Benefits of Individual Health Insurance Policy

As per recent reports, healthcare inflation in India is growing at twice the rate of overall inflation. Due to this, people not just in their 40s and 50s, but even early 20s, have started understanding the importance of purchasing health insurance.

But while a family floater plan better suits someone in the 30s and 40s with a family, a single or individual health policy is ideal for unmarried people in their 20s. But what are individual health policies? How do they work? Should you consider purchasing one? Answers to all of these fundamental questions and more are discussed in this post. 

What is Single or Individual Health Insurance Policy?

While there are different types of health insurance plans available in India, they can be broadly divided into - family floater plans and individual plans. A family floater plan secures the health of a family, including spouses, dependent children, and dependent parents. There is a single sum assured, which is shared by all the members of the family. 

A single policy health insurance is the opposite of a family floater plan. As the name suggests, an individual health plan is purchased for an individual. The plan has a fixed sum insured, up to which, the insurer will cover the healthcare costs of the policyholder. 

Age of the policyholder, current health condition, medical history, and location are some of the factors that the insurers consider for calculating the premium of such individual plans. 

How Does a Single Health Insurance Policy Work?

When you purchase an individual health insurance, you get into an agreement with the insurer. The agreement states that the insurer will cover your healthcare costs to the extent of the sum insured, and as per the policy terms. In return, you must pay premium regularly. 

So, let us consider that you have purchased the best health insurance policy with a sum insured of Rs. 5 lakhs. After purchasing the policy if you are hospitalised, the insurer will be liable to pay the hospital bills as per the terms and conditions of the policy. 

Let us assume that the hospital bill was Rs. 2 lakhs. Your insurer will settle the bill with the hospital, and now your sum insured for the year will be reduced to Rs. 3 lakhs (total sum insured of Rs. 5 lakhs- the hospital bill of Rs. 2 lakhs paid by the insurer).

What is Generally Covered and Not Covered in an Individual Health Insurance Policy?

The inclusions and exclusions of an individual health plan will mostly depend on the type of policy and insurer you select. Here are the standard inclusions and exclusions list-

  • Inclusions-

⮚ Hospitalisation

⮚Pre and Post-Hospitalization

⮚ Day Care Procedures

⮚ Ambulance Costs

⮚ Domiciliary Treatment 

  • Exclusions-

⮚ Pre-Existing Conditions (up to 1-4 years depending upon the insurance company)

⮚ Dental, Hearing, and Vision-related Expenses

⮚ Cosmetic Surgery

⮚ Pregnancy and Related Conditions

⮚ Alternative Therapies

What are Different Types of Single Health Insurance Plans Available in India?

Single or individual health plans are further divided into different types of health insurance, which are:

  • Critical Illness Insurance

In case you have a family history of critical health problems, you can consider purchasing critical illness insurance, which covers a host of dangerous conditions. 

  • Senior Citizen Health Insurance

These plans are exclusively designed as per the healthcare needs of people above the age of 55 years. Several health problems that seniors are more prone to suffer from are covered in such policies. These plans can be purchased for anyone between 55 years and 80 years.

  • Personal Accident Insurance

Road accidents are quite common in India. If you frequently travel for personal or professional reasons, a personal accident insurance policy can be a great choice. Such plans are tailored to protect policyholders against accidents. The plans generally cover the hospitalisation and medical expenses of the policyholder in case of an accident.

What are the Pre-Existing Conditions in Single Health Insurance?

At the time of purchasing health insurance, you will be required to undergo a medical test. If you are already suffering from a medical condition such as diabetes, cancer, hypertension, etc. these will be known as your pre-existing health conditions. 

Most top insurers do not cover pre-existing health conditions for durations ranging from 2-4 years. This means that if you are hospitalised due to a pre-existing condition, the insurer will not cover the expenses for up to 2-4 years. Once the waiting period is over, your pre-existing conditions will be covered by your health policy.

How will the Insurer Pay Your Hospital Bills?

If you buy health insurance online and after a few months require hospitalisation, you need to file a claim with your insurer. This can be done in two ways- cashless claims or reimbursement claims. 

With cashless claims, the insurer will directly settle your medical bill with the hospital. In case of reimbursement claims, you are first required to pay the medical bills yourself and then get the amount reimbursed from your insurer. 

While the cashless facility is more convenient, it is only available at the network hospitals of the insurer. In non-network hospitals, you will be required to use the reimbursement facility. 

What is NCB or cumulative bonus in Health Insurance?

Just like you have No Claim Bonus or NCB in vehicle insurance, there is cumulative bonus in individual health insurance plans too. But the working of NCB in case of health insurance is different from that of vehicle insurance. In case of vehicle insurance, you receive a discount on renewal premium based on the number of claim-free years. 

In health insurance, the renewal premium is not reduced, but the sum insured of the policy is increased by a certain percentage for every claim-free year. However, there are a few insurance providers that follow the premium discount method for NCB in health insurance too.

For every claim-free year, the sum insured is increased by 5% to 10% based on the insurer you select. But note that insurers are not allowed to offer cumulative bonus of more than 50% irrespective of the total number of claim-free years of a policyholder.  

Are There Tax Benefits Available on Purchase of Individual Health Insurance?

Under Section 80D of the IT Act, you can claim a tax deduction of up to Rs. 25,000 on the premiums paid towards the health insurance policy. The limit is up to Rs. 50,000 for health insurance purchased for a senior citizen above the age of 60 years. 

So, in case if your age is below 60 years and you purchase an individual health plan for yourself along with a separate individual plan for your senior parent, you can claim a deduction of up to Rs. 75,000. Similarly, if both of your parents are above 60 years of age and you have paid for their health insurance, then you can claim tax benefit of up to Rs 1,00,000.

Individual Health Insurance: Affordable Way to Secure Your Health

The high cost of healthcare in India could significantly impact your finances in case if you suffer from a medical condition. A single or individual health insurance policy adds a layer of safety to your finances and ensures that you can receive quality medical care when required.

Get in touch with a top insurer to know more about individual health plans and secure your health today.

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