Types Of Health Insurance Plans Available In India

Mini Balakrishnan

• August 20, 2024
• 10 min read
• Health Insurance

Imagine you or one of your family members getting sick and being taken to hospital for treatment and you end up paying huge amounts of hospital bills and other expenses that results in complete draining of your bank balance. Quite disheartening isn’t it ? This is where a health insurance plan comes into your life as a saviour.

Major Types Of Health Insurance Plans

The tremendous increase in better healthcare needs of people being met by them, it has become almost unavoidable to get a health insurance plan for oneself. Health insurance plans ensure to provide help to the person insured by covering the financial burden that might arise out of any accidental hospitalisation or illness.

There are several types of health insurance plans in India. Buying a particular type of health insurance plan for yourself and your family will be very easy if you look at it in the right direction and understand the offers provided by it. Let’s look at the different types of health insurance plans available in India.

The two major types of health insurance policies are:

1. Indemnity Policy 
2. Defined- Benefit Plan

Indemnity Health Insurance is further subdivided into five different categories

• Mediclaim Insurance 
• Individual Insurance 
• Family Floater Insurance 
• Senior Citizen Insurance 
• Unit Linked Health Insurance 

Let us look at the subcategories of Indemnity Insurance one by one in detail.

Indemnity Insurance

1. Medical Insurance Cover

Also known as Mediclaim insurance covers your hospital expenses incurred because of an accidental hospitalisation or an illness. This included inpatient charges that include nursing charges, surgery expenses, doctor’s fees, anesthesia, oxygen supply, etc. The insurance market offers Mediclaim policies in three different types. 

• Group mediclaim
• Individual mediclaim
• Overseas mediclaim etc

2. Individual Health Insurance Policy

This insurance policy is applicable only for an individual or for only one person who is the member of the policy. The insured alone is eligible to receive any amount from the insurance company due to his/her hospitalisation. The insured gets an individual sum insured under this policy.

3. Family Floater Insurance Cover

This insurance policy is meant for the whole family under a single plan. The sum insured provided by the insurance company is divided among the family members mentioned in the policy. The premium is comparatively lesser in this type of cover than the individual health insurance or mediclaim health insurance.

4. Senior Citizen Health Insurance 

This health insurance is meant for the elderly who are above the age of 60 years old. The policy covers medical expenses spent for senior citizens. There are many other benefits other than offering normal coverage for seniors, like preventive checkup facilities, and cashless hospitalisation at the network hospitals of the insurance company, it also covers certain pre-existing diseases, critical illnesses, etc.

5. Unit Linked Health Insurance Plans (ULIPs)

The Unit linked plans are also used as an investment plan along with the insurance cover. It has dual functions for the insured. Here a portion of the premium paid is used in the stock market as an investment and along with it, health insurance coverage is also given. The insured can get returns from the investments but it depends on the performance of the stock market.

Defined- Benefit Insurance

Defined- Benefit Insurance Plans are the second major category of health insurance plans in India. In this, the insured is offered with a lump sum amount on the diagnosis of an illness. This includes three other subcategories

• Critical Illness Cover
• Personal Accident Cover
• Hospitalisation Cash Benefit Cover

1. Critical Illness Cover

The cover provides assistance on expenses incurred for treatment of a specific type of illness as listed under the policy wordings of the particular insurance company you are insured with. Critical illnesses are more like lifestyle diseases that are getting common with most people and hence the cover will be of great help to an extent for the person or his family as treatment charges will be very expensive.

As mentioned earlier it is a pre-decided lump sum amount paid to the person as agreed mutually depending on the illness diagnosed. The diseases normally covered under this type of policy are listed below.

• Cancer
• First heart attack
• Paralysis
• Primary pulmonary arterial hypertension
• Renal failure
• Stroke
• Multiple sclerosis
• Aorta graft surgery
• Major transplant of organs
• Bypass surgery of coronary artery

2. Personal Accident Cover

This insurance policy offers cover for the insured against any accidental injury or even death. Here also a lump sum amount is paid as the sum insured to him or to his family if the insured dies or a loss of income occurs due to the insured’s permanent partial or full disability that will make him unable to work.

3. Hospital Daily Cash Benefit Cover

As the name explains itself the insured will be given a daily cash allowance if he is hospitalised, apart from any other hospital expenses. This cash allowance has a certain limit and that depends on the type of cover you have chosen and the insurance company gets to decide on the same. Usually this cover is in-built under their normal health insurance policy.

Why Buy Health Insurance At A Young Age?

There are quite a few reasons that are important to note and that will make you want to buy a health insurance plan for you or your family as it is an unavoidable process with the high risk of health issues we all face. The major reasons are 

• Health insurance when bought very early comes with a lower premium as the insured will be young and the risk of health problems will be low.
• Health insurance is very easy to get at a young age because of low tests or valuations to be done due to low risk in health.
• Getting health insurance at an early age saves more tax benefits than a person buying the same at his/her middle age.
• When you opt for health insurance covers like the ULIPs the savings will be more and can be more beneficial.
• For a pre-existing illness to be covered there is a waiting period for most health insurance for getting it activated for coverage. Usually, the waiting period lasts for two to four years. But when you get health insurance at an early age there will not be any waiting period whatsoever. There will not be a normal initial waiting period of 30 days too. Direct access for coverage is available.
• Avail of maximum no-claim bonus (NCB) when you get health insurance at a very young age as the claim will be low at that time and your bonus will keep on adding.

Best Health Insurance Companies In India

There are more than 30 insurance companies in India that provide cost-effective and quality health insurance plans to people. Around 25 of them come under general insurance companies and 5 of them are private companies that are also called standalone health insurance companies. Each company’s approach is different and might suit the individual needs of the customers if they choose the right one.

Listed below are the top 10 health insurance companies in India in 2024 that are ranking from 1 to 10.

1. IFFCO Tokio General Insurance 
2. Care Health Insurance
3. Magma HDI Health Insurance
4. The Oriental Insurance Company
5. New India General Insurance
6. Bajaj Allianz General Insurance
7. Niva Bupa Health Insurance
8. Navi General Insurance
9. HDFC ERGO General Insurance
10. Manipal Cigna Health Insurance

Best and Cheapest Health Insurance Plans

The cheapest health insurance plans available in India for 2022 till date are

• HDFC ERGO Silver Smart Plan
• Universal Sompo Complete Health Care Individual Essential Plan
• Star Health Comprehensive Individual Plan

Even though you may opt for the cheapest and most affordable health insurance for you or your family it is better to keep in mind that cheap and best usually do not go together. For example, you may find insurance cover cheap and best affordable for you but that cover might lack certain important benefits that you may require the most. So even if the premium side is a bit higher than you expect it is highly recommended to buy the best ones that contain most of the benefits because after all, it is your health that matters and spending on your health’s protection and safety is better than ending up paying huge treatment expenses.

Factors to consider while choosing a health insurance policy

Having said all that, you must always consider certain factors before buying a health insurance policy from a particular insurance company. Some important points are listed below.

1. Always try to choose an insurance company that can afford to give you a maximum number of different health covers. That will make it easier to select the policy according to your particular requirements.
2. Check the number of cashless network hospitals for the insurance companies. The more the number is the easier you will be able to make claims no matter where you get hospitalised in case of emergency.
3. The insurance company must have the highest claim settlement ratio. So the person trying to insure will know if anything happens the company will settle the claims fast and smoothly.
4. Make sure the insurance company has a good customer support service available 24/7 that will make you access the company easier for any kind of policy-related queries.
5. The greater the business volume of the insurance company the greater customers they have. That means the customers rely on that particular insurance company with full satisfaction. And you may choose one such company.
6. Along with the claim settlement ratio the claim settlement process too should be about the company. This makes sure the customer would not get into a tough situation while making a claim.
7. Check for reviews from other customers about the service offered by the insurance company. The more positive reviews the more you can rely on the insurer.
8. Awards and recognitions are a major part of an insurance company and that will show you how respected the company is from various sources.
9. In this digital era where we live it is very important that the presence of insurance companies in the digital platform as more people are doing all transactions and queries etc through online and that definitely saves a lot of time.

Common FAQs

1. Am I allowed to buy more than one health insurance plan at the same time?

Of Course, you may buy as many health insurance plans as you like to meet your individual needs.

2. Will I be able to increase my sum insured on my already existing health insurance policy?

Yes, you will definitely be able to increase the sum insured in your existing health insurance policy and that can be done during the renewal of the same.

3. I was diagnosed with a medical condition after I bought my health insurance policy. Would that be covered by the existing policy?

As the medical condition is diagnosed after getting the insurance plan you may have to submit the reports to your insurance company and may have to wait till a certain waiting period as mentioned in their policy terms. Once the waiting period is over, you can get the condition covered as well if it is one among the listed medical conditions under the policy wordings of that particular insurance company.