What are the Benefits of Having Health Insurance Plans?

A health insurance plan offers you financial protection in case of hospitalisations. However, that’s an obvious benefit of having health insurance, whereas, they have a myriad of other benefits that we can only grasp if we properly know the nuances of health insurance. 

In this article, we’ll delve into the various benefits, ranging from financial and medical to mental, of having a robust health insurance plan in place. We’ll also guide you regarding the process of choosing a policy that aligns with your unique needs. Without further ado, let’s get into it: 

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What are the benefits of having health insurance plans?

1. Access to quality healthcare services: A health insurance plan with an extensive network of partnered hospitals can significantly reduce your financial worries, allowing you to access top-notch healthcare services on a cashless basis. When one is low on funds, it’s natural that they’d want to cut costs, leading them to choose sub-par hospitals or healthcare services when they get hospitalised. With the right kind of coverage, you get access to the best in healthcare without depleting your resources. 
2. Coverage for medical expenses during emergencies: A health insurance plan provides quicker access to quality care, ensuring that you receive timely treatment without the stress of upfront payments. With cashless facilities, you can focus on your recovery while the insurer handles the financial aspects, reducing delays and financial strain during emergencies.
3. Convenient access to advanced/modern medical treatments: If you develop an illness requiring specialised intervention, such as robotic surgeries or stem cell therapy, treatment costs can be overwhelming. Advanced medical procedures often come with a hefty price tag, but with health insurance, you get access to state-of-the-art medical facilities without having to shell out money from your pocket.
4. Free annual health check-ups: Most insurers offer a free annual health check-up within a set coverage limit, covering a pre-decided set of diagnostic tests at network hospitals. This benefit promotes preventive care, helping detect potential health issues early while keeping you informed about any changes over the past year. Regular check-ups require both discipline and money, but with this provision, you stay motivated to monitor your health without additional financial burden. 
5. Incentives to maintain a healthy lifestyle: Earning premium discounts, gym subscriptions, and fitness tracker perks is a great financial benefit offered by many health insurers. To encourage a healthier lifestyle, they reward efforts like walking 10,000 steps a day, helping you stay fit and combat a sedentary routine. This extra push supplements your internal clock, and since everyone loves discounts, it’s the perfect reason to bring out your running shoes and hit the track. 
6. Mental health coverage: Mental health hasn’t always been prioritised like physical health, but as awareness grows, health insurers have slowly but surely started offering coverage for psychiatric and psychological conditions. The IRDAI (Insurance Regulatory and Development Authority) has mandated that health insurance must cover mental health disorders during hospitalisation, ensuring that those facing these challenges have financial support. This not only encourages open discourse about mental health conditions but also reassures individuals that help is available if they need it. 
7. Tax benefits: Under Section 80(D) of the Income Tax Act, the proposer (person under whose name the insurance is bought) is entitled to up to ₹ 1,00,000 in tax deductions if they have taken a policy for themself, their spouse, their kids, and/or their parents. The actual amount they’ll receive will be contingent upon the amount of premium they pay annually. This deduction is only available under the old tax regime. 
8. Maternity and newborn coverage: Maternity coverage in health insurance provides comprehensive support during the critical time of childbirth. It ensures that the birth of your child, whether through a normal delivery or a C-section, is as untroubled as possible. Additionally, such coverage includes protection for your newborn from day 1 up to day 90, addressing any urgent medical needs. This provision helps mothers rely on their health insurance plan during times that can involve medical complications.
   However, there are certain disadvantages to consider. First, there is almost always a waiting period associated with maternity coverage. Second, many individual plans do not offer maternity benefits,  making it necessary to opt for family floaters instead. Third, there may be sub-limits attached to your maternity coverage, which can greatly reduce its scope. Despite these pitfalls, maternity coverage can be essential if you want financial protection during the pre and post-natal stages.
9. International coverage: Choosing a health insurance policy with international coverage can provide access to medical treatments abroad, ensuring protection during foreign travel. This is particularly important for frequent travellers, who may face a medical emergency while away from their home country.
   However, it’s important to be mindful of certain limitations. First of all, unplanned hospitalisations are rarely covered. Next, the policy may altogether refuse to include certain countries like the USA  or Canada given that the treatment there is ridiculously expensive. Lastly, the premiums for a policy with international cover would be highly prohibitive. However, if you still want a policy that provides international coverage, you can avail it. 
10. OPD coverage: Opting for Outpatient Department (OPD) coverage has some significant advantages. By reducing out-of-pocket expenses for doctor consultations and diagnostic tests, they encourage routine medical assessments and preventive healthcare. Moreover, most plans also offer teleconsultation across network hospitals for free.
    However, it's important to be aware of certain limitations. Insurance providers often set caps on OPD benefits, limiting the frequency of visits or the total expenditure covered. Some policies may exclude coverage for medications or specific treatments. Moreover, plans with OPD coverage typically come with higher premiums. Therefore, it's crucial to assess your healthcare needs and financial situation before opting for OPD coverage.
11. Coverage for chronic conditions: Chronic conditions such as diabetes, hypertension, cancer, etc., are all covered by health insurance policies in case you develop them after getting the policy. Other than that, they are also covered if they’re diagnosed before getting the policy if they are not severe in nature. If it’s the latter, you may have to serve a waiting period and pay loading charges. However, some insurers also offer add-ons/riders to reduce waiting periods for these. 

How to choose the best health insurance policies?

There are two aspects to choosing the best insurance policy for you. First, you should pick a reliable insurer. Secondly, you should choose a policy with great features. Both are equally important.

A. Choosing the top health insurance provider

1. High Claim Settlement Ratio (CSR): The Claim Settlement Ratio of a company is the percentage of claims they settle within a specified period. It is calculated as such: Claims Settled/(Claims booked + Claims outstanding at the beginning of the year - Claims outstanding at the end of the year).
   
   The higher the CSR of a company, the more claims they’re settling. Theoretically, the higher the better when it comes to CSR but the ideal range for a company’s CSR is => 90%.
2. Excellent Incurred Claim Ratio (ICR): The Incurred Claim Ratio of an insurer is an essential metric that helps us gauge its credibility. The ratio is given by - the total amount involved in settling claims across a year against the total amount of premiums collected in the year, multiplied by 100. 
   
   The metric helps you get clarity on the financial sustainability of the insurer and its future claim settlement potential. Additionally, it also gives you a quick insight into whether you might be looking at significantly hiked premiums and/or rejected claims to balance out the insurer’s financial standpoint. In the case of ICR, the ideal range is 55% to 85%. An ICR lower than that suggests that the company is either leaning towards rejecting claims or imposing significant hikes across its premium structures. On the other hand, a very high ICR as mentioned in the second example, indicates that the company is not very financially stable as they’re bleeding out more money than they’re receiving.
3. Low complaint volume: The Average Complaint Volume is a metric used to assess a company's operational efficiency. It is calculated by noting the number of complaints registered per 10,000 claims submitted to the company. Naturally, the lower the complaint volume of a company is, the more efficient it is in settling claims.
4. Optimum Annual Average Business Income: This metric assesses an insurance company’s turnover and overall size. It helps differentiate between small, medium, and large companies, allowing you to choose based on your preference for a particular company size.
5. Extensive network hospitals: Network hospitals are hospitals partnered with an insurance company to provide seamless cashless treatment for their insured members. The larger the network, the easier it is to find a quality hospital nearby. As a general rule, it's beneficial for an insurance company to have a network of over 7,500 hospitals, with more than 10,000 hospitals being even better for wider access to care.

B. Choosing the Top Health Insurance Plans

1. No co-payment: Co-payment is a feature of insurance policies that requires the insured to pay a share of the amount of claim made by them. For instance, if a policy has a 20% co-payment and you run a bill of 5 lakhs, you’d have to pay 20% of Rs 5 lakhs, i.e., Rs 1 lakh, by yourself, with the insurance company covering the rest.  It is not a good feature to have in a policy as it implies that you’d have to dole out money from your own pocket every time you make a claim and/or are hospitalised. As such, we would always recommend a policy that does not have a co-payment feature.
2. No room rent restrictions:   Room rent restriction is a feature that sets a monetary or category-wise limit to the rent of the hospital room you choose. For example, a certain policy could have a room rent restriction of 1% of the Sum Insured (monetary limit). Another policy could set the cap at a Single Private Room with AC. However, there is a caveat here. Not only will the company not pay your room rent beyond the specified cap, but they also will not pay for the services rendered by the hospital beyond a certain amount. That amount will be proportional to the amount you exceeded by taking a more expensive room. It’s best to have a policy that does not have this feature.
3. No disease-wise sub-limits: Disease-wise sub-limits imply that an insurance company will only agree to a payout up to a certain financial limit for specific diseases. For example, maternity covers often set the limit for a normal delivery at Rs 40,000 and for a C-section delivery at Rs 60,000. That’s all they’d be willing to pay and you’d have to furnish the remaining amount on your own.It’s always better to choose a policy with no disease-wise sub-limits as it vastly reduces the scope of treatment you can get under the policy if you’re hospitalised for a specific illness.
4. Unlimited restoration perk: Restoration Benefit replenishes your sum insured after a claim, ensuring continued coverage under specific conditions. It can be triggered in two ways: partial exhaustion (triggered as soon as a claim is made) and complete exhaustion (kicks in when the sum insured is completely used up). Partial exhaustion is preferable, as it restores funds earlier. Apart from that, restoration can happen either once a year or an unlimited amount of times per year, with the latter being better for obvious reasons. Additionally, some policies restore the sum insured for any illness, while others do so only for different illnesses. The former is more beneficial, as it ensures coverage even if you're hospitalised for the same condition again. Understanding these clauses helps in choosing the right policy for uninterrupted protection.
5. Extensive Pre and post-hospitalisation coverage:  More often than not, a hospitalisation is preceded by a series of tests, check-ups, and even medication. Even after hospitalisation, there are costs that can pile up quickly. A good policy covers pre and post-hospitalisation costs for at least 60 days before hospitalisation and 90 days after hospitalisation.
6. Significant daycare coverage: Daycare treatments are treatments that require less than 24 hours of hospitalisation, such as dialysis, chemotherapy, etc. While most policies have provisions for daycare treatments, many others may not. It’s always best to get a policy that allows daycare treatments because they can get very expensive.
7. Optimum domiciliary coverage: Domiciliary Hospitalisation is when you receive treatment at home instead of in a hospital in case you cannot find a hospital bed in town, or you aren’t in a condition to be moved to a hospital. In order to get hospitalised at home, you must be hospitalised for 72 hours at least.
8. Substantial cumulative bonus: This is one of the most important features to have in a policy, as it can add a substantial amount of volume to your sum insured. Having a ‘no-claim bonus’ could potentially double or triple your base cover over the course of a few years.A no-claim bonus is a feature that increases your total coverage by adding a percentage to your base cover for every claim-free year, thereby boosting your coverage over time. However, it is important to keep in mind that the ‘clawback’ clause of this feature retracts your bonus by the same percentage in case you do make a claim. Nowadays, most comprehensive policies also offer renewal/loyalty bonuses where bonuses are not impacted by claims.
9. Considerable AYUSH coverage: AYUSH refers to traditional systems of medicine and is an acronym for Ayurveda, Yoga, Unani, Siddha, and Homeopathy. Although not a deal-breaker when it comes to choosing a policy, it is a nice feature to have in your policy if you’re inclined towards more alternative practices of medicine.

What are the top health insurance plans?

1. HDFC Ergo Optima Secure: HDFC ERGO Optima Secure is a comprehensive health insurance policy that includes preventive health checkups. The insurer ensures that every policyholder has access to annual preventive health checkups, aiding early detection and management of potential health issues.
   
   Additionally, Optima Secure offers unique features, such as doubling your base coverage amount right from day one through its Secure Benefit. Combined with good pre- and post-hospitalisation coverage of 60 & 180 days and no room rent restrictions.
2. Care Supreme: Care Supreme combines affordability with extensive wellness benefits, making it an excellent choice for both individuals and families. The policy includes annual health checkups as an add-on promoting regular monitoring and preventive care. Additionally, Care Supreme offers unique wellness incentives, such as discounted gym memberships, which encourage a healthy lifestyle.
   
   Care Supreme also has an unlimited restoration of the sum insured, no co-payment, and no disease-wise sub-limits. While the insurer’s complaint volume is slightly higher than some competitors, its affordability and wellness perks make it a compelling option for those seeking to combine good coverage with preventive care.
3. Aditya Birla Activ One Max: Aditya Birla Activ One Max is a health insurance policy that goes beyond traditional coverage by integrating wellness-focused benefits such as regular health checkups & gym memberships. These checkups are part of the insurer’s comprehensive wellness program, which includes the HealthReturns feature, where you can get up to a 100% discount on premiums for the following year, provided you are healthy. Policyholders earn rewards for maintaining an active lifestyle — tracked through wearable devices or fitness logs — which can be used to offset future premiums or other expenses.
   
   The policy also offers unlimited restoration of the base sum insured, no disease-wise sub-limits, and room rent flexibility, ensuring that you are not only incentivised to stay healthy but also well-protected during medical emergencies.
4. Niva Bupa ReAssure 2.0: Niva Bupa ReAssure 2.0 is designed to prioritise both treatment and prevention, with preventive health checkups included as a standard benefit. In addition to its wellness benefits, Niva Bupa ReAssure 2.0 includes innovative features such as ReAssure Forever, which ensures unlimited restoration of the sum insured for every claim once triggered. The policy’s Lock the Clock feature allows younger policyholders to lock in lower premiums until their first claim, further increasing its appeal. While the insurer’s metrics could see some improvement, the plan remains a strong choice for those looking for comprehensive coverage coupled with good wellness benefits.
5. ICICI Lombard Elevate: ICICI Lombard Elevate is an excellent health insurance policy on paper – it has unlimited coverage once in the policy’s lifetime, has a wide range of add-ons, global coverage and even has a surrogate cover. These can be particularly useful if your family is dealing with expensive medical treatments. However, it has limitations, such as a nominal renewal bonus and room rent restrictions on the base plan. All in all, this is a decent health insurance plan if you’re looking for cashless coverage for your family. However, it makes its mark as a comprehensive policy only when all of its add-ons are taken.

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Conclusion

A good health insurance plan ensures financial security, quality healthcare, and added benefits like tax savings and wellness perks. Choosing the right policy helps you stay protected and stress-free during medical emergencies. However, if you’re spoilt for choice and confused regarding the best option for you, you can always reach out to our advisors. We won’t charge a penny and only offer you genuine advice.