Health Insurance — Understand, Plan & Protect
Health insurance shields you and your family from expensive hospital bills. It covers hospitalisation, surgeries, and critical illnesses. Pre-existing diseases such as diabetes or hypertension are covered after a waiting period. The insurer either reimburses the cost or pays directly to the hospital through cashless claim networks.
Key Practical Points and Definitions
- Pre-existing Conditions: A pre-existing disease is one that exists before you buy the policy. Insurers impose a waiting period (2–4 years) before claims for such conditions are payable. This ensures fairness and reduces misuse of cover.
- Waiting Period: Certain illnesses like hernia, cataract, or joint replacement have a waiting period even if they are not pre-existing. This typically ranges from 1 to 3 years.
- Room Rent Limit: If your policy restricts room rent (say 1% of the sum insured), your overall claim could be reduced. Always check if your policy offers no cap or higher flexibility.
- Incurred Claim Ratio (ICR): This ratio measures total claims paid versus total premiums collected by the insurer. A ratio between 80% and 90% is considered healthy — too high may mean poor profitability, too low may mean fewer claims paid.
- Claim Settlement Ratio (CSR): It shows the percentage of total claims settled by the insurer in a year. A CSR above 95% indicates reliability and customer satisfaction.
Ramesh, 42, had no health insurance when his father was hospitalised for a heart bypass surgery costing ₹8 Lakh. They had to dip into savings and sell investments. The next month, he bought a ₹15 Lakh family floater policy. Two years later, his wife underwent gallbladder surgery — the cashless claim saved him ₹1.8 Lakh, proving the value of coverage.
Preeti purchased a health plan but did not declare her thyroid disorder. When she was hospitalised for a related complication, the insurer denied her claim for non-disclosure. She later learned that full honesty during purchase is essential. Insurers verify medical history during large claims, so honesty ensures smooth settlement.
Checklist Before Buying Health Insurance
- ⦿ Check if your preferred hospitals are part of the insurer’s cashless network.
- ⦿ Understand all waiting periods and exclusions clearly before purchase.
- ⦿ Choose coverage adequate for urban medical costs — ₹10 Lakh minimum for metro families.
- ⦿ Review both ICR and CSR to assess insurer reliability.
- ⦿ Renew your policy without gaps to preserve waiting-period credits.
| S.No | Insurer | Health ICR (2022–23) | Health ICR (2023–24) |
|---|---|---|---|
| Public Sector Insurers’ Average | 105.77% | 97.23% | |
| 1 | National Insurance Co. Ltd. | 102.35% | 95.90% |
| 2 | New India Assurance Co. Ltd. | 103.33% | 97.36% |
| 3 | Oriental Insurance Co. Ltd. | 101.96% | 88.99% |
| 4 | United India Insurance Co. Ltd. | 109.23% | 96.50% |
| Standalone Health Insurers’ Average | 61.44% | 63.63% | |
| 1 | Aditya Birla Health Insurance Co. Ltd. | 64.68% | 68.31% |
| 2 | Care Health Insurance Ltd. | 59.82% | 57.69% |
| 3 | ManipalCigna Health Insurance Co. Ltd. | 64.66% | 63.78% |
| 4 | Niva Bupa Health Insurance Co. Ltd. | 54.05% | 59.02% |
| 5 | Star Health and Allied Insurance Co. Ltd. | 65.00% | 66.47% |
| Private Sector Insurers’ Average | 80.09% | 76.49% | |
| 1 | Acko General Insurance Limited | 56.91% | 69.57% |
| 2 | Bajaj Allianz General Insurance Co. Ltd. | 74.87% | 73.80% |
| 3 | Cholamandalam MS General Insurance Co. Ltd. | 66.67% | 73.66% |
| 4 | Future Generali India Insurance Co. Ltd. | 84.62% | 71.85% |
| 5 | Go Digit General Insurance Ltd. | 93.87% | 70.32% |
| 6 | HDFC ERGO General Insurance Co. Ltd. | 80.98% | 87.70% |
| 7 | ICICI Lombard General Insurance Co. Ltd. | 78.85% | 70.79% |
| 8 | IFFCO Tokio General Insurance Co. Ltd. | 107.46% | 86.33% |
| 9 | Kotak Mahindra General Insurance Co. Ltd. | 59.06% | 65.56% |
| 10 | Kshema General Insurance Limited | 59.06% | 69.54% |
| 11 | Liberty General Insurance Limited | 74.17% | 75.29% |
| 12 | Magma HDI General Insurance Co. Ltd. | 72.10% | 79.88% |
| 13 | Navi General Insurance Limited | 58.29% | 52.40% |
| 14 | Raheja QBE General Insurance Co. Ltd. | 106.27% | 77.91% |
| 15 | Reliance General Insurance Co. Ltd. | 88.92% | 81.06% |
| 16 | Royal Sundaram General Insurance Co. Ltd. | 92.06% | 77.62% |
| 17 | SBI General Insurance Co. Ltd. | 73.92% | 85.90% |
| 18 | Shriram General Insurance Co. Ltd. | 47.74% | 63.33% |
| 19 | Tata AIG General Insurance Co. Ltd. | 78.33% | 71.43% |
| 20 | Universal Sompo General Insurance Co. Ltd. | 82.84% | 81.74% |
| 21 | Zuno General Insurance Co. Ltd. | 88.45% | 82.64% |
| Grand Total (All Insurers) | 72.78% | 82.52% |
Term (Life) Insurance — Income Protection for Your Family
Term insurance replaces your income if you are not around. It ensures that your family can continue their lifestyle, pay off loans, and achieve long-term goals. It is a pure protection plan — you don’t get returns if you survive, but your dependents get a large payout if you don’t.
Important Points to Understand
- Sum Assured: Choose a coverage amount 15–20 times your annual income, plus liabilities such as home or car loans.
- Policy Term: The term should match your earning years, usually until 60–65 years of age.
- Premium Factors: Age, occupation, smoking habits, and medical history influence your premium. The earlier you start, the cheaper it is.
- Claim Settlement Ratio: Indicates the insurer’s reliability. Always pick insurers with a CSR above 95%.
- Tax Benefits: Premiums qualify for deductions under Section 80C, and death benefits are tax-free under Section 10(10D).
Rajiv, 33, took a ₹1 Crore term plan while buying his first house. When he passed away in an accident four years later, his wife received the entire amount within two weeks. The payout cleared the home loan and funded their child’s education — his foresight ensured financial security.
Arun, 40, delayed taking term insurance, assuming his company cover was enough. When he died suddenly, his company-provided group cover of ₹10 Lakh was inadequate for his family’s expenses and loans. His wife had to liquidate assets. A ₹1 Crore term plan would have cost him less than ₹1,000 a month and prevented this hardship.
FAQ — Common Questions Simplified
1. What is the difference between cashless and reimbursement claims?
In cashless claims, the insurer pays the hospital directly if it’s within their network. In reimbursement, you pay first and later claim back with bills. Always prefer insurers with wide cashless networks.
2. What is the Claim Settlement Ratio (CSR)?
It represents the percentage of claims the insurer settles out of total claims received in a year. A CSR above 95% means the insurer is reliable and efficient in handling claims.
3. What is the Incurred Claim Ratio (ICR)?
ICR shows how much of the premium collected is paid out as claims. For example, if an insurer’s ICR is 80%, it means ₹80 of every ₹100 premium was paid in claims. A balanced ICR between 80–90% is ideal.
4. How to choose the right coverage amount?
For health insurance, aim for at least ₹10 Lakh coverage for an urban family. For term insurance, calculate 15–20 times your annual income plus existing loans.
5. Are there tax benefits on insurance?
Yes. Health insurance premiums qualify under Section 80D (₹25,000 for individuals, ₹50,000 for senior citizens), and life insurance under Section 80C. Death benefits under term plans are tax-free under Section 10(10D).
6. Can I have multiple health or life insurance policies?
Yes. You can claim from multiple health policies if expenses exceed one policy’s limit. In life insurance, multiple policies add to your total cover — just ensure you declare all existing covers when applying.
7. What happens if I stop paying the premium?
For health policies, your coverage lapses after the grace period. For term insurance, the policy ends, and coverage stops immediately. Renewal or reinstatement may require medical tests again.
8. What are riders, and do I need them?
Riders are add-ons like accidental death, disability, or critical illness cover. Take them only if relevant — unnecessary riders increase premium cost.
9. What is portability in health insurance?
Portability lets you switch insurers while retaining credit for waiting periods. Apply at least 45 days before renewal to avoid rejection or lapse.
10. When is the best time to buy insurance?
The sooner, the better. Buying early ensures lower premiums, fewer exclusions, and longer coverage. Never wait for a health issue or financial trigger — insurance is about preparation, not reaction.