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Health Insurance In India

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Health Insurance In India

shape Introduction

Health insurance is the insurance that essentially coves all types of medical expenses. A health insurance policy is a contract between insurance and individual or group in which insurer agrees to provide specified health insurance cover in exchange of a regular “premium”. Since 1986 the health insurance industry has grown significantly due to liberalization and general awareness. By 2010, more than 25% of India’s population had access to some form of health insurance.The General Insurance Corporation and IRDA have even launched an awareness campaign for all segments of population to improve awareness and reduce procrastination for buying health insurance. Policies available under the health insurance cover both individuals and families.

shape Aspects

Aspects of Health Insurance

Tax Deductions :

  • Under section 80D of the income tax act, the insured person who takes out the policy can claim for tax deduction for the amount invested.


Payment Options :

  • Direct payment / Cashless facility here, the person does not need to pay the hospital as the insurer takes care of the all the treatment bills.

  • Reimbursement at the end of the hospital stay : after staying for the duration of the treatment, the patient can take a reimbursement


shape Cost

Cost and Duration

Policy price range: Insurance companies offer health insurance from a sum insured of Rs. 5000/- for micro-insurance policies to a higher sum insured of Rs. 50 lakh and above. The common insurance policies for health insurance are usually available from 1 lac to Rs. 5 lakh.

Duration: Health insurance policies offered by non-life insurance companies usually last for a period of one year. Life insurance companies offer policies for a period of several years

shape Policies

Types of Policies

Hospitalization Policy : Under such policies the insurer pays the total or partial amount of the insured person’s hospital bills.

Hospital Daily Casft Benefit Policy : Under this type of schemes daily ash benefits are offered to the policyholder in terms of a fixed amount for each day of hospitalization

Critical Illness Benefit : In the event of having critical illness, this policy is designed to mitigate expenses.

Employee’s State Insurance Corporation

Functioning under the aegis of Ministry of Labor and Employment and Incorporated under the ESI Act of 1948, the ESIC is a self-financing health insurance and social security scheme for all Indian workers earning less than ₹ 15000 per month as wages.

It is a contributory insurance scheme in which employer contributes 4.75% and employee contributes 1.75% of a total 6.5% of the wages earned. In return, the insured per on and their family are entitled to different types of benefits, both medical and cash. In addition to insured workers, poor families eligible under the Rashtriya Swasthya Bima Yojana can also avail facilities in ESI hospitals and dispensaries.

Recently there has been an increase in the role of information technology in ESI, with the introduction of Pehchan smart cards under the corporation’s ‘Project Pancftdeep’, India’s largest e- governance project.