Types of Health Insurance Plans

What are the Different Types of Health Insurance Plans in India?

Take a look at the various types of health insurance policies in India below:

List of Different Types of Health Insurance Plans

1. Individual Health Insurance

   Individual health insurance plans are meant for a single person only. It covers the incurred medical and hospitalization expenses of the single person covered in the policy up to the sum insured limit.

   In case of more than one family member, each covered member gets an individual sum insured. For instance, if you own an individual health cover of ₹1 lakh where your spouse is also covered, you both can claim up to ₹1 lakh individually.

   When to Buy?

   • If you are an unmarried adult
   • If you are above 45 or 50 years
   • If you have any pre-existing disease (PED)
   • If you want comprehensive coverage beyond hospitalization expenses

2. Family Floater Health Insurance

   A family floater health insurance policy is meant for the entire family. You can cover the medical expenses of your complete family under a single policy. The sum insured is shared by all the family members on a floater basis. One positive thing about a family health insurance plan is that the premiums are comparatively lower than individual or mediclaim policies.

   When to Buy?

   • If you are a newly married couple
   • If you have a nuclear family with young children

3. Senior Citizens Health Insurance

   Senior citizens health insurance plans are designed to cover the healthcare expenses of elderly people above 60 years. It focuses on the health needs of senior citizens and may not require a pre-medical screening before buying the policy. However, the premiums of a senior citizens health policy are high as elderly people are more vulnerable to various age-related health issues.

   When to Buy?

   • If you are above 60 years old or about to turn 60, then you must buy a senior citizen health insurance policy.

4. Critical Illness Insurance

   A critical illness Insurance plan is designed to cover the treatment cost of critical illnesses, such as heart attack, cancer, liver failure, stroke, etc. On detecting a listed critical illness, the insurer pays the sum insured amount to the policyholder, irrespective of the actual medical expenses.

   Unlike other health plans, it does not require you to get hospitalized to raise a claim. However, critical illness insurance plans come with a waiting period of up to 90 days and a survival period of up to 30 days. Moreover, the plan ceases to exist as soon as a claim is filed.

   Some of the major diseases covered by most critical illness plans include:

   • Major organ transplant
   • Cancer
   • Stroke
   • Aorta graft surgery
   • Multiple sclerosis
   • Kidney failure
   • Paralysis
   • Coronary artery bypass surgery
   • First heart attack
   • Primary pulmonary arterial hypertension

   When to Buy?

   • If you have a family history of any major illness or critical illness, then you must buy a critical illness insurance policy.

5. Maternity Insurance

   Maternity insurance is a women health insurance plan designed to cover the medical expenses of pregnancy and childbirth. It pays for pre-natal & post-natal expenses, medical termination of pregnancy and newborn baby treatment and vaccination expenses. Women who are already pregnant and those planning their pregnancies can opt for this policy.

   However, pregnancy health insurance plans come with a waiting period, ranging from 3 months to up to 4 years, depending on the plan.

   When to Buy?

   • If you are already pregnant, you can opt for a maternity insurance plan with immediate coverage.
   • If you are planning your pregnancy, you can opt for a maternity plan with a waiting period ranging from 3 months to 2 years, as per your requirements.
   • If you are a newly married couple, you can opt for a pregnancy insurance plan with a waiting period of up to 4 years, as per your future plans.

6. Top-up Health Insurance

   A top up health insurance policy can be used to pay for medical expenses if your base policy has been exhausted. It comes with a mandatory deductible and offers high sum insured options. It helps you to ensure additional medical coverage instead of buying a new policy.

   When to Buy?

   • If you want a high sum insured for an affordable premium
   • If you want a health insurance policy as backup in case your base policy gets exhausted

7. Personal Accident Insurance

   A personal accident insurance policy covers the policyholder against accidental death or physical disabilities. Under this policy, a lump sum amount is paid to the insured in case of loss of income due to permanent partial or total disability. In case of the death of the policyholder, the entire sum insured is paid to the nominee. With a PA policy, you are financially protected against accidents and their effects.

   When to Buy?

   • If you are the breadwinner of the family
   • If you have a risky occupation

8. Mediclaim Insurance

   Mediclaim insurance compensates you for the hospitalisation expenses incurred due to an illness or accident. It includes in-patient expenses, such as nursing charges, surgery expenses, doctor’s fees, oxygen, anaesthesia, etc. This basic health plan covers unforeseen hospitalization expenses, which is one of the biggest reasons for financial burdens.

   When to Buy?

   • If you want coverage only for hospitalization expenses, you must buy a mediclaim policy.

9. Hospital Cash Insurance

   A hospital cash insurance policy pays a daily cash allowance to the insured for up to a certain limit, apart from the hospitalisation expenses. This amount is paid to cover day-to-day expenses for each day of hospitalization, such as food charges, admission charges, etc. Some health plans offer hospital daily cash as an in-built cover too.

   When to Buy?

   • If you want coverage for ancillary expenses incurred during hospitalization, you must buy a hospital cash insurance plan.

10. Disease-Specific Health Insurance

    Disease-specific health insurance plans have been designed to address the unique healthcare needs of people suffering from different diseases. Health insurance for diabetes, dengue health insurance, coronavirus health insurance, etc., are examples of disease-specific health plans. Such plans cover the medical expenses incurred on the treatment of these specific diseases.

    When to Buy?

    • If you have been diagnosed with a lifestyle disease, such as diabetes, cancer, hypertension, etc., then you must buy a health insurance policy for that disease.
    • If you live in a city where vector-borne diseases are common, you must buy health insurance for malaria or dengue.

Other Types of Health Insurance Plans

Alternatively, the above types of health insurance plans can also be categorized based on the type of compensation provided.

1. Indemnity Health Insurance Plans

   Indemnity health insurance plans reimburse your medical or hospitalisation expenses up to the sum insured limit. You can raise multiple claims in a policy year until your sum insured amount is exhausted. These plans include:

   • Mediclaim Insurance
   • Individual Health Insurance
   • Family Floater Health Insurance
   • Senior Citizen Health Insurance
   • Maternity Insurance
   • Top Up Health Insurance

2. Fixed-Benefit Health Insurance Plans

   Under a fixed-benefit health insurance plan, the insurer pays the entire sum insured amount in a lump sum or as a staggered payout in case of an accident or upon the detection of illness. These plans include:

   • Critical Illness Insurance
   • Personal Accident Insurance
   • Hospital Daily Cash Insurance

9 Things to Consider While Choosing the Right Type of Health Insurance Plan

You must consider the following factors to choose the right type of health insurance policy for yourself:

1. Age

   You must consider your age while choosing a health plan. If you are a young adult in your early 20s or an elderly person in your late 40s and 50s, buying an individual health insurance policy is recommended. But if you are over 60 years old, you must purchase a senior citizen health insurance plan.

2. Current Health Condition

   You should keep your current health condition in mind while selecting a type of health insurance plan for yourself. If you are healthy with no pre-existing diseases,purchasing an individual health plan is a good idea. But if you suffer from a lifestyle disease, then buying a disease-specific health plan is advisable.

3. Coverage

   The coverage you seek from your health plan should also be kept in mind while choosing a plan type. For instance, if you want coverage for maternity expenses, then buying a maternity plan is recommended. However, if you want coverage only for hospitalization expenses, purchasing a mediclaim insurance policy is advisable.

4. Medical History of Family Members

   You should consider the medical history of your family members at the time of selecting a medical insurance plan. If you have a family history of major illnesses, like heart ailments, cancer, stroke, etc., then buying a critical illness insurance policy is important.

5. Sum Insured

   The sum insured of a health policy should also be considered when picking the right plan for yourself. If you want a policy with a high sum insured, you must purchase a top-up health insurance policy.

6. Waiting Period

   You should check the waiting periods before deciding on the medical insurance plan you want to buy. While most plans cover pre-existing diseases after a waiting period of up to 3 years, some offer PED coverage from day 1.

7. Deductibles

   You should check for deductibles at the time of choosing a health policy for yourself. If you want deductibles in your policy, you can opt for a top-up insurance policy or voluntary deductibles in your mediclaim policy.

8. Exclusions

   You should go through the exclusions in health insurance plans before selecting the policy you want to purchase. Opt for a plan that covers the diseases or medical expenses for which you want coverage. For instance, if you want coverage against cancer treatment expenses, buying a cancer insurance plan is recommended.

9. Co-payments

   You should check the co-payments applicable in a plan before buying. If a plan comes with a high co-payment, then you can choose another one. Similarly, if your desired plan comes with no co-payment, you can consider buying that plan.

6 Reasons to Buy Health Insurance at a Young Age

Apart from the ever-rising medical expenses, the reasons for buying health insurance at a young age are:

1. Comes with Lower Premium

   Medical insurance premiums are much lower if you buy it in your 20s or early 30s than in your old age. As you are less likely to fall sick in this stage of life, health insurance companies offer plans at a lower premium, considering the low-risk appetite. If you compare, the premium you pay for a plan in your 30s will cost you double in your 50s.

2. Easy to Get Insurance

   It is quite difficult to get a mediclaim policy with existing health issues. Even if you get one, you will have to pay a higher premium. Moreover, if you do not disclose your illness at the time of buying and file a claim for a complication arising out of such illness, your claim will be rejected by default. At a young age, you are less prone to health issues, so availing medical insurance is easy.

3. Save More on Tax

   Section 80D of the Income Tax Act 1961 benefits the policyholder with tax deductions for paying health insurance premiums. If you buy a health plan at an early age, you can enjoy tax benefits for a longer period than a person who bought it in his/her middle age.

4. Easy to Serve Waiting Period

   Health insurance comes with waiting periods, such as an initial waiting period of 30 days, a pre-existing illness waiting period of up to 3 years, etc., depending from insurer to insurer. When you are hale and hearty, you do not need to claim your insurance. This way you can serve the waiting period easily and file your insurance without a hassle when you actually get sick.

5. Avail No Claim Bonus

   Medical insurance comes with an additional bonus as well. One such bonus is the No Claim Bonus, which is offered for not claiming your insurance in the previous policy year. The NCB is provided as a discount in the premiums of consecutive years or as a hike in the sum insured for the same premium. When you are young, there are lesser chances of claiming your insurance, and you can earn NCB easily.

6. Timely Diagnosis of Diseases

   Several health insurance plans come with preventive health check-up benefits. If you buy a policy with an annual health check-up benefit, your health condition will be evaluated every year. As a result, any disease will be timely diagnosed at an early stage if you buy a mediclaim policy at a young age.