Types of Health Insurance Explained

For salaried professional, medical bills may be a major part of your monthly expenses. The spiralling costs of various diagnostic tests, hospitalisation, post-operative care and recovery can put a strain on your finances. Health insurance helps you tide over medical emergencies to a great extent. However, not all types of health insurance may be the best fit for your needs.

Choosing between individual health insurance and group health insurance is much simpler when you carefully consider the long-term health needs of your family. Buy health insurance only after doing a cost-benefit analysis to ensure optimal coverage at the lowest possible cost.

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Insurance companies in India provide broadly 5 types of health insurance products. Let’s take a look at the various types of health insurance available.

Individual plans: These are specially suited for individuals who are at a high risk of hereditary and lifestyle diseases. Individual health insurance plans cover you from medical expenses to the extent of the sum insured.

They also offer tax benefits under Section 80D and cover hospitalisation expenses. Individual health insurance plans cover specified expenses including pre- and post-hospitalisation charges.

To cover your family members, you will need to buy multiple individual plans.

Maternity plans: As the name suggests, maternity plans cover hospitalisation, ambulance, delivery, pre- and post-natal care expenses. While the long wait time to avail coverage is considered a negative aspect of such plans, as late pregnancies result in higher chances of complications during childbirth, maternity coverage helps families cope with related expenses better.

Family floater health plans: These plans provide a consolidated health cover to you and your family. Rather than invest in separate individual health insurance policies for each family member, family health insurance plans let you insure every member of your family for a single premium.

These policies provide better value for money as they provide broader coverage per rupee spent by you.

Critical illness insurance plans: Medical conditions like multiple sclerosis, cancer or cardiac diseases require intensive, long-term treatment which is expensive. Critical illness plans offer a fixed cover to help you manage treatment costs while maintaining enough liquidity for living expenses.

These plans are especially recommended for people who have a history of illness such as hereditary or congenital ailments.

Unit-linked insurance plans: Many insurers also offer unit-linked insurance plans that provide investment benefits to policyholders. However, since such investments are subject to market fluctuations, your returns may vary widely depending on prevailing market conditions.

Unit-linked insurance plans provide an added dimension of wealth generation along with health coverage.  Depending upon your risk appetite, your insurance company invests in a variety of stocks on your behalf.

To meet specific needs, health insurance plans are also available with add-ons that cater to additional hospital expenses, post-operative care and post-delivery expenses.

From the many types of health insurance, select the most suitable one based on the premium to be paid, claim settlement record, pre-existing disease coverage and exclusion policy. This will help you and your family get the best health insurance for your needs.

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