5 Things You Must Know About Individual Health Insurance Plans

  Author: Naveen Kumar

Individual health plans (IHP) are also known as traditional health insurance plans or by their popular name, ‘mediclaim’. With rising medical costs, a medical emergency can make a big dent on your finances and hence buying a mediclaim policy is very crucial. That is why it is important for you to know about these five things related to individual health insurance plans.

Covers most hospitalisation expenses IHP is a health insurance plan that usually covers most hospitalisation expenses of an individual. Of course, you need to be admitted in the hospital for at least 24 hours. Expenses such as hospital room rent, surgeon’s fees and charges for operation theatre are covered in this plan.

May or may not have sub-limits IHP may or may not have sub-limits in the various expense heads listed for coverage. The sub-limits are ceilings of expenses till which you are entitled reimbursement by the insurance company.

Typically don’t cover pre-existing diseases Pre-existing ailments are typically not covered for the first four years of buying the policy. Similarly, claims for certain ailments might not be provided during the first or second year of the policy.

Covers other family members Other family members could be added to an individual health plan. This typically includes spouse, children up to 25 years and parents. Each family member gets separate health insurance limits. You may get discounts of 10-15 per cent on adding family members to the policy.

No claim bonus For every year you don’t make a claim from the policy, most insurance companies provide an additional 5 per cent to the sum insured as coverage.

Over and above the benefits that we have just mentioned there are tax benefits. You get tax annual tax deductions of upto Rs 25,000 for self and family under Section 80D. You can also eligible for tax deduction of another Rs 25,000 for premiums of parents who are not senior citizens, taking the total tax deduction limit to Rs 50,000. If parents are senior citizens the limit goes up to Rs 30,000 and your overall limit to Rs 55,000.

An individual health plan is a must for everyone and should be one of the first things on your list of financial priorities. As discussed, the benefits of such a plan are many and not having one can be disastrous to your finances. So, it is smart to secure your family with an individual health plan and while this may not be a tax saving investment, you can still benefit from tax savings from this expense.

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