Paul Sanchez
There are several types of insurance available in India, including health insurance, travel insurance, and life insurance. The Indian government offers a health insurance scheme called Pradhan Mantri-Jan Arogya Yojana (PM-JAY) that covers hospitalisation expenses for eligible families. Private companies also offer health insurance plans that can be purchased online. When buying health insurance, it is important to compare different plans and choose the one that best suits your needs. Travel insurance is also widely available in India, with companies like Tata AIG offering comprehensive coverage for domestic and international trips. Life insurance is another type of insurance that is regulated by the Insurance Regulatory and Development Authority of India (IRDAI), which also provides information and assistance to consumers through its website.
| Characteristics | Values |
|---|---|
| Cost | Health insurance plans can be bought for as little as ₹10/day or ₹24.8/day. |
| Coverage | Health insurance covers emergency and planned expenses for hospitalisation, day-care treatments, surgeries, pre and post-hospitalisation, and ambulance charges. Travel insurance covers medical emergencies, hospitalisations, trip delays, cancellations, baggage loss and more. |
| Application Process | Applications can be made online or through an approved enrollment partner, such as an insurance company or online health insurance seller. |
| Documentation | For health insurance, KYC documents may be required. For travel insurance, documentation in the event of a loss includes the policy number, bills, invoices, hospital certificates, prescriptions, medical reports, and, in the event of death, an official death certificate. |
| Benefits | Health insurance offers tax savings. Travel insurance provides peace of mind and helps deal with the financial implications of accidents or illness while travelling. |
| Government Schemes | The Pradhan Mantri-Jan Arogya Yojana (PM-JAY) aims to create a system of demand-led healthcare reforms to meet the immediate hospitalisation needs of eligible families in a cashless manner. |
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What You'll Learn
Understanding the different types of insurance
There are two main types of insurance in India: life insurance and general insurance (also known as non-life insurance).
Life Insurance
Life insurance is a financial contract between you and an insurance company. The insurer agrees to pay your beneficiaries a lump sum in the event of your death. This lump sum is known as the death benefit sum. Your beneficiaries can use this money to cover their everyday expenses and fund their long-term goals. In exchange, you must pay a fee to the insurance company, known as the premium, which can be charged as a one-time payment or in instalments.
Life insurance can be further divided into different types, depending on the nature of the benefit provided. Term insurance is the most common type of life insurance and is also the least expensive. In this case, your beneficiary will receive the death benefit sum if you die during the policy period. However, if you live beyond the policy term, you will not be eligible for any payments, unless you select the Return of Premium (ROP) rider, which entitles you to a refund of all premiums paid. Endowment life insurance programs provide a death benefit and can also offer assured maturity benefits.
General Insurance
General insurance refers to any insurance policy that does not insure life. It covers a wide range of risks that people may encounter in their daily lives and provides financial compensation for losses other than death. General insurance can be further classified into four types:
- Health insurance covers the costs of medical care and treatments. It either pays or reimburses the amount paid towards the treatment of any illness or injury. It can also cover resident treatment and pre-hospitalisation expenses.
- Motor insurance offers financial protection for your vehicles from loss due to accidents, damage, theft, fire, or natural calamities. It can cover individually owned cars and bikes, as well as commercial vehicles.
- Home insurance provides financial protection for your home and its contents in the event of damage or destruction due to natural or human-made calamities, such as fire, burglary, or rioting.
- Travel insurance covers the hazards associated with travel, including airline or baggage delays, passport or baggage loss, emergency medical expenses, and flight cancellations. It provides peace of mind and financial security during your journey.
Other Types of Insurance
In addition to the two main types of insurance, there are various other specific types of insurance available in India, such as children's education insurance, marine insurance, and fire insurance. Pocket insurance is another option, which offers small-ticket insurance at affordable premiums. Examples include dengue cover, hospital cash cover, and mobile screen insurance.
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Choosing a provider
With 25+ health insurance providers in India, you have the flexibility to choose an insurer with the best coverage and benefits for your needs.
Customer Service
When buying health insurance, it's important to consider the customer service reputation and the ease of the claim process. Opt for an insurance company that provides round-the-clock customer support and requires minimal TPA intervention and paperwork. Check customer reviews and ratings to gain an understanding of the actual reputation of the company and the problems other customers have faced during claims.
Network Hospitals
It's crucial to consider the network hospitals (both in-patient and out-patient facilities) available with each insurance provider as it directly impacts the convenience, cost, and quality of healthcare services available to policyholders. Every health insurance company provides cashless hospitalization, but this is only applicable in their network hospitals. Almost every health insurance company provides cashless health insurance plans, so check the insurance company's network of empanelled hospitals and pick a plan with a large network of hospitals in your area.
Claim Settlement Ratio
The claim settlement ratio tells you about the percentage of claims settled by an insurer during a specified period. A higher ratio means the insurer settles more claims. A claim settlement ratio of 90% and above is stellar, 80-90% is decent, and anything less than 80% is a no-go.
Affordability
Understanding the affordability criteria set by the insurer or employer is essential to ensure that the health insurance premium remains manageable and fits within your budget constraints. The premium will depend on several factors, including the plan you choose, your age, city, sum insured, pre-existing diseases, policy coverage, and number of people covered.
Coverage
Compare the coverage offered by various plans, including OPD cover and home treatment. Check the variety of mediclaim policies offered by an insurer, including whether they offer customized plans for different people, such as senior citizens, and disease-specific plans.
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Comparing policies
Comparing insurance policies is a crucial step in choosing the right one for your needs. Here are some detailed tips for comparing policies when applying for insurance in India:
Types of Insurance
Firstly, it is important to understand the different types of insurance available. In India, the four most common types of insurance are motor insurance, health insurance, life insurance, and term insurance. Motor insurance is further divided into three categories: third-party liability cover, comprehensive cover, and stand-alone own-damage cover. Health insurance provides financial assistance for hospitalisation and treatment costs, and there are various types of health insurance plans to choose from, including individual, family, critical illness, senior citizen, and maternity health insurance. Life insurance, on the other hand, offers financial protection to the policyholder's family in the event of their untimely death, while term insurance can provide long-term financial security.
Factors to Consider
When comparing insurance policies, there are several key factors to consider:
- Reputable Insurers: Evaluate the reputation and track record of the insurance company. Opt for insurers with a long history of consistent performance, as this indicates stability and reliability.
- Coverage: Assess the scope of coverage offered by the policy. Look for policies that cover pre-existing conditions, hospitalisation expenses, accident cover, and other specific needs you may have.
- Inclusions and Exclusions: Understand what is included and excluded in the policy. Check for additional benefits such as pre- and post-hospitalisation coverage, COVID-19 coverage, and day-care treatment.
- Network Hospitals: Verify that the insurance company has a wide network of hospitals, including prominent medical facilities near your location. This ensures cashless claims and direct claim settlements.
- Premiums and Sum Insured: Compare premium rates and the sum insured offered by different policies. While a lower premium may be attractive, ensure that the coverage is not compromised. Opt for a policy with adequate sum insured to provide substantial financial assistance when needed.
- Riders: Consider adding riders to your health insurance policy for additional coverage. Critical illness riders, for instance, offer enhanced protection and exclusive features like a child education fund.
- Customer Reviews: Read reviews from customers who have experience with the insurance company. This can provide insights into their claim settlement processes and their ability to resolve insurance-related queries.
Online Comparison Tools
To simplify the process of comparing insurance policies, you can utilise online platforms such as ComparePolicy, PolicyBazaar, InsuranceDekho, and PolicyX. These websites allow you to compare policies based on various factors, including features, benefits, coverage, and premium rates. They provide unbiased information, instant quotes, and user-friendly interfaces to help you make informed decisions when choosing an insurance plan that best suits your needs.
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Required documentation
When applying for insurance in India, the required documentation will vary depending on the type of insurance and the provider. Here is an overview of the documentation required for different types of insurance:
Health Insurance
The National Health Authority of India offers the Pradhan Mantri-Jan Arogya Yojana (PM-JAY), which provides cashless treatment and covers hospitalisation expenses for eligible families. To enrol in PM-JAY, you can search for local organisations that can help with the application process, or you can apply through an approved partner, such as an insurance company.
Policybazaar is another platform that allows users to compare and buy health insurance policies online. No medical examinations are required, and payment can be made online. Policybazaar also offers health insurance for Non-Resident Indians (NRIs), covering medical expenses incurred by NRIs and their families in India. To buy or renew health insurance in India, you may need to provide Know Your Customer (KYC) documents.
Travel Insurance
Tata AIG offers travel insurance plans that can be purchased online. Their travel insurance benefits include medical coverage for international travel, including protection for COVID-19-related emergencies. Additionally, for travel to the Schengen region, Tata AIG provides mandatory Schengen travel insurance, which covers medical emergencies, hospitalisations, trip delays, cancellations, and baggage loss.
In the event of a loss covered by travel insurance, Tata AIG requires the following documentation:
- Travel insurance policy number
- Bills, invoices, hospital certificates, and prescriptions for calculating medical expenditures
- Preliminary medical report describing the nature and degree of injuries or diseases with a specific diagnosis
- If another party was involved (e.g., in an accident), provide their name, contact information, and insurance information (if available)
- In the event of death, an official death certificate, succession certificate, and legal papers verifying the identity of beneficiaries
- Age proof (where applicable)
- Other details as requested by Tata AIG to process the insurance claim
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Claiming on your insurance
When it comes to claiming on your insurance in India, the process can vary depending on the type of insurance and the nature of the incident. Here is a detailed guide to help you navigate the process:
Vehicle Insurance Claims
If you are involved in a car accident or your car is stolen, the first step is to inform your insurance company as soon as possible. You will need to submit a duly filled and signed claim form, along with the relevant documents, which may include:
- A copy of your car insurance policy
- A First Information Report (FIR) from the police
- A copy of your driving licence
- Repair bills or cash receipts
- A copy of your car's Registration Certificate (RC)
The insurance company may send a surveyor to assess the damages and prepare a report. Based on this report, your car will be sent for repairs. If you opt for a reimbursement claim, you will need to submit the repair bills and invoices immediately to get reimbursed. Keep in mind that the process for third-party car insurance claims is different and must be filed with the Motor Accident Claims Tribunal (MACT) in the area where the accident occurred or where the claimant resides.
Health Insurance Claims
For health insurance claims, the first step is to notify your insurance company as soon as possible after hospitalization. You can do this by calling their customer care helpline or sending an email. They will provide you with a claim intimation number, which you will need during the claim process. The next step is to submit the required documents, which typically include:
- Your policy document
- A claim form
- A medical certificate from the treating doctor
- Hospitalization bills
- Diagnostic reports
Ensure that all the information provided is accurate and complete to avoid delays or rejections. After verifying the claim documents, the insurance company will process the reimbursement and credit it to your bank account, depending on the terms and conditions of your policy.
General Tips for Claiming on Your Insurance
Regardless of the type of insurance, there are a few key things to keep in mind when making a claim:
- Always inform your insurer at the earliest, as most policies have a deadline for making a claim.
- Provide accurate and complete information to avoid delays or rejections.
- Keep all your documents in order, including repair bills, medical reports, and any other relevant paperwork.
- For vehicle insurance claims, gather evidence such as photos and witness statements to support your claim.
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Frequently asked questions
The process of applying for health insurance in India varies depending on the provider. However, some providers such as Policybazaar allow you to compare and buy health insurance policies online.
Some health insurance providers in India include Policybazaar and Tata AIG.
Having health insurance in India can provide financial cover for medical expenses, including hospitalisation, day-care treatments, surgeries, and ambulance charges. It also offers tax savings under Section 80D of the Income Tax, 1961.
Yes, the Indian government has launched the Pradhan Mantri-Jan Arogya Yojana (PM-JAY) scheme, which aims to provide cashless treatment and protect families from financial shocks due to hospitalisation expenses.
