Insurance is GOOD!
It’s good for You, and it’s good for us, too.
And it’s good for every everyone else.
That’s why we thought it’d be a good idea to answer some basic and some not so basic questions that you might have when you decide to buy your first insurance plan. And in case that happens to be health insurance, we got your back!
What this guide covers?
- What is health insurance?
- Why should you buy health insurance?
- How does health insurance work?
- How to choose a health insurance plan?
- Benefits of health insurance!
- How to buy health insurance?
- Can you afford health insurance?
- Do you lose money if you don’t get sick?
- Different kinds of health insurance?
- ABCs of health insurance
This guide will help you in answering all your questions about buying health insurance. What is health insurance? How to buy one? Why buy a health insurance plan? What are the types of health insurance? Would I lose money if I don’t get sick? These are all good questions, and not knowing the answers should not discourage you from buying a health insurance plan.
Before you buy your first policy, we want to give you as much information as possible about health insurance. Hence this guide.
Let’s start with the basic first!
What is health insurance?
The key to understanding health insurance lies in a metaphor. For example, you must keep a life jacket handy while being on a boat. You may end up never using one but putting it on will prepare you for facing the uncertainties. And that’s exactly what a health insurance plan does for you. It prepares you to face any medical uncertainty that otherwise might have dug a deep hole in your pocket.
It’s a regular payment, annually or monthly, towards a policy so that if there is an accident or illness, you will be financially compensated against the treatment cost.
Depending upon the policy that you choose, you will either be reimbursed for your expenses or your insurer will directly pay the medical bills. In either case, you won’t have to compromise on your medical care.
Why should you buy health insurance?
Paying the health insurance premium is a very small price to protect you in the event of an accident or health-related hospitalization. We all know people who have been in a hospital recently, yet we all think “Why should I get health insurance?”
The answer is very simple: if anything ever happens to you or your family, you won’t have time for organizing large sums of money to get the best medical care. Worrying about money should be the last thing on your mind.
Getting the best medical care, as soon as possible, will guarantee the best health outcome for you and your family. This is only possible if you’ve already taken care of medical costs by having a health insurance policy.
Having a dependable health insurance policy from a trusted insurer will free up your mind from worrying about trivial matters.
Now, if you already have some pre-existing conditions or you are facing some symptoms, you must declare those to your insurer before you buy health insurance. In most cases, these will be covered after a certain time. And if you have any questions or doubts about your insurance policy covering your pre-existing conditions, feel free to discuss these with your insurer.
You should be completely sure and have all your questions answered before you sign those papers!
P.S. Toffee has made insurance sweeter. Zero paperwork, superfast sign-up!
How does health insurance work?
Health insurance helps you in receiving the best possible medical care at the lowest possible cost. In case of an illness or accident, it pays for your medical bills, hospital stays, doctor visits and other necessary preventative care.
Every insurer, and even every policy, is different. You should choose the one which is best suited for your personal needs.
There is a lot of jargon and industry terminology that you must wade through when you’re buying a health insurance policy. But, at Toffee, we’ve kept it simple: if something happens to you that you could not have predicted and you end up in a hospital, then chances are that you’re covered. Still, there are some important things that, we think, you should know about:
- Pre-existing conditions are health conditions that you’ve had before purchasing your health insurance policy. Many policies have a waiting period for covering pre-existing conditions. That means your expenses for any treatments that have to do with pre-existing conditions will not be covered for that period.
- Sum insured is the total amount that you are covered for. In some policies, if you spend the sum insured, it is automatically restored if you are hospitalized again for the same disease within a specified period.
- Claim is the payment that the health insurance company will make, either directly to the hospital (cashless claims) or in reimbursement to you upon filing the appropriate reports and receipts.
- Deductible is the amount that the policyholder may have to pay from their own pocket whenever they file certain claims.
How to choose a health insurance plan?
Choosing a health insurance plan for yourself can be mentally tiring for a lot of people. And if you are young and buying your first policy – May Toffee Save You! (Pun intended, self-promotion)
You don’t know which insurer is good, what kind of plan to buy, how much should you pay, what’s the right premium for you, etc. etc.
And this is that stage where most of you would get discouraged, your initial motivation to buy a health plan would come down, and then you would move on with your busy life.
As if life wasn’t hard enough already, buying a health insurance plan shouldn’t be!
That is why, at Toffee, we have simplified the process of buying insurance. You don’t need to compare multiple policies, calculate EMIs, and talk to agents after agents. It’s quick, no need to talk to agents, no lengthy forms! From buying a policy to paying your small monthly payments, you have all the freedom.
Benefits of health insurance!
The short answer is: having a health insurance plan makes your life easier.
Now, there are many ways in which having a health plan helps you, and below, we have mentioned some of them, but the essence of all of them is very simple: in case something happens to you, an illness or an accident, all your focus and energy must be devoted to getting the best possible medical care.
A health plan or health insurance is designed to minimize your out of pocket health expenditure. Here are a few other reasons why you should, must, buy health insurance:
- Buying health insurance when you are young and just starting your career can turn out to be one of the best decisions of your life. From the moment you buy a plan, you will start feeling safer and more independent. And since you are young and healthy, you will enjoy better health deals and almost no rejection of your claims.
- You can save some money which otherwise would have gone to the government as tax. You can claim tax deductions basis your annual insurance premium. There are different limits for people in different age groups, income slabs, and a few other variations. That’s why, you should always check with your chartered accountant before you claim your tax deductions.
How to buy health insurance?
Traditionally, if you wanted to buy a health insurance plan, you would need to contact an agent. The agent would visit you at your home or office and try his best to explain the benefits, different payment options, would compare plans with different companies, and in the end, you would have to fill out a lengthy form and sign at thousand places. By the time you are finished, you would have no idea of what just happened!
And that’s why we started Toffee Insurance! We bring to you: The Toffee Plan. One simple plan that not only covers health insurance, but also covers life and household. It’s the only insurance plan that you’ll ever need. Our purchasing process is headache-free and fast, you also get to pay for it in small monthly payments, much like a streaming subscription service.
We’ve chosen the best plan in each category from the biggest insurance heavyweights in the industry, so it takes the thinking out. Also, Toffee Insurance will help make the claims process the smoothest and fastest in its class – getting you your money in the bank in record time with a super high claim approval rate and super low time to get the money to you.
Just go to toffeeinsurance.com, follow the process and buy insurance coverage for your family in the same amount of time it would take you to finish the initial conversation with an insurance agent!
Can you afford health insurance?
If you can afford to eat out at a restaurant or go to the movies once a month, then you can afford health insurance, too. In fact, complete coverage for you and your family! With insurance starting at simply Rs 600 per month, Toffee Insurance is committed to providing affordable health insurance for all!
But still, let’s talk about the scenario where you truly can’t afford health insurance. This would be a problem because studies have shown that people who don’t have health insurance tend to go for substandard care or to delay critical treatments and have considerably worse health outcomes. You don’t want a loved family member to have to wait for treatment until you can come up with the money. Talk to your employer about getting health insurance for you as part of your package. After all, worse health for you is a big blow to your employer as well!
Do you lose your money if you don’t get sick?
This is like asking why to wear a seat belt when I have never had any car accident.
The cost of an accident is so high, if it ever happens, and the effort to wear a seatbelt is so low, that you must always wear a seat belt. Similarly, the cost of not having health insurance is so high, and the cost of buying is as cheap as, say a subscription to a movie streaming service, that it’s financially wise and good common sense to always have a health insurance policy.
Also, many studies have found that people who don’t have health insurance are more likely to get substandard care or delay an essential treatment due to lack of funds, which will make your health outcome a lot worse.
What are the Different Kinds of Health Insurance: Private and Government
It is important to know about various government insurance schemes. In this, we’ll talk about the most important, biggest government step to health coverage for the poor called Ayushman Bharat.
The insurance component of Ayushman Bharat is called the Pradhan Mantri Jan Arogya Yojana (PM-JAY). The PM-JAY is a health insurance scheme that offers a health cover of Rs. 5 lakhs per family annually. To subscribe to it, you would have to be under the poverty line and pay Rs. 30. Ayushman Bharat PM-JAY is the largest health assurance scheme in the world which aims at providing a health cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitalization to over 10.74 crores poor and vulnerable families (approximately 50 crore beneficiaries) that form the bottom 40% of the Indian population. It provides cashless access to hospitalization, covers 3 days pre-hospitalization and 15 days post-hospitalization care as well covering all pre-existing diseases from the very first day.
For people who can afford to buy private health insurance, the market is flooded with options. Choosing a policy is a matter of your requirements and purchasing power. In India, there are more than 30 non-life active insurers in the market. They sell everything from personal health plans to family health packages.
We hope now that you have found this tool, which we all call insurance, you will use it for making your life more meaningful, healthier, and happier. More yeses, than nos, and taking more risks.
We’ll consider our job done if we can point a bunch of you in the right direction.
Yours truly, Toffee Insurance!
Let’s be honest now. There aren’t many of you who would bother to read a glossary of health insurance definitions.
But in case if you want to, here’s everything you ever wanted to know about health insurance.
Health insurance definitions
Accumulation Period – It is the time frame after purchasing the policy during which no claim can be made to health insurance under the policy (except accidental cases). The accumulation period is usually 30 days from the day of health policy purchase.
Acute Care – Anytime a policyholder or beneficiary receives a particular medical treatment or care at a hospital or clinic, it is called acute care. This is usually temporary not continuous or chronic.
Agent – An agent is an intermediary or go-between that connects consumers with insurance providers. Agents would be the ones having direct contact with customers regarding the healthcare policy. Agents help you understand the various features and benefits related to your insurance policy. Moreover, they can also assist in filing and processing your health insurance application forms. Agents will help you understand the policy with its jargon and terminology.
Age Limit – Every health insurance plan comes with a minimum and maximum age limits. Only those policyholders who fall within the determined age range can apply for that health insurance policy.
Any One Illness – A continuous period of illness. This may include a relapse of the same illness within 45 days of the last consultation.
Area Covered – Your health insurance plan covers you in certain locations. Some plans offer coverage only within India, while others may also provide financial assistance for medical emergencies abroad.
Ambulance Cover – Some health insurance policies do cover the cost of transporting the policyholder to the hospital in an ambulance. Such additional charges related to hospitalization can put a huge dent in your pockets if your insurance policy fails to offer coverage for it.
AYUSH – Today, some individuals also seek alternate forms of therapy. Ayurveda and Homoeopathy are considered alternate treatments. Collectively, they are known as AYUSH – Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy. Some health insurance policies also offer coverage for expenses incurred due to hospitalization for seeking such treatment under the AYUSH add-on cover.
Beneficiary – This health insurance terminology refers to an individual or entity that has been named in the policy as the insurance benefit recipient. This can be a person named in a family health insurance policy (who is not the policyholder) or the person who will receive the life insurance benefit on the event of the policyholder’s death.
Bodily Injury – Bodily injury is a term in health insurance that refers to any physical harm that you can be subjected to due to unforeseen, unexpected, violent and visible means.
Broker – A health insurance broker is a third-party individual or company who will deal with the insurance provider on your behalf. The broker is not employed by the insurance company, unlike an agent.
Cancer Insurance – Cancer insurance is a policy that you can purchase if you want financial security when you are diagnosed with cancer. The costs involved with the treatment of cancer can be steep and this policy will either cover the costs or give you a lump sum upon diagnosis. You can now purchase a cancer insurance plan as a standalone policy or as an add-on to an existing healthcare cover.
Claim – A claim is a financial benefit that you receive from your health insurance policy that covers your costs during a healthcare emergency or hospitalization.
Claim Settlement – Claim settlement is the process in which you would receive money from the insurer for an occurrence specified in your contract, aka your policy. The insurance provider generally has two options for your claim settlement. One, the reimbursement process: where you pay for the treatment and file for reimbursement of the expense at a later date. Two, a cashless claims process: where the insurance company directly settles your medical bills with the network hospital.
Claim Settlement Ratio – Claim settlement ratio is the number of claims that an insurance company settles in a year against the total number of claims. Comparing the claim settlement ratio is crucial before selecting your insurer. It reveals whether your insurance provider is likely to settle claims easily or not. It reduces the risk of claim rejection.
Certificate of Insurance – It is also known as the policy underwriting, this basically refers to the contract paper that lists down the inclusions, exclusions and cash limit for your health insurance plan. Each provider has separate terms and conditions. You must read this certificate carefully to understand all the features and benefits of your health cover.
Co-payment – It is a portion of the claim amount that the policyholder needs to pay out of her pocket while the rest is covered by the insurance provider. Therefore, the expense incurred during medical treatment is divided between the policyholder and the insurer. Plans with a co-payment clause mention this liability as a percentage. Before you opt for a co-payment policy, understand the financial liability that such a plan puts you through in case of a medical emergency.
Complimentary Health Check-ups – Health insurance companies also provide free yearly check-ups to policyholders as a perk or incentive for renewing their health insurance plans. Some plans cover costs for full-body check-ups, while others allow the insured to opt for free of cost medical tests.
Co-insurance – Co-insurance is the fixed percentage of treatment costs that the policyholder must bear out of his/her own pockets, while the rest is covered by their health insurance policy. Co-insurance can be of two types – compulsory and voluntary co-insurance and usually increase the payment liability of policyholders while raising claims.
Cumulative Bonus – It’s the bonus your health insurance plan accumulates over successive claim-free terms. For example, if one-claim free year results in an increase of the sum insured linked to the plan by 5%, and you experience 5 successive claim-free years in a row, your accumulated bonus is 25%.
Critical Illness – Any severe, life-threatening, fatal, or chronic medical condition requiring substantial medical assistance is termed as a critical illness. Standard health insurance policies do not offer enough financial protection against such conditions. That’s why insurance providers offer an additional safeguard in the form of standalone or riders. You can avail the critical illness benefit for complete protection.
Daycare Procedures – Daycare treatment is a procedure that requires hospital or clinic admission. But the admission does not last for more than 24 hours, thereby disqualifying it from traditional healthcare coverage. Treatments like chemotherapy, angiography, dialysis, etc. Come under day care procedures. Only the health insurance plans that cover daycare treatments reimburse you for the expenses.
Deductible – This is the fixed amount of medical expenses that a policyholder needs to pay each year to file a claim with the insurance provider successfully. Keep in mind that deductible refers to a fixed amount and not a percentage of the total expenses. Suppose your deductible amount is Rs. 10,000 per year. In such case, you can only claim the policy benefits after you have paid the deductible amount (Rs. 10,000), in any given year for your medical treatments.
Dependents – Some health insurance plans do not restrict coverage to only policyholders. Instead, they extend the protection to policyholder’s spouse, children and, in some cases, dependent parents also. These additional individuals, eligible for protection under the policy, are known as dependents.
Domiciliary Hospitalization – A medical treatment received at home by the policyholder is termed as domiciliary treatment. In such cases, the patient cannot be taken to the hospital due to their inability to leave the house.
Exclusions – Any disease, condition or medical treatment that is not covered by your insurance policy is called exclusions. Do not forget to check the exclusions when opting for a health insurance policy. The list usually differs from one insurance provider to another.
Emergency Care – Any medical treatment that is required immediately due to unforeseen emergencies falls under the purview of emergency care. Generally, such conditions involve severe and serious injuries or illnesses, where delayed treatment can result in complications or even death of the patient.
Group Health Insurance – Group health insurance policies offer coverage to the employees of an organisation. These policies usually come at a lower cost than that of individual policies since the risk of the insurance provider is spread across a group of policyholders.
Health Insurance Tax Benefits – Health insurance policyholders are liable to receive certain tax exemptions as per Section 80D of the Income Tax Act, 1988. The exact tax deduction depends on three factors: your age, insurance premium, and type of policy (individual/family). Senior citizens receive greater tax exemptions under this Section.
Insurer – Insurer refers to an insurance providing company that provides financial assistance for the medical expenses incurred by their policyholder.
No-Claim Bonus – It’s the benefit that is provided by insurers to policyholders for every non-claim year. With this, policyholders can enjoy a higher sum assured at the same premium in the consecutive succeeding year.
Outpatient Department Treatment (OPD) – If the insured individual visits a clinic or healthcare centre for diagnosis and treatment, without opting for hospital admission, it is known as OPD treatment.
Premium – The amount every policyholder must pay to the insurance provider to avail the health insurance coverage. Generally, charged every year, such insurance-related payments are known as premium.
Personal Accident Policy – Plans that only come into effect when the insured suffers from a serious accident. To raise claims against such a policy, the beneficiaries must meet certain prerequisites. For example, most personal accident plans offer a fixed payout in case of permanent disability or death.
Policy Coverage – It defines what is covered and what is excluded from the policy. Policyholders can only avail such benefits that are included under the policy coverage.
Policy Period – It’s the tenure for which the policy coverage is valid.
Pre-existing Disease – Any disease or health condition that the policyholder suffers from at the time of buying a health insurance policy.
Riders – Riders, also known as add-ons, refer to additional protection that policyholders can avail from their health insurance provider. You need to pay an additional premium to incorporate coverage for these.
Renewal – A process through which a policyholder can prevent the expiry of their existing health insurance policy. Once expired, the benefits offered under the policy lapse and the insurer is not liable to pay for that time. To renew, you simply need to pay the yearly premium once again to keep availing the benefits, before the policy expires.
Reimbursement – If you decide to seek treatment at a non-network hospital (a hospital not mentioned in your insurance policy), at first, you will need to pay the medical bills from your pocket. Later, you can file a claim with your insurer to receive the money you spent on your treatment.
Sum Insured – The maximum financial coverage offered under the policy in a year. It reflects the true value of your policy. The policyholder can decide the coverage amount while signing up for the policy. The premium payable for the policy is decided based on the sum insured.
We really hope that we were able to answer some of your questions regarding what is health insurance, what are different types of health insurance, and when should you get one.
We would love to hear from you. Tell us if we missed anything or there is something you want to know more about!
Write to us at firstname.lastname@example.org.