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Is your insurance companylistening to you?If your complaints have not been addressedby your insurance company,please contactto register your complaints and track their statusor you may email us at complaints@irda.gov.inHandbook onHealth Insurance

1. About this handbookContents:1. About this handbook12. Health Insurance23. Frequently asked questions64. Policyholder Servicing TATs145. If you have a grievance15This handbook is designed by the Insurance Regulatoryand Development Authority (IRDA) as a guide onHealth Insurance and gives general information only.No information given herein replaces or overrides theterms and conditions of an insurance policy.Please approach a duly licensed agent or a broker or aninsurance company registered with IRDA for specificinformation regarding a policy or for any otheradditional information.1

2. Health InsuranceThe term ‘Health Insurance’ relates to a type ofinsurance that essentially covers your medicalexpenses. A health insurance policy like other policies isa contract between an insurer and an individual / groupin which the insurer agrees to provide specified healthinsurance cover at a particular “premium” subject toterms and conditions specified in the policy. What a Health Insurance policy would normallycoverA Health Insurance Policy would normally coverexpenses reasonably and necessarily incurred underthe following heads in respect of each insured personsubject to overall ceiling of sum insured (for allclaims during one policy period).a) Room, Boarding expensesb) Nursing expensesc) Fees of surgeon, anesthetist, physician,consultants, specialistsd) Anesthesia, blood, oxygen, operation theatrecharges, surgical appliances, medicines, drugs,diagnostic materials, X-ray, Dialysis,chemotherapy, Radio therapy, cost of pacemaker, Artificial limbs, cost or organs andsimilar expenses. Sum InsuredThe Sum Insured offered may be on an individualbasis or on floater basis for the family as a whole. Cumulative Bonus ( CB)2 Health Insurance policies may offer CumulativeBonus wherein for every claim free year, the SumInsured is increased by a certain percentage at thetime of renewal subject to a maximum percentage(generally 50%). In case of a claim, CB will bereduced by 10% at the next renewal.Cost of Health Check-upHealth policies may also contain a provison forreimbursement of cost of health check up. Readyour policy carefully to understand what is allowed.Minimum period of stay in HospitalIn order to become eligible to make a claim underthe policy, minimum stay in the Hospital is necessaryfor a certain number of hours. Usually this is 24hours. This time limit may not apply for treatment ofaccidental injuries and for certain specifiedtreatments. Read the policy provision to understandthe details.Pre and post hospitalization expensesExpenses incurred during a certain number of daysprior to hospitalization and post hospitalizationexpenses for a specified period from the date ofdischarge may be considered as part of the claimprovided the expenses relate to the disease /sickness. Go through the specific provision in thisregard.Cashless FacilityInsurance companies have tie-up arrangementswith a network of hospitals in the country. If3

policyholder takes treatment in any of the net workhospitals, there is no need for the insured person topay hospital bills. The Insurance Company, throughits Third Party Administrator (TPA) will arrangedirect payment to the Hospital. Expenses beyondsub limits prescribed by the policy or items notcovered under the policy have to be settled by theinsured direct to the Hospital. The insured can taketreatment in a non-listed hospital in which case hehas to pay the bills first and then seekreimbursement from Insurance Co. There will be nocashless facility applicable here. Additional Benefits and other stand alone policiesInsurance companies offer various other benefits as“Add-ons” or riders. There are also stand alonepolicies that are designed to give benefits like“Hospital Cash”, “Critical Illness Benefits”,“Surgical Expense Benefits” etc. These policies caneither be taken separately or in addition to thehospitalization policy.A few companies have come out with products inthe nature of Top Up policies to meet the actualexpenses over and above the limit available in thebasic health policy. ExclusionsThe following are generally excluded under healthpolicies:a) All pre-existing diseases (the pre-existingdisease exclusion is uniformly defined by all nonlife and health insurance companies).4b) Under first year policy, any claim during the first30 days from date of cover, for sickness / disease.This is not applicable for accidental injuryclaims.c) During first year of cover – cataract, Benignprostatic hypertrophy, Hysterectomy forMenorrhagia or Fibromyoma, Hernia,Hydrocele, Congenital Internal diseases, Fistulain anus, piles, sinusitis and related disorders.d) Circumcision unless for treatment of a diseasee) Cost of specs, contact lenses, hearing aidsf) Dental treatment / surgery unless requiringhospitalizationg) Convalescence, general debility, congenitalexternal defects, V.D., intentional self-injury,use of intoxicating drugs / alcohol, AIDS,Expenses for Diagnosis, X-ray or lab tests notconsistent with the disease requiringhospitalization.h) Treatment relating to pregnancy or child birthincluding cesarean sectioni) Naturopathy treatment.The actual exclusions may vary from product toproduct and company to company. In group policies,it may possible to waive / delete the exclusions onpayment of extra premium. No short period policiesHealth insurance policies are not issued for less thanone year period.5

3.FAQs on Health InsuranceQ. What is Health Insurance?Ans. The term health insurance is a type ofinsurance that covers your medical expenses.A health insurance policy is a contract betweenan insurer and an individual /group in which theinsurer agrees to provide specified healthinsurance cover at a particular “premium”.Q. What are the forms of Health Insuranceavailable?Ans. The commonest form of health insurance policiesin India cover the expenses incurred onHospitalization, though a variety of products arenow available which offer a range of healthcovers, depending on the need and choice of theinsured. The health insurer usually provideseither direct payment to hospital (cashlessfacility) or reimburses the expenses associatedwith illnesses and injuries or disburses a fixedbenefit on occurrence of an illness. The type andamount of health care costs that will be coveredby the health plan are specified in advance.Q. Why is Health Insurance important?Ans. All of us should buy health insurance and forall members of our family, according to ourneeds. Buying health insurance protects us fromthe sudden, unexpected costs of hospitalization(or other covered health events, like criticalillnesses) which would otherwise make a majordent into household savings or even lead toindebtedness.6Each of us is exposed to various health hazardsand a medical emergency can strike anyone of uswithout any prior warning. Healthcare isincreasingly expensive, with technologicaladvances, new procedures and more effectivemedicines that have also driven up the costs ofhealthcare. While these high treatment expensesmay be beyond the reach of many, taking thesecurity of health insurance is much moreaffordable.Q. What kinds of Health Insurance plans areavailable?Ans. Health insurance policies are available from asum insured of Rs 5000 in micro-insurancepolicies to even a sum insured of Rs 50 lakhs ormore in certain critical illness plans. Mostinsurers offer policies between 1 lakh to 5 lakhsum insured. As the room rents and otherexpenses payable by insurers are increasinglybeing linked to the sum insured opted for, it isadvisable to take adequate cover from an earlyage, particularly because it may not be easy toincrease the sum insured after a claim occurs.Also, while most non-life insurance companiesoffer health insurance policies for a duration ofone year, there are policies that are issued fortwo, three, four and five years duration also. Lifeinsurance companies have plans which couldextend even longer in the duration.A Hospitalization policy covers, fully or partly,the actual cost of the treatment for hospitaladmissions during the policy period. This is a7

wider form of coverage applicable for varioushospitalization expenses, including expensesbefore and after hospitalization for some specifiedperiod. Such policies may be available onindividual sum insured basis, or on a family floaterbasis where the sum insured is shared across thefamily members.Another type of product, the Hospital DailyCash Benefit policy, provides a fixed daily suminsured for each day of hospitalization. There mayalso be coverage for a higher daily benefit in caseof ICU admissions or for specified illnesses orinjuries.A Critical Illness benefit policy provides a fixedlumpsum amount to the insured in case ofdiagnosis of a specified illness or on undergoing aspecified procedure. This amount is helpful inmitigating various direct and indirect financialconsequences of a critical illness. Usually, oncethis lump sum is paid, the plan ceases to remain inforce.There are also other types of products, which offerlumpsum payment on undergoing a specifiedsurgery (Surgical Cash Benefit), and otherscatering to the needs of specified target audiencelike senior citizens.Q. What is cashless facility?Ans. Insurance companies have tie-up arrangementswith several hospitals all over the country as partof their network. Under a health insurancepolicy offering cashless facility, a policyholder can8take treatment in any of the network hospitalswithout having to pay the hospital bills as thepayment is made to the hospital directly by theThird Party Administrator, on behalf of theinsurance company. However, expenses beyondthe limits or sub-limits allowed by the insurancepolicy or expenses not covered under the policyhave to be settled by you directly with thehospital.Cashless facility, however, is not available if youtake treatment in a hospital that is not in thenetwork.Q. What are the tax benefits I get if I opt for HealthInsurance?Ans. Health insurance comes with attractive taxbenefits as an added incentive. There is anexclusive section of the Income Tax Act whichprovides tax benefits for health insurance, whichis Section 80D, and which is unlike the section80C applicable to Life Insurance wherein otherform of investments/ expenditure also qualify forthe deduction.Currently, purchasers of health insurance whohave purchased the policy by any payment modeother than cash can avail of an annual deductionof Rs. 15,000 from their taxable income forpayment of Health Insurance premium for self,spouse and dependent children. For seniorcitizens, this deduction is higher, and is Rs.20,000.Further, since the financial year 2008-09, an9