About Health Insurance

An unexpected illness or accident could make a dent in your bank accounts and make your financial plans go haywire. With ever-rising costs of medical care, making health insurance is important not only for yourself but for your loved ones as well. As everyone is different, so are their needs. Your health insurance should be decided upon after careful consideration of following factors:

Premium Payment Terms

Your financial ability to pay premium is an important factor while deciding the extent of health insurance cover that you will need. Not everyone can pay the premium for Rs 20 lakh cover, however, you can pay what you can afford. A good way to calculate that is by taking 2% of your yearly income – for example, if you earn Rs 6 lakh a year, you might be able to pay an amount of Rs 12,000 yearly which will give you a decent cover from today’s standard.

Annual Income Percentage

Annual income is directly proportionate to the health insurance cover. Your annual income is a considering factor by the insurance providers, while determining the maximum health insurance cover you are eligible for. Practically, you should have health insurance cover between 50% to 100% of your annual income.
A simple but helpful formula is: Health Insurance cover = 50% of Income + 100% of last 3 years’ expenses on health (hospitals)

Family Medical History

Family history is another factor that affects your health insurance cover. The insurer will look at the history of health problems of your family members in order to evaluate the risk of the insured contracting the same. Individuals falling under the high-risk category should get a comprehensive high cover health insurance policy.

Age of the Insured

Age is another important factor that will affect your health insurance coverage. Individuals who have bought health insurance policies while young avail a discount on premium. For example, if you start at age 25 you can buy health insurance worth Rs 5-10 lakh and then increase it by 10-15% every year. And individuals over 45 years of age would have to pay higher premium for health insurance coverage.

Type of Hospital

The health insurance cover is also affected by the grade of hospital where you choose to be hospitalized. The rate of same treatment differs in different hospitals. So, the amount of health insurance cover that is needed has to be determined by calculating the expenses that might incur from the hospital of your choice.

Tax Benefit

When you avail a health insurance policy mainly for the purpose of tax benefits, then you need not take a comprehensive health insurance cover. You can evaluate the amount of tax deduction you wish to avail through the policy and then purchase one that meets your requirement. The maximum limit for 80D deduction is Rs. 25, 000, and Rs. 30,000 for senior citizens.

To find the best insurance policy, you need to understand what it says. One new term and your interest as well as understanding of the policy goes out of the window. So, we are compiling a list of 15 such terms that you must know before buying your next health insurance

Cashless Claim

As the term suggests, the insured can make a claim without paying any cash for the medical assistance at the specified network hospitals.

Coverage Amount/Sum Assured/Sum Insured

It is the maximum amount payable in the event of a claim. The premium of the health insurance policy is dependent on the coverage amount chosen by you.

Critical Illness Policy

A policy for a serious, possibly terminal disease, which is strictly defined by the insurer. Most critical illness policies provide for the payment of a lump sum benefit if the policyholder is diagnosed as suffering from any one of the specified conditions.

Cumulative Bonus

Cumulative bonus is similar to no claim discounts, the only difference being that instead of giving an upfront discount, the health insurance company adds more benefits for the same premium paid.

Disability Insurance

It is a form of insurance that pays a monthly income to the insured when he suffers from total or partial disability caused due to either illness or injury, that affects his capacity to work and earn.


It is the amount of loss borne by the insured after which the insurance kicks in. This share of expense can be a certain money amount or a percentage of the claim amount. However, bigger the deductible, lower is the premium.


The diseases, conditions or situations in which medical expenses are not covered by the health insurance policy. Exclusions can be of two types – ‘Permanent’, i.e. the ones never covered and ‘First year’, which are ailments covered from second year.

Floater Policy

A policy that is issued with a single sum insured covering number of individuals. The cover can be used by any member of the family any number of times.


It is the limitation in an insurance policy on the amount of coverage available to cover a specific type of expenditure. It can be in amount or percentage.


It is the amount a health insurance company adds to you renewal premium if you had made any claims in the previous year.

No Claim Bonus

It is a bonus or rather a discount on the Basic Premium if there is a claim-free year in the policy. This bonus gets accumulated with each year you don’t make a claim.

Overseas Mediclaim Policy (OMP)

An Overseas Mediclaim Policy is issued to persons who are undertaking trips abroad for business, pleasure or educational purposes.

Personal Accident Policy

They are issued as fixed benefit policies whereby specified sums are paid on the occurrence of specified events such as death or disability.

Pre-existing Disease

It is any ailment or disease that a person is already suffering from, at the time of purchasing health insurance.

Third Party Administrator (TPA)

The authorized claim settling agents of the Insurer who ensure that the policy terms and conditions are compiled to.

First, put all receipts, bills and medical reports in order.

Arrange them in chronological order.
Check that all the documents contain required information like the patient name, document number, serial number, cost price, signature of the authorised person and so on.

Second, ask your insurance company for the claim form.

Usually the claim form can be downloaded from the insurance company’s website. Read the instructions given in the claim form carefully. Fill in the claim form with all the required details. Make sure the information is correct.
Next, get the claim form signed by the policy holder as well as the treating consultant. It must also be stamped with the official hospital seal.
Finally, attach all the relevant medical and policy documents to the claim form

Medical documents include:

  • The discharge summary
  • All documents relating to the patient’s illness
  • All reports with details of the treatments and procedures conducted
  • A certificate from the attending medical practitioner stating that the patient has recovered or is recovering

Policy documents include:

  • Details of previous policies
  • The starting date of the policy cover document
  • The initial details of the first policy
  • The Third Party Administrator (TPA) card

Third, prepare copies of all the original documents.

Both, the original documents as well as their copies, need to be submitted with the claim form. Submission of only copies is usually not accepted.

Attach the documents in serialised or chronological order.

Review the documents carefully. Make sure that none of the documents issued at the time of treatment are missing. If any documents are missing at the time of submission, the claim may not go through.

Fourth, submit the documents with the correct TPA.

You can get the name of the TPA from your insurance company. When you visit the TPA branch, ask an executive to check the submitted documents. Then submit the documents with the executive.

You should also inform the health care insurance company that the claim has been submitted, by sending them a set of copied documents


means a sudden, unforeseen and involuntary event caused be external, and visible and violent means.

Alternative treatments

Alternative treatmentsare forms of treatments other than treatment "Allopathic" or "modern medicine" and includes Ayurveda, Unani, Siddha and Homeopathy in the Indian context.

Sum Insured

Sum Insuredmeans and denotes the maximum amount of cover available to the insured during each Policy Year of the Policy Period, as stated in the Policy Schedule or any revisions thereof based on Claim settled under the Policy.

Any one illness

Any one illnessmeans continuous Period of illness and it includes relapse within 45 days from the date of last consultation with the Hospital/Nursing Home where treatment may have been taken.

Congenital Anomaly

Congenital Anomalyrefers to a condition(s) which is present since birth, and which is abnormal with reference to form, structure or position.

  1. Internal Congenital Anomaly - Congenital anomaly which is not in the visible and accessible parts of the body
  2. External Congenital Anomaly - Congenital anomaly which is in the visible and accessible parts of the body

Cashless Facility

Cashless Facility means a facility extended by the insurer to the insured where the payments, of the costs of treatment undergone by the insured in accordance with the policy terms and conditions, are directly made to the network provider by the insurer to the extent preauthorization approved.

Cumulative Bonus

Cumulative Bonus shall mean any increase in the Sum Insured granted by the insurer without an associated increase in premium.

Day Care Treatment

Day Care Treatment refers to medical treatment, and/or Surgical Procedure which is:

  1. Undertaken under General or Local Anaesthesia in a Hospital/ Day care centre in less than 24 hrs because of technological advancement, and
  2. Which would have otherwise required a hospitalisation of more than 24 hours. Treatment normally taken on an out-patient basis is not included in the scope of this definition.

Day care centre

Day care centre means any institution established for day care treatment of Illness and/ or injuries or a medical set - up within a hospital and which has been registered with the local authorities, wherever applicable, and is under the supervision of a registered and qualified medical practitioner AND must comply with all minimum criteria as under:- has qualified nursing staff under its employment; has qualified medical practitioner(s) in charge; has a fully equipped operation theatre of its own where surgical procedures are carried out-maintains daily records of patients and will make these accessible to the Insurance company's authorized personnel.


Deductible is a cost sharing requirement under a health insurance policy that provides that the insurer will not be liable for specified rupee amount in case of indemnity policies and for a specified number of days/ hours in case of hospital cash policy, which will apply before any benefits are payable by Us. This is to clarify that a deductible does not reduce the sum insured.


Hospital means any institution established for in-patient care and day care treatment of illness and/ or injuries and which has been registered as a hospital with the local authorities under the Clinical Establishments (Registration and Regulations) Act 2010 or under enactments specified under the Schedule of Section 56(1) of the said Act OR comply with all minimum criteria as under:

  1. Has at least 10 inpatient beds, in those towns having a population of less than 10,00,000 and 15 inpatient beds in all other places;
  2. Has qualified nursing staff under its employment round the clock;
  3. Has qualified medical practitioner(s) in charge round the clock;
  4. As a fully equipped operation theatre of its own where surgical procedures are carried out
  5. Maintains daily records of patients and will make these accessible to the Insurance company's authorized personnel.


Hospitalisation means admission in a Hospital for a minimum period of 24 In patient Care and consecutive hours except for specified Day Care procedures/ Treatments, where such admission could be for a period of less than 24 consecutive hours.

Inpatient care

Inpatient care means treatment for which the insured person has to stay in a Hospital for more than 24 hours for a covered event.


Illness means a sickness or disease or pathological condition leading to the impairment of normal physiological function which manifests itself during the Policy Period and requires medical treatment.

  1. Acute condition - Acute condition is a disease, illness or injury that is likely to respond quickly to treatment which aims to return the person to his or her state of health immediately before suffering the disease/ illness/ injury which leads to full recovery.
  2. Chronic condition - A chronic condition is defined as a disease, illness, or injury that has one or more of the following characteristics:- it needs ongoing or long-term monitoring through consultations, examinations, check-ups, and/ or tests-it needs ongoing or long-term control or relief of symptoms-it requires your rehabilitation or for you to be specially trained to cope with it-it continues indefinitely-it comes back or is likely to come back.


Injury means any accidental physical bodily harm occurring during the Policy Period, excluding illness or disease solely and directly cased by external, violent, visible and evident means which is verified and certified by a Medical Practitioner.

Insured/ Insured Person(s)

Insured/ Insured Person(s) means the individual(s) whose name(s) is/ are specifically appearing as such in the Policy Schedule and is/ are hereinafter referred as "You"/"Your"/"Yours"/"Yourself"

Medically necessaryis defined as any treatment, tests medication or stay in hospital or part of a stay in Hospital which

  1. Is required for the medical management of the illness or Injury suffered by the insured
  2. Must not exceed the level of care necessary to provide safe, adequate and appropriate medical care in scope, duration or intensity
  3. Must have been prescribed by a Medical practitioner
  4. Must conform to the professional standard widely accepted in international medical practice or by the medical community in India Medical Practitioner is a person who holds a valid registration from Medical Council of any State or Medical Council of India or Council for Indian Medicine or for Homeopathy set up by the Government of India or a State Government and is thereby entitled to practice medicine within its jurisdiction; and is acting within the scope and jurisdiction of his license. The term Medical Practitioner would include physician, specialist, anaesthetist and surgeon but would exclude You and Your Immediate Family. "Immediate Family" would comprise of Your spouse, dependent children, brother(s), sister(s) and dependent parent(s).

Network Provider

Network Provider means hospitals or health care provider enlisted by an insurer or by a TPA and insurer together to provide medical services to an insured on payment by a cashless facility.

Non- Network

Non- Network means any Hospital, day care centre or other provider that is not part of the Network.

Notification/ Intimation of Claim

Notification/ Intimation of Claim is the process of notifying a claim to the insurer or TPA by specifying the timelines as well as the address/ telephone number to which it should be notified.

OPD treatment

OPD treatment is one in which the Insured visits a clinic/ hospital or associated facility like a consultation room for diagnosis and treatment based on the advice of a Medical Practitioner. The Insured is not admitted as a day care or in-patient.


Policy means these Policy wordings, the Policy Schedule and any applicable endorsements or extensions attaching to or forming part thereof. The Policy contains details of the extent of cover available to You, what is excluded from the cover and the terms & conditions on which the Policy is issued to You.

Policy Year

Policy Year means a period of twelve months beginning from the Policy Period Start Date and ending on the last day of such twelve month period. For the purpose of subsequent years, "Policy Year" shall mean a period of twelve months beginning from the end of the previous Policy Year and lapsing on the last day of such twelve-month period, till the Policy Period End Date, as specified in the Policy Schedule


Portability means transfer by an individual health insurance policyholder (including Family cover) of the credit gainer for pre-existing conditions and time bound exclusions if he/she chooses to switch from one insurer to another

Pre-existing Disease

Pre-existing Disease means any condition, ailment or injury or related condition(s) for which You had signs or symptoms, and/ or were diagnosed, and/ or received medical advice/ treatment, within 48 months prior to the first policy issued by the insurer.

Post Hospitalisation Medical Expenses

Post Hospitalisation Medical Expenses means medical expenses incurred immediately after the Insured Person is discharged from the hospital, provided that:

  1. Such Medical Expenses are incurred for the same condition for which the Insured Person's Hospitalisation was required, and
  2. The In-patient Hospitalization claim for such Hospitalization is admissible by the Insurance Company.

Pre Hospitalisation

Pre Hospitalisation means medical expenses incurred immediately before the Insured Person is Hospitalised, provided that:

  1. Such Medical Expenses are incurred for the same condition for which the Insured Person's Hospitalisation was required, and
  2. The In-patient Hospitalization claim for such Hospitalization is admissible by the Insurance Company.

Reasonable and Customary Charges

Reasonable and Customary Charges means the charges for services or supplies, which are the standard charges for the specific provider and consistent with the prevailing charges in the geographical area for identical or similar services, taking into account the nature of Illness/injury involved. Room Rent means the amount charged by a hospital for the occupancy of a bed on per day (24 hours) basis and shall include associated medical expenses.