Medical insurance or ‘Mediclaim’ as it is commonly known in India provides financial cover to individuals for treatment of medical conditions, diseases and accidents.
Medical insurance is offered by non-life insurers (also known as health insurers) as well as life insurers.
Following are the two main categories of mediclaim:
1. Individual Mediclaim
The most basic form of Medical Insurance is the individual mediclaim. If there are four family members with individual covers of Rs 1 lakh each, each member can claim reimbursement for up to a maximum of Rs 1 lakh. Each individual mediclaim policy is capped at the sum assured which is the maximum the insured can claim towards treatment.
2. Family Floater Policy
The best family health insurance plans do away with the biggest shortcoming of the individual policy – the fixed sum assured. There is a floating sum assured for each member with a cap for the family as a whole. Going by the previous illustration – a family floater policy for Rs 4 lakhs allows any family member to claim medical benefit for more than Rs 1 lakh so long as it is within the overall sum assured of Rs 4 lakhs. This way if two family members need medical treatment in a year amounting to Rs 4 lakhs, the family floater with Rs 4 lakhs sum assured proves useful. With independent mediclaim the members would have been eligible only for Rs 2 lakhs benefit and would have had to fork out the balance Rs 2 lakhs on their own.
The amount paid towards medical insurance premium for self/spouse/children provides tax exemption under Section 80D for a maximum of Rs 25,000. There is an additional benefit of Rs 25,000 on mediclaim premium for parents (Rs 30,000 if parents are senior citizens).
3 Checklists Before Buying a Mediclaim Plan
If you haven’t bought a mediclaim policy and are planning to apply for the one, then it is highly recommended to check below points to make sure that you buy best policy. These factors can also be used to compare different insurance plan options available in the market.
1. Individual and family floater:
In individual plan, each individual is insured for a specific amount, whereas, in family floater, the whole family is insured for a fixed sum assured. In case of family floater, when the primary person dies or reaches a specific age, the policy is closed even other members who are still younger can’t renew the policy. In Individual plan, the individual is insured on separate parameters. The attainment of specific age will not impact insurance coverage of other family members.
2. Renewability age:
Although, policy offers coverage for one year only, but in reality, it is a relationship between you and the insurance company. So, your health Insurance policy should cover as you age because it is tough to get insurance at that age. If your policy doesn’t provide you coverage at that point of time then buying such a policy will not give peace of mind.
3. Pre-existing disease:
This is relevant only if you have a pre-existing disease at the time of taking insurance plan. It also covers those diseases which might arise from a pre-existing disease. For example, if you have diabetes at the time of taking the plan and later develop heart problem, then even the heart problem will be considered as a pre-existing disease. Almost all insurance companies have a clause that states that a pre-existing disease will be covered only if the plan has been renewed for a certain number of years. A best mediclaim insurance plan covers pre-existing diseases as soon as possible.