With rising medical hospitalisation expenses health insurance has become a neccessity of life. Health insurance provides you financial protection from medical and surgical expenses in lieu of yearly premium.Premium in health insurance depends on the age of policy holder and past medical history.
Even if your covered by your employers group health insurance one should buy seperate policy for yourself and family.One has option to buy a individual mediclaim policy or family floater mediclaim policy.
What is Individual Mediclaim Policy
This type of policy provides medical cover for single individual. Indivdiual can claim hospitalisation expenses equal to sum insured in a particular year.
One can buy individual mediclaim insurance policy and convert it in future to family floater mediclaim policy.
What is Family floater Mediclaim Policy ?
This is policy covers more than one member of the family.It can include your spouse ,children, brother, sister, parents, sister in law, brother in law etc.
Hospitalisation expenses of all members covered by family floater policy cannot exceed the insurance limit of family floater policy.Premium for this policy will be lower than individual premium for each member added together and you will get higher medical insurance coverage. Even though this higher coverage is shared by all members of the floater policy, probability of all members requiring hospitalisation in a particular year is less
Premium in familly floater depends on the eldest member of the group.It means if you include your parents in the group then premium will depend on your parents age.In this case it makes sense to buy a separate health isnurance policy for you and your parents.
Income Tax Deduction Mediclaim Policy ?
Premium paid towards mediclaim policy can claimed for deduction from taxable income under section 80D of income tax act,Limit for deduction is as listed below
For self, spouse and dependent children one can claim maximum deduction of Rs.25000/-
For parents one can claim maximum deduction of Rs.25000/- , if parents are senior citizens then maximum deduction of Rs.30000/- can be claimed.
Important terms in health insurance policy
1.TPA: It is the third-party administrator which processes your insurance claims.
2.Cashless mediclaim policy: In this case the entire claim within the insurance policy limit is paid by the insurance company directly to hospital.One needs to check if the hospital in which treatment is being sought is in insurance company list of hospitals for cashless settlement.Cashless payment is processed through TPA.For items not covered in policy the expenses have to be bared by insured.
3.Sublimit on mediclaim: It is cap set by insurance company on medical expenses.Insurance company may set limit on room rent and medical treatment.
For example insurance company has sublimit of Rs 50,000 on kidney treatment and your actual treatment cost is Rs 60,000 , then balance Rs 10,000 has to be paid by policy holder.
4.Co-payment clause in mediclaim policy: In this clause certain percentage of claim amount has to be borne by policy holder.
For example if there is 20% co-payment clause and total hospital bill is Rs 50,000, then insurance company will only pay Rs 40,000 and balance 20%(Rs 10,000) has to be payed by policy holder.
5.Cumulative bonus in mediclaim policy:: For every claim free year, health insurance companies offer 5-10% bonus on sum insured.You can accumulate maximum 50% cumulative bonus.If claim is made in any particular year then cumulative bonus will reduce by 10%i on next renewal.
For example if you buy policy with insurance cover of Rs 1,00,000 and your health insurance provider has 5% cumulative bonus clause.If you do not make any claim in first then you will get bonus of Rs 5,000 and thus your health insurance cover will increase to Rs 1,05,000.