Know ‘Em All: The Different Types of Health Insurance Plans

So you’ve decided to buy a health insurance plan. What you must know is the types of health insurance plans today come in all shapes and sizes. While choosing your health insurance plan do pay attention to your requirements and the intention with which you are buying the plan.

Reimbursement (Indemnity) Based Health Insurance

One of the most popular types of health insurance plans in the market, reimbursement-based health insurance plans more commonly known as “Mediclaim”. These plans reimburse you for any expenses incurred in the event of hospitalization and also cover expenses associated with diagnostic or screening requirements before hospitalization or post-hospitalization treatments. The plan will have an annual limit that cannot be exceeded in a given year and which is renewed every year you pay your premiums. The plan can be offered as a

Individual Policy

In this case, the chosen sum insured under the policy would apply to the individual insured member only.

Family Floater Policies

In these policies the chosen sum insured is shared by all family members, thereby sharing the risk among all members. 

The choice of an individual or a family floater would depend upon the age of insured members, constituent members of the family, as well as the amount of coverage required As a rule the premium for individual policies, are dependent on the age of all members while the premium of a family floater depends upon the age of the eldest member.

Who offers them

Today every company offering health insurance does offer this plan type some of the popular plans are Easy Health and Optima Restore from Apollo Munich, Heartbeat from Max Bupa, Health Guard from Bajaj Allianz, Family Optima from ICICI Lombard, Mediclaim form PSU’s (Oriental India, United India National insurance), Mediclassic and Family Health Optima from Star Health, etc 

Who should buy

These plans are the base plan that must be a part of any health insurance coverage and should be the plan purchased in absence of any other health insurance coverage. It is most apparent that although less frequent most high impact and major health expenses are incurred in the event of hospitalization due to costs associated with inpatient treatment and associated expenses.

So in a nutshell these plans should be bought by anyone not having any current coverage

Variants 

Of late there have been some variants to the reimbursement hospitalization insurance plans designed to suit particular needs, some of them are

Read our article about the right health insurance for your parents

High Deductible Health Insurance Plan

This health insurance provides coverage only post a certain rupee value i.e. post your medical expenses crossing a threshold value. The plan is so designed to allow customers an easy and cheap option to enhance their current coverage especially to take care of those rare instances wherein either due to health catastrophes or multiple hospitalizations may cause your current coverage to exhaust itself. The advantage of these plans is that they allow an individual to increase the or add on to their current coverage with a minimal cost; 

These plans are of two types

Catastrophic high deductible health insurance plans

This variant of the high deductible plan covers you if the health expenses incurred in a single event of hospitalization cross a given threshold value. For example, if your coverage offers you a sum insured of 5 lacs with a deductible of 3 lacs, in case of a single event of hospitalization crossing 3 lacs you will be eligible for further coverage up to 5 lacs.

Who offers them

Optima Plus from Apollo Munich, Super Surplus from Star Health, United India’s topup, Bajaj Allianz’s Extra Care, Bharti Axa Smart Health High Deductible,

Aggregate high deductible health insurance plans

This variant of the high deductible plan covers you if the health expenses incurred in a given year of hospitalization cross a given threshold value. For example, if your coverage offers you a sum insured of 5 lacs with a deductible of 3 lacs, in case of all hospitalizations in a given year crossing 3 lacs you will be eligible for further coverage up to 5 lacs.

Who offers them

United India’s Super topup

Who should buy

These plans are specifically suited if you already have some kind of base coverage and are looking to enhance your current coverage, these plans are also suited for those who have some initial coverage provided for by their employer and would like to secure themselves in case their health expenses cross-coverage provided by their insurer in a given year.

Fixed-Benefit Hospitalization Plans

A new breed of health insurance plan first offered by Life Insurance companies and later offered by all insurance companies, these plans offer fixed benefit payouts on the occurrence of some well-defined diseases/illnesses or hospitalization occurring. These plans attempt to partly cover costs associated with hospitalizations and act as an income substitute in some cases.

The biggest advantage of these plans is that they offer coverage or payout even if you have claimed from any other types of health insurance plans (you can consider it as an additional payout for the same illness).

 However, one must always consider these plans as a topup or add on cover to your current plan and never mistake these for complete solutions due to the following reasons

• As the payout is not related to your actual health expenses incurred it may be lower or higher than the actual cost
• As the coverage is offered for set of defined benefits it may or may not cover all the illnesses or diseases

Variants 

• The variants to the fixed benefits hospitalization insurance plans include 

Critical Illness Plans

These plans offer a fixed lump sum benefit in case of a critical illness occurring, the critical illness or disease covered would be as the list defined under the plan. Today critical illness plans to cover 6 t0 39 critical illnesses depending upon the product offering them. The lumpsum benefit offered by this plan covers the cost and acts as an income supplement or takes care of out-of-hospital treatment.

Who offers them

Bajaj Allianz General Insurance’s Critical Illness, ICICI Lombard Insurance’s Critical Care, Tata AIG General Insurance’s Criti Care, HDFC Ergo Insurance’s Critical Illness, Bharti AXA General Insurance’s Smart Health Critical Illness

Hospital Cash/Surgical Benefit Plans

These plans offer fixed payouts in case of defined hospitalization events which may include admittance to the hospital, daily stay, a recuperating benefit in case of prolonged stay, and also lumpsum payouts for a listed surgery. As the payout is a defined payout depending upon the listed event occurring the plan accepts copies of bills.

Who should buy

All such plans, be it critical illness plans or fixed benefit hospitalization plans are top-up plans or add-on plans which can be used to supplement your base coverage and in no way substitutes the need for a reimbursement-based hospitalization insurance plan. Hence this plan should be bought by someone who would like to enhance his current coverage and would like to provision oneself for expenses not covered by reimbursement-based hospitalization insurance or intangible expenses such as loss of income or chronic care.