs.100,000.

What is the claim settlement ratio?

Claim settlement ratio would indicate the ratio of claims settled against claims reported during the year. Always make sure to check the ratios of your health insurer before you purchase the plan.

The major reasons for refusal of claims for health insurance are:

Ø  Related to pre-existing diseases

Ø  Related to waiting period

Ø  Hospitalization not justified

Ø  Diagnostic/Investigation purpose

Ø  Other exclusion clauses of the policy

Ø  Misrepresentation/Fraud

Ø  Experimental/Unproven treatment

Is there a waiting period for claims under a health insurance policy?

Usually, there will be 30 days waiting period, starting from the policy inception date. During this period any hospitalization charges will not be payable by the insurance companies. However, emergency hospitalization occurring due to an accident is excluded.

What is the maximum number of claims allowed over a year?

Unless the policy specifies a cap, any number of claims is allowed during the policy period. But remember that the sum insured is the maximum limit under the policy.

What is a "health check" facility?

Some health insurance policies pay for specified expenses towards general health check up once in a few years. Usually, this is available once in four years.

What are the factors that affect Health Insurance premium?

Five factors can affect a plan’s monthly premium: location, age, tobacco use, plan category and whether the plan covers dependants. Age is a major factor that determines the premium. Previous medical history is another major factor that determines the premium. Claim free years can also be a factor in determining the cost of the premium as it might benefit you with a certain percentage of the discount.

Can the health insurance policy expire if it is not renewed on time?

Health plans are typically offered as one year contracts and require a renewal notice informing every year. Some insurers may send a renewal notice informing the insured about the expiry of the policy. The policy will lapse if not renewed in time, and the insured will not be eligible for any continuity benefits.
Usually, a grace period of 15 days is available to pay the premium from the date of expiry of the policy. However, coverage would not be available for the period for which no premium is received by the insurance company.

Can the policy be transferred from one insurance provider to another provider without losing the benefits?

The Insurance Regulatory and Development Authority (IRDA) has issued a circular making it effective from 1st October, 2011, which directs the insurance companies to allow portability from one insurance company to another and from one plan to another, without making the insured to lose the renewal credits for pre-existing conditions, enjoyed in the previous policy. The sum insured under the previous policy will continue.

What is a cashless facility?

Health insurance companies have tie-up arrangements with several hospitals all over the country. Through these tie-ups, the hospitals become part of the network.  If a health insurance policy offers the cashless facility, a policyholder can take treatment in any of the network hospitals without having to pay the hospital bills. The payments to the hospital are made by a third-party administrator who acts on behalf of the insurance company.

In case of any expenses beyond the limits or sub-limits allowed by the insurance policy or expenses not covered under the policy, the cashless facility will not apply. The policyholder will have to separately pay for those. Cashless facility is also not available in the event the policyholder does not avail the treatment at a network hospital.

I hope I have been able to clear most of your doubts that you might have about health insurance. So go ahead and buy a health insurance policy to protect yourself from unexpected high medical costs.

Source: moeycontrol.com

                                                                     All the best!