Healthcare expenses can be the biggest drag on your finances. With lack of quality public healthcare system, we invariably fall back on private medical services, which come at a higher cost. Moreover, with healthcare inflation increasing at a double-digit rate, it is imperative for us to be financially ready for any medical emergency.
Just as having health insurance plan is essential, it is equally crucial to have the right kind of policy/policies for a comprehensive cover. To know which insurance policy to buy, you should first be aware of the different types of insurance policies available in India.
There are broadly four kinds of health insurance plans:
1. Mediclaim or indemnity plans:
This is the most basic and popular form of health insurance product available in the market. A mediclaim policy covers the cost incurred due to in-patient treatments or hospitalization of the patient. The cost incurred during the hospitalization is either reimbursed or paid by the insurance company through a cashless facility. Mediclaim policies do not usually cover pre-existing diseases. Mediclaim policies are of two types - individual and family floater. In a family floater policy, you can include your spouse, kids and even dependent parents.
2. Top-up plan:
A Top-up plan is an additional cover, which kicks in when you have exhausted the cover limit of the base mediclaim policy. For example, if you have a base policy of ` 5 lakh cover and a top-up cover of ` 7 lakh, the top-up cover comes into picture only if you have exhausted the ` 5 lakh limit. Top-up plans are always taken in combination with a mediclaim policy. They are cheaper than the base mediclaim policy.
3. Hospital Cash Benefit Plan:
One of the limitations of common mediclaim policies is that they only cover the hospitalization expenses. However, when one is in hospital, there are many other different kinds of costs that you incur such as medicine, physiotherapy, transportation costs and so on. A hospital cash benefit plan gives a fixed daily cash payout, the amount of which depends on the premium you are paying. Typically, you are paid a sum of ` 1,000-` 3,000 per day of hospitalization. A hospital cash benefit plan can be bought as a rider with a mediclaim policy or as a stand-alone policy.
4. Critical Illness Cover:
A critical illness cover is a health insurance plan that gives a one-time lump sum amount in case of detection of any specified critical illness. The amount paid depends on the sum assured opted under the plan. A critical illness cover is offered as a rider with a life insurance policy or as a stand-alone cover. A stand-alone plan is better as it covers more critical illnesses (30-35 diseases) than a critical illness rider does (10-20 diseases). Adding riders like accidental partial/full disability covers can further expand the cover of a standalone critical illness plan. Typically, the sum assured under a critical illness cover could be as high as ` 50 lakh. Bajaj Allianz has recently launched Health Care Goal which covers as many as 36 critical illnesses, including various heart ailments and cancer. It comes with four variants to help you meet your specific requirement.
5. Need of a potent blend:
One should opt for a combination of two or more types of health plans to get a comprehensive cover. While Mediclaim helps in case of hospitalization, Critical Illness cover is a must-have in case one gets a Non-Communicable Disease (NCD). It would help if you opted for a combination of different types of health plans based on your age, health profile and life circumstances.
A contingency plan for a medical emergency is crucial to ensure that our journey towards our life goals is not cut short because we had to spend money on medical expenses. Timely and a comprehensive health insurance is a must have for protecting your savings in case of medical emergency.