Health Insurance: Types of covers available

In my last blog post we read Importance of Health Insurance in protection of your well-being and finances, today we will understand types of health insurance policies available for your personal needs in simple and understandable language.

Types of health insurance plans: Comparing and contrasting different types of health insurance plans, such as Indemnity and Benefit, to help individuals make informed decisions about their coverage options.

Let’s understand each one in details for better understanding and taking well understood decision as per our personal needs.

Indemnity Policy: Indemnity Insurance in simple term to understand is the insurance where reimbursement is available up to the sum insured taken in a particular insurance year. This reimbursement is towards the expenses made on treatment taken. Indemnity insurance plans typically have deductibles, which is the amount you must pay out of pocket before the insurance coverage begins. After meeting the deductible, you may still be responsible for coinsurance, which is a percentage of the cost of services that you must pay. There is usually an out-of-pocket maximum, which is the maximum amount you are required to pay in a policy year. Once you reach the out-of-pocket maximum, the insurance company typically covers 100% of the remaining costs for covered services.

It's important to review the terms and conditions of an indemnity insurance policy carefully, as coverage and reimbursement rates can vary significantly between policies and insurance providers. Additionally, indemnity insurance may not cover certain services, such as preventive care, dental care, or vision care, so it's crucial to understand what is included and excluded from your policy.

Types of policies available under Indemnity policy:

• Retail Policies: We purchase directly from insurance companies for self and our families.
• Group Policies: We can purchase them from Banks under their bancassurance tie-ups with insurance companies. This cost less compared to Retail Policies and can be good option, depending upon personal requirements.
• High Deductible Policies: This insurance is advised to take over and above your primary health insurance (Retail or Group). This is a unique product where one can purchase these policies called as “Top-Up or Super Top-Up Plans”, wherein by having these policies you are saved from high medical costs over and above primary health insurance and are available at very nominal cost. This must be taken to bridge this coverage gap; you can purchase a high deductible or top-up health insurance policy. This secondary insurance policy helps cover the expenses that your primary insurance does not cover due to Sum Insured Limit in a policy year.
• Critical Care Policies: This insurance policy is often purchased to take care of high expenses towards medical expenses of critical care for diseases like Cancer, Heart Attack, Stroke etc. These cover specific disease/procedure only.

When you have a medical expense that exceeds your primary insurance's deductible, you can submit a claim to your top-up insurance provider. The top-up insurance will reimburse you for the eligible expenses according to the terms and conditions of the policy.

• Insurance provided by employer: This is available in organized sector, where employer provides health insurance coverage benefit to employees and their dependents including spouse, children up to certain age and parents/in-laws as a social security measure. Employer-provided health insurance is often a group insurance policy, which means that the risk and cost of coverage are spread across a pool of employees. In most cases, employers contribute a portion of the premium for the health insurance plan, reducing the cost for employees. The amount of the employer's contribution can vary, and employees may be responsible for paying the remaining portion of the premium.

Benefit Insurance: Benefit insurance under health refers to a type of insurance that provides specific benefits or coverage for certain medical services or conditions. Unlike comprehensive health insurance plans that cover a wide range of medical expenses, benefit insurance is designed to provide focused coverage for specific needs. Here's a breakdown of benefit insurance under health:

• Defined Benefits: Benefit insurance plans outline specific benefits or services that are covered. These benefits are often tailored to address medical conditions, treatments, or healthcare services.
• Limited Coverage: Benefit insurance plans have predefined limits on the scope and extent of coverage. They may cover expenses up to a certain amount or for a specific duration. For instance, a plan might provide a fixed sum for outpatient surgeries or a fixed payout in the event of diagnosis.
• Specialty Coverage: Benefit insurance often focuses on specialized areas of healthcare, such as critical, chronic, or life-threatening illnesses involving high treatment cost or no treatment available.
• Customizable Options: Benefit insurance plans may offer flexibility for individuals to choose the specific benefits they need based on their circumstances. This allows customization to match individual preferences and requirements.

It's important to carefully review the terms and conditions of each insurance policy to understand what it covers, any waiting periods, exclusions, and the process for filing claims. It's advisable to consult with a licensed insurance agent or contact insurance company directly to get accurate and up to date information and find a policy that suits your needs.

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