Mediclaim Policy in India

In this day and age, health insurance has become one of the utmost requirements for securing one’s financial well being. Though awareness about medical insurance has increased in the recent years, the overall insurance penetration in India is still on the lower side. It is expected that medical inflation in India is all set to increase at the rate of 15 to 20% every year. Considering the surging expenses, it is wise to have a mediclaim policy that offers comprehensive coverage against various illnesses.

What is mediclaim?

Mediclaim is a type of health insurance product that offers protection against various hospitalisation expenses incurred by the insured. In India, mediclaim policy benefits are offered either as reimbursement benefits or cashless treatment benefits. One of the things that must be noted in mediclaim is that it pays only for the actual hospitalisation or domiciliary hospitalisation expenses incurred by the insured person.

To gain a full understanding of how mediclaim policies work in India, it is necessary to understand the terms commonly used in the health insurance industry.

• Sum insured: This refers to the maximum coverage amount that is available for the policyholder and his/her family. Most insurers in the market offer flexible sum insured options based on the requirements of their customers.
• Premiums: Premium refers to the money payable by the insured person for the coverage offered by a health insurance company. Premium amount is charged for a specific period (1 or 2 years) as chosen by the insured.
• Policy term: This refers to the period during which a mediclaim policy remains active. A policy must be renewed before expiry for continuation. The most common policy term is 1 year. However, some health insurers offer policy term up to 3 years.
• Critical illness: A critical illness refers to any major life-threatening illness that requires extensive hospitalisation and care.
• Tax benefit: In a mediclaim policy, the premium amount paid for the coverage is eligible for income tax relief as per Section 80D of the Income Tax Act.

Who provides mediclaim policies?

In India, there are about 29 non-life insurance companies in the market. Most of them in the list are general insurance companies that offer a wide range of insurance services in various domains such as health, travel, motor, home, personal accident, etc. Mediclaim policies are offered by almost all general insurance companies in the country. In addition to the general insurers, there are standalone health insurance companies that are exclusively licensed to provide insurance service in health, travel, and personal accident domains.

Public sector general insurance companies in India:

• National Insurance Company
• Oriental Insurance Company
• New India Assurance
• United India Insurance

All these companies have different varieties of health insurance plans.

Standalone health insurance companies in India

The 5 standalone health insurance companies operating in India can be listed as follows:

• Care Health Insurance
• Max Bupa Health Insurance
• Apollo Munich Health Insurance
• Star Health and Allied Insurance
• Cigna TTK Health Insurance

In addition to the public sector companies and standalone service providers, we have an array of private sector general insurance companies providing service in the Indian market. Some of the top players in the market include HDFC ERGO, ICICI Lombard, Bharti Axa, IFFCO Tokio, Future Generali,Royal Sundaram, Reliance General, etc.

Difference between mediclaim and health insurance

Though the terms mediclaim and health insurance are used interchangeably by the general public, industry experts say that there is a subtle difference between the two. Health insurance is a much broader term that covers a range of insurance products intended to provide coverage against health issues and ailments. Mediclaim, on the other hand, is limited to the coverage intended for actual medical expenses incurred by the policyholders.

Health insurance	Mediclaim
This is a broader term that comprises all kinds of products included in the ambit. This also includes benefit products that provide the full sum insured money upon the occurrence of an event that may give rise to a claim.	Mediclaim focuses mainly on indemnity policies that offer coverage against various hospitalisation expenses. The actual hospitalisation expenses incurred by policyholders are covered in mediclaim policies.
Health insurance is also available for eventualities that do not require hospitalisation.	Mediclaim requires hospitalisation of the policyholder in order to provide coverage.
A critical illness policy that pays the full sum insured amount to the policyholder upon the first diagnosis is also a type of health insurance.	Mediclaim policies do not have any provision in which the full sum insured amount is paid to the policyholder.

In a mediclaim policy, the policyholder can make any number of claims till the full sum insured amount is exhausted within a particular policy term.

Types of mediclaim policies in India

Mediclaim policies are available to customers in different forms. The flexible nature of these policies allow customers to choose one based on his/her specific requirements. Some of the common types of mediclaim policies can be listed as follows:

• Individual plans - An individual policy is something that you take to protect yourself from various hospitalisation expenses.
• Family floater plans - A family floater cover allows you to enroll your whole family in a single policy. The sum insured amount opted in this policy is available for the whole family, and it can be used by anyone during the time of need. Most insurers provide family floater cover for the primary policyholder, spouse, dependent children, dependent parents, etc.
• Group policies - As the name implies, group policies can be taken by members belonging to a particular group. These policies are typically taken by employers to provide medical insurance coverage for their employees.
• Senior citizen policies - These are policies designed exclusively for senior citizens in the country. Senior citizen covers are relatively new to the industry, and there are not many companies that offer this kind of coverage.
• Overseas mediclaim - Some insurance in the market provide global coverage for certain illnesses. These insurance companies have overseas tie-ups with many partners. This allows them to provide overseas coverage in various international facilities.
• Critical illness mediclaim - While most critical illness covers pay a lump sum amount following the diagnosis of an illness, there are critical illness mediclaim policies that provide coverage for hospitalisation expenses up to the maximum sum insured limit. Nowadays, many policies are developed in a such a way that critical illness coverage is already inbuilt in a regular health insurance policy.

What does a mediclaim policy cover?

A medical insurance policy provides coverage against a range of expenses incurred by the insured. Some of the major medical expenses covered by a mediclaim policy can be given as follows:

Expenses covered	Extent of coverage
In-patient hospitalisation expenses	All mediclaim policies provide full coverage up to the maximum sum insured limit. Medical expenses including room boarding charges, medical practitioner’s fees, cost of medicines, etc. are covered under this policy.
Day care treatment	Most insurers provide coverage for day care procedures like chemotherapy, dialysis, etc. that do not require 24-hour hospitalisation. The list of procedures covered under the day care treatment are usually provided in the policy document.
Domiciliary hospitalisation	For policyholders who cannot visit a hospital for treatment, domiciliary hospitalisation expenses are covered for a specific period of time. Sum insurers have sublimits for domiciliary hospitalisation.
Pre and post hospitalisation expenses	Almost all major insurance companies provide coverage for the pre and post hospitalisation expenses incurred by a policyholder. The coverage will be extended only for a specific number of days (e.g. 30 days or 60 days). Expenses incurred only for the primary reason of hospitalisation are covered in this benefit.
Ambulance charges	Most insurance companies operating in the market have provisions for covering the ambulance charges up to the specified sub limit.
Daily cash allowance	Some insurers provide this as an add-on cover, and some provide this under a regular policy. It offers a specified cash allowance for the non-medical expenses incurred during a hospital stay.
Health checkup	If policyholders do not make any claim for a specified period of time, the insurance companies offer free health checkup for a certain amount.

What expenses are not covered by a mediclaim policy?

There are certain expenses for which a mediclaim policy cannot be held liable to provide coverage. The most common exclusions listed out by mediclaim companies are as follows:

• Any non-medical expenses incurred during the time of hospital stay will not be covered under a mediclaim policy. This may include expenses related to food, transportation, personal comfort, etc.
• All pre-existing conditions will not be covered immediately under a mediclaim policy. Usually, there is a specific waiting period (2 to 4 years) before coverage is available for pre-existing conditions.
• Any illnesses contracted within the first 30 days of the commencement of the policy cover will not be covered by a mediclaim policy. However, this waiting period will not apply for hospitalisation following an accident.
• A mediclaim policy will not provide coverage for any kinds of injuries or illnesses contracted due to war, invasion, war-like activities, bioweapon attack, chemical warfare, nuclear activity, radiation, etc.
• Self-inflicted injuries and suicide attempts will not be covered by a mediclaim policy.
• A mediclaim policy will not reimburse the expenses related to various medical accessories like spectacles, contact lens, hearing aids, crutches, etc.
• Any kinds of sexually transmitted diseases including HIV, AIDs, and venereal diseases will not be covered by this policy.
• Dental treatment and surgery costs will not be covered by a mediclaim policy unless it is necessitated by an accident.
• Expenses related to maternity, childbirth, pregnancy, and miscarriage will not be covered by most policies. Some policies offer this benefit as an add-on cover. There are some policies in the market that offer this benefit under a regular cover after a certain waiting period.
• Experimental treatment and non-allopathic treatment will not be covered by most policies. Some mediclaim policies now provide coverage for AYUSH (Ayurveda, Unani, Siddha, and Homeopathy) treatment obtained in treatment centers approved by the government.

Benefits of buying a mediclaim policy

There are many cases where people do not appreciate the importance of having a mediclaim policy. A mediclaim policy comes with a lot of benefits that cannot be ignored at any cost. When you have the right mediclaim policy, you can experience the following benefits:

• Financial security: This is the most obvious benefit of having a mediclaim policy. Health insurance protects you against various medical emergencies that could wipe out your entire savings and result in financial troubles. By paying a small amount as premiums every year, you could secure the financial well-being of your entire family.
• Peace of mind: When you have comprehensive mediclaim policy, you don’t have to worry about a situation wherein you might be in a medical emergency. With adequate protection, you could have the much needed peace of mind without worrying about the future.
• Cost efficiency: The cost-to-benefit ratio of health insurance is remarkable especially when you enter the cover at a very young age. Though the cost increases as you age, you could get higher benefits like no claim bonus when you are in a medical insurance cover for a while.
• Value-added benefits: A mediclaim policy is not just about covering the hospitalisation expenses incurred by the policyholder. Most health insurance companies offer a range of value-added benefits including ambulance coverage, day care treatment cover, critical illness cover, cash allowance during hospitalisation, etc.

Tax benefits available with mediclaim policies

In addition to the major benefits listed above, a mediclaim policy offers tax relief as per Section 80D of the Income Tax Act. The premium amount paid towards a health insurance plan for you and your family is eligible for tax relief. If you have dependent parents, you can also claim the tax relief applicable for senior citizens. The deduction limit allowed under Section 80D and Section 80DD can be listed as follows:

• A deduction limit of Rs.25,000 is applicable for the premium amount paid for self, spouse, and dependent children.
• In Union Budget 2018, the deduction limit for senior citizens has been increased to Rs.50,000 from Rs.30,000.
• For expenses related to preventive health checkup, a deduction of Rs.5,000 under a mediclaim policy.
• Under Section 80DD of the Income Tax Act, tax deduction limit for the nursing, treatment, and rehabilitation of a disabled person is Rs.75,000.
• Under Section 80DD of the Income Tax Act, expenses related to serious disability treatment have a tax deduction limit of Rs.1.25 lakh.

How to compare and buy mediclaim policy online?

Most of the urban working population do not have the time to visit a company’s branch office and apply for an insurance cover. With the advent of technology, more and more people are now choosing to buying their mediclaim policy online. In order to cater to their needs, health insurers have made the entire process extremely simple in the recent days.

Information availability

Anything related to a mediclaim policy can be obtained online. If you are looking for a product’s brochure and policy document, they can be downloaded from the company’s official website. Any query regarding a particular mediclaim policy can cleared by accessing the company’s customer service. Some of the top companies in the market even have automated chatbots to help customers access the right information from the company’s official website.

Compare and buy

Information availability has made it possible for customers to compare the features of multiple insurers. You can also use the service of a third-party aggregator like Bankbazaar to provide unbiased information about various insurance policies in the market. When you are comparing mediclaim policies, you must choose the best one suitable for your individual requirements.

The health insurance market is currently flooded with a huge number of mediclaim policies. Choosing the best one can be a bit of a challenge. First, you must narrow down the mediclaim policies based on the sum insured you need. Cost is a major factor, but it must not be the sole focus when buying insurance. Make sure that the medical insurance policy has the right mix of coverage, cost efficiency, and ease in claim settlement.

How does a mediclaim policy works?

Health insurance is all about providing financial help when a policyholder faces an adverse medical emergency. A mediclaim policy works similar to that of a community fund. Everybody contributes with yearly policy premiums and financial assistance is offered to those who are in need. A mediclaim policy provides coverage for hospitalisation caused by various illnesses and accidents. In India, all rules related to health insurance are formulated and monitored by the Insurance Regulatory and Development Authority of India (IRDAI).

Application and issuance of policy

Some of the major health insurance companies operating in India are already listed here. A customer seeking coverage from an insurer will file an application for a specific policy. Nowadays, most health insurance applications are filed online. Also, most health insurers have started offering paperless policies that require little to no paperwork. After the application, the insurer will match the customer’s request with the eligibility criteria and approve the request after confirmation. The policy will be active as soon as it is issued to the customer.

Terms and conditions

All customers have to comply with the term and conditions set forth by the insurer. These terms are monitored by the IRDAI. Considering the heavy competition in the health insurance market, companies offer flexible terms for the customers. All terms and conditions related to a policy will be provided in the policy document issued to the customer. It also dictates the way in which claims can be made in a mediclaim policy.

Claim approval

Most of the top health insurance companies have simplified the claim process to the benefit of their customers. If customers contact the customer service of the company, the customer support team will guide them on how to proceed with the claim filing. The claim procedure is simple and straightforward with most insurers. For cashless treatment claims, the approval has to be obtained beforehand from the company. For reimbursement claims, the insured must submit all the bills and receipts along with the claim form. Some companies handle claim processing on their own, while others use the service of a third-party administrator (TPA) to handle all claims.

Things to consider while buying a mediclaim policy

Before you sign up for a mediclaim policy, you must consider the following things in order to choose the right one:

• Advantages of entering young: The cost of health insurance is extremely cheap when you enter young. Even if the cost increases as you age, you can accumulate various benefits of exhaustion of waiting period, cumulative period, etc. and prepare yourself for a comprehensive cover when you actually need.
• Individual vs family floater: It could be extremely expensive to take individual policies for everyone in your family. It is cost efficient to take family floater covers for your spouse and dependent children. Since family floater premiums are calculated based on the oldest member of the family, it is better to take individual policies for aged parents and grandparents.
• Lifestyle rewards: There are many insurers that reward you for following a healthy lifestyle. These rewards are typically offered in the form of premium discounts or higher sum insured.
• Network hospitals: Cashless medical treatment is possible only in the network hospital of the insurer. Hence, you must make sure that there are enough network hospitals in the city in which you live. The list of network hospitals in a particular location can be accessed from the company’s website.
• Copayment/deductible: Some insurers require mandatory copayment for policyholders beyond a certain age. Voluntary deductible is also offered by most health insurance companies. Check the policy document to make sure that these terms are acceptable to you.
• Waiting period: Almost all insurers have waiting period when it comes to providing coverage for certain illnesses. For instance, there is a specific waiting period applicable for all pre-existing conditions. The period of waiting may differ from one insurer to another. The best thing you can do is to choose the company that offers the lowest waiting period.
• Sub-limits for certain diseases: For most general ailments and surgeries, insurers offer coverage up to the sum insured limit. However, there might be sub-limits for certain expenses such as room rent, nursing costs, etc.. These sub-limits will be clearly mentioned in the policy document. For instance, most insurers cap the room rent at 1% of the sum insured per day.. Make sure that these sub-limits are acceptable to you.
• Coverage for critical illnesses: Some insurers offer critical illness coverage only as an add-on cover, while others provide this in-built with their regular plans. Make sure that the medical policy has adequate allocation for the treatment of critical illnesses.
• Top-up cover: Most insurers offer an array of top-up plans (riders) that can be chosen by paying some additional premium amount. You must choose the riders carefully as you might end up choosing plans that you don’t even require. Explore the rider options available under various policies and choose the right mix suitable for you.
• Portability options: If you come across a better mediclaim policy while already subscribed to another one, you have the option of porting your existing policy to the new service provider without losing out on any accumulated benefits. Most insurers allow portability only at the time of renewal. You must make sure that the terms of portability are convenient for you.
• Free-look period: As per the IRDA regulations, all insurers must provide a free-look period of 15 days to their policyholders. During this period, policyholders can review the policy and cancel the policy without incurring any costs. No claim must have been made during this period in order to get the refund.

Claim settlement process in a medical policy

With the advent of technology, most insurance companies have made the claim settlement process easy for the benefit of their customers. Most of the top insurers allow the entire process to happen online without the need for customers to visit a branch office. When it comes to claim settlement, it could either be cashless treatment or reimbursement claims. Let’s the process for both forms of claims in detail.

Cashless treatment claims

Cashless treatment is possible only in the network hospitals of your insurer. So, you must first make sure that you are getting admitted in a network hospital that has tie-up with your insurer. Even if the diagnosis is made in different hospital, you can transfer yourself to a network facility to initiate the treatment. For planned hospitalisation, the insurer must be informed at least 48 hours (may vary) before admission in a hospital. For emergency hospitalisation, the insurer must be notified within 24 hours of hospital admission.

Once you are in the hospital, you must ask for a pre-authorisation form from the hospital. All your policy details must be filled in the form and sent to the insurer or TPA through fax. The insurer or TPA will check the validity of the claim and send the approval to the hospital. Most of the top insurers take just a few hours to send the approval. The approval time may vary from one insurer to another. However, there are provisions in a mediclaim policy to treat emergency cases instantly even before receiving the approval.

Reimbursement claims

For reimbursement claims, the claim request can be submitted once the treatment is over. Even in this case, the insurer must be notified before the initiation of the treatment. It is necessary to get treatment in a facility that is approved as a hospital. It is always safe to get treatment in a network hospital to make sure that the claim process goes smooth. Once the treatment is over, the claim request must be submitted within a maximum of 7 days (this time period may vary depending upon the insurer).

At the time of filing a claim, the insured must provide various bills and receipts for the proof of medical treatment. All details regarding your mediclaim policy must be filled in carefully without any errors. After the submission of all the required documents, the insurer or TPA will initiate the claim proceedings. The documents will be verified to ensure that there is no malpractice. Once the document verification is over, the company will intimate the insured person regarding the approval or rejection of the claim. Typically, it takes about 15 days to communicate this information to the insured. Most insurers take about 30 days to provide the settlement amount to the insured.

Documents to be submitted

During the claim process, the insured must submit the following documents to initiate the claim proceedings:

• Duly filled claim form
• Original medical bills
• Cash receipts
• Pharmacy prescriptions
• Diagnostic reports
• Physician’s certificate/surgeon’s certificate
• Discharge summary
• Disability certificate (if applicable)
• FIRs or police reports (in case of accidents)

FAQs on Mediclaim Policy

1. Why is mediclaim important?

A mediclaim policy provides you with timely assistance and saves you from financial troubles. Unexpected expenses caused by medical emergencies will cause a dent in your family’s finances and lead to indebtedness. Moreover, healthcare is getting expensive every year in our country. To safeguard yourself from a potential financial mess, it is always better to have health insurance protection. If you are young working professional, the cost of mediclaim is not very high but the protection offered here is remarkable.

2. What is cashless treatment facility?

Cashless treatment allows you to get medical treatment without paying any money. This is a facility offered by most insurance companies through their tie-ups with major hospital networks in the country. All you have to do is produce your insurance details and send an authorisation request to the insurer. The hospital staff will guide you with the process once you produce your insurance details. Upon receiving the authorisation, the hospital will proceed with the treatment. Any medical bills related to the treatment will be sent directly to the insurer, and the insurer will provide compensation to the hospital.

3. How long should I wait before the policy coverage begins?

Once you have signed up for a mediclaim policy, there is an initial waiting period of 30 days. Any illnesses contracted during this period will not be covered. However, if there is an accidental hospitalisation, this initial waiting period will not apply.

4. What is a pre-existing illness? Is it covered by a mediclaim policy?

Any illnesses that you already have at the time of taking a policy are called pre-existing illnesses. It is a must to disclose this information to the insurer at the time of sign up. Most mediclaim policies provide coverage for pre-existing illnesses after a certain waiting period. In some cases, the waiting period for pre-existing illnesses may extend up to 4 years.

5. What is a group mediclaim policy?

Group mediclaim policies are intended for people belonging to a specific group. The most common form of group mediclaim is the insurance cover purchased by an employer to provide coverage for his employees.

6. Who should buy family floater mediclaim policies?

Family floater mediclaim policies are ideal for people who have dependent family members. If you have spouse, children, and parents, you may not be able to afford buying individual policies for everyone. In this case, you can cover all your family members within the same policy by paying a single premium. The sum insured amount can be used by any family member at the time of need.

7. How can I renew my mediclaim policy?

You can renew your mediclaim policy simply by visiting the official website of your insurer. If you are not sure about how to do it, you can get the help of the customer service. You may also renew your insurance cover by visiting the branch office of an insurance company.

8. How is the premium amount calculated for a mediclaim policy?

The premium amount for a mediclaim policy is based on various factors like age of the eldest family member, policy term, coverage type, sum insured chosen, location of the insured, number of members in a policy, etc. Most of the top insurers have premium calculators in their websites to help customers know their charges. You can also get a premium quote by entering in your personal details like name and phone number.

9. How much sum insured do I need in a mediclaim policy?

Choosing the sum insured amount is entirely based on your personal choice. If you have a family history of medical conditions, it is better to have a higher sum insured amount. For individuals, a sum insured amount of Rs.2 lakh to Rs.3 lakh could be adequate in most cases. For families, it is better to have a floater cover with sum insured over Rs.5 lakh.

10. Is there any grace period for renewing my mediclaim policy?

It is always better to renew a policy before the date of expiry. However, if it is not renewed by that date, there is a grace period of 15 days before the policy lapses. There will not be any coverage for the days for which the premium is not renewed.

11. What is the best mediclaim policy for senior citizens?

There are some health insurance companies that offer policies designed exclusively for senior citizens in the country. Some of the top policies in the market include:

• Star Red Carpet Senior Citizen Policy
• Care Freedom
• Apollo Munich Optima Senior
• Max Bupa Heartbeat (no maximum age)
• Bajaj Allianz Silver Health
• Oriental Insurance HOPE

12. Can I use my mediclaim policy to get LASIK surgery?

Mediclaim policies provide coverage only for general ailments and emergency treatments. LASIK is a cosmetic procedure, and it will not be covered by a mediclaim policy.

13. What is overseas mediclaim policy?

An overseas mediclaim policy provides coverage for any illnesses or accidents occuring in foreign soil. This is not a common feature in most mediclaim policies available in the market. Very few companies offer this type of insurance. If you are a frequent overseas traveller, you must consider choosing a policy that offers this benefit.

14. How many claims can I make in one year?

You can make any number of claims within the limit of your sum insured amount. If you have a family floater policy, you can make claims for more than one covered member during a particular policy year.

15. Can I get coverage for dental treatment?

Dental treatment is also considered to be a cosmetic treatment by most medical insurance companies. Hence, dental coverage is not a standard thing in a mediclaim policy. However, this does not apply for dental issues arising out of accidents. Any dental surgery necessitated by an accident will be covered by a mediclaim policy.

16. Can I transfer my mediclaim policy to another insurance company?

Yes. This feature is called portability. As per the IRDAI regulations, portability feature is a must for all insurance service providers. If you come across a better policy cover while already subscribed to a mediclaim policy, you can transfer this cover to the other service provider. This can be done only at the time of renewal. The existing service provider must be notified about this change at least 45 days in advance.

17. Will I lose my accumulated benefits if I transfer the policy to another insurer?

No. You will not lose out on any accumulated benefits if you transfer your policy to another insurance company. Benefits like no claim bonus, renewal credits for pre-existing conditions, etc. can also be transferred during portability.

18. Till what age can I renew my mediclaim policy?

Insurance companies set forth specific eligibility criteria with respect to the entry age of the policyholder. There is no exit age in most mediclaim policies as long as the renewal premium is paid on time. A few insurance companies cap the maximum age of availability to a specific limit, but this is no longer a common thing. Lifelong renewability option is now available with most insurers.

19. What are the common add-on policies available with mediclaim policies?

Most insurance companies offer plenty of add-on (rider) policies to enhance the coverage offered. These policies can be bought by paying a little extra premium amount. Some of common riders available with mediclaim policies include:

• Personal accident cover
• Unlimited automatic recharge
• Critical illness cover
• Cumulative bonus enhancement cover
• Global mediclaim cover
• International second opinion cover
• Air ambulance cover