Health insurance plans are a type of insurance coverage paying for health-related expenses. It can cover the costs of medicines, surgeries, hospitalization, day-care procedures, critical ailment treatments, and other medical expenditure the policyholder incurs.
Due to escalating healthcare costs, proper treatment for medical conditions can dent your savings. Also, when a crisis arises, unless you have the funds at hand, arranging for timely medical assistance can be challenging. Health insurance protects you from such financial strains. It ensures access to quality healthcare.
Importance of health insurance plan in India
A health insurance plan is essential in India because of escalating medical care costs. Medical inflation is increasing at double the rate of overall inflation. According to the Government’s 2018-19 Economic Survey, the average retail healthcare inflation rate is an alarming 7.14%.
Moreover, in India, the burden of lifestyle disorders is also growing.
Chronic health conditions such as heart problems, cancer, and liver diseases, need long-term follow-up therapies. Studies show that 85.42% of Indian households facing economic instability due to health expenses have a critical illness in the family
Unfortunately, in the matter of health insurance, India is underinsured. As per the National Sample Survey (NSS), over 80% of Indians do not have health insurance. The Insurance Regulatory and Development Authority of India (IRDAI) says that out-of-pocket spending on medical care is 64%.
The lack of health insurance causes Indians to dig into their savings, sell assets, or take loans to pay for medical expenditure.
Therefore, if an unforeseen medical concern crops up, the cost of hospitalization and adequate treatment can derail finances. The situation becomes more complicated if the person whose earnings sustain the household loses their income due to ill health.
Paying the small premium for a health plan insurance can help you avoid such financial uncertainty.
Why should you buy a health insurance plan?
From luxury expenses like foreign holidays to necessary expenditures like children’s higher education, the need for funds are many. Effective arrangement for such funds necessitates planned investments. However, you may have to spend a large portion of your income on basic amenities and immediate needs. It may leave a very little surplus for future requirements. Therefore, financial experts advise that before you consume your entire salary on day-to-day expenses, you should set aside a sum for the future.
The problem arises when the amount that you can save regularly is small in comparison to the funds that you may need later. Herein lays the need for wealth building, which grows the money you put aside. A money-saving plan helps in increasing your savings over time so that enough capital accumulates when the need for funds arises. Here’s a look at reasons for buying such plans.
Provides financial security
Medical emergencies arise unannounced. But the cost of quality healthcare is steep. Paying for the treatments from your savings can force your family to compromise with their living costs. Your children’s education or retirement funds can get affected.
A health insurance policy covers most medical expenses, such as:
Diagnostic tests
Doctor’s consultation charges
Hospital bills
Medicine prices, chemotherapy costs
Ambulance charges
Pre and post hospitalization
Thus, you can access appropriate treatment on time without risking your loved ones’ financial wellbeing.
Enables you to fight critical illnesses
Diseases like heart attack, stroke, liver damage, and nerve disorders are widespread these days. Sedentary lifestyles, poor eating habits, stress, and pollution have led to an increase in such diseases even in the youth.
Critical illness insurance policies reduce your financial worries for the treatment of such medical conditions.
Helps you get the best treatment
Most insurers reimburse costs incurred even when you undergo treatment in any hospital not having tie-ups with the insurance company.
Also, critical illness insurance allows you to undergo treatment at any hospital you prefer. You can use the upfront lump-sum payout in any way you choose.
Covers hospitalization expenses
All medical expenses may not be covered under health insurance plans. But you can opt for a daily hospitalization cash benefit with your base plan. It pays a fixed sum for each day of hospitalization. You can use the sum as per your need, covering extra costs excluded from your health cover
Acts as income replacement
Many medical policies offer regular incomes on the diagnosis of the diseases covered under the policy. Thus, your insurance policy serves as a livelihood if you need to take a career break due to poor health.
Takes over future premiums during ill health
Insurers offer premium waiver if your earnings suffer and you fail to pay your premiums due to failing health. Your policy stays in force.
Provides a safety net against accidents
Some health policy providers offer accident coverage, paying a lump sum in case of death or disability due to accident. The payouts provide financial relief to your family in their hours of need
Protects your family’s health
You can include your family members under your health plan, ensuring their speedy recovery with your health cover’s financial aid.
Reduces income tax
Health insurance premiums are deductible from your taxable income under Section 80D of the Income Tax Act, 1961. The payouts are also tax-free. Thus, buying a medical insurance plan can help you save on taxes. The table below displays the available tax deductions:
Members Covered
Tax Deductions
Total Tax Exemption
Self and parents below 60 years of age
₹25,000+₹25,000
₹50,000
Self below age 60 years and parents above 60 years
₹25,000+₹50,000
₹75,000
Self and parents both more than 60 years old
₹50,000+₹50,000
₹1,00,000
Arranges for transportation in medical emergencies
Illness or injury can strike when you are away from the scope of proper medical care. Your insurer can organize the transportation and equipment needed for the transfer to a reliable medical facility. Also, when your health condition becomes stable, your insurance partner arranges for your return home under medical supervision.
Important Features and Components of a Health Insurance Plan
The notable components of a medical insurance plan include:
Sum insured: The maximum amount you can claim against your medical expenses or the maximum payout the insurer guarantees on the detection of diseases covered.
Premium:The amount you pay to your insurer to enjoy the health cover, either at one go or throughout the policy period
Policy period: The duration through which your health cover remains active, and you can raise claims for health issues covered
Network hospital: Hospitals having tie-ups with your insurance companies, allowing cashless treatment on admission
Cashless treatment: Hospitalization without having to pay the bills yourself, on admission to the insurer’s network hospitals
Deductible: The amount you must pay from your resources before your insurer starts paying their contribution towards your medical expenses
Co-payment: The fixed percentage of medical bills you agree to pay yourself while the insurer pays the balance, effectively reducing the payable premium
No Claim Bonus: Increase in sum insured during policy renewal at no extra cost as a reward for a no-claim policy year
Daily Hospital Cash Allowance: Lump-sum amount paid for each day spent in the hospital subject to a minimum hospitalization period
Critical illness cover: Medical insurance against life-threatening, non-infectious health conditions, offering lump-sum payouts on diagnosis
Policy lapse: Termination of health covers on missing premium payment on time
Grace period: Timeframe the insurer permits for delayed premium payment after renewal due date before policy lapse
Waiting period:Time-gap from the policy start date before insurers start paying for claims
Policy revival: Reinstating your health policy, allowed within five years from the date of due premiums
How do health insurance plans work?
A health insurance policy is an agreement between you and your insurance provider. You agree to pay a fixed premium. In exchange, the insurer promises to pay for the healthcare costs covered under your plan, arising during the policy period.
Health insurance can be classified into two categories:
Mediclaim or indemnity medical policies
These policies pay the treatment costs up to the sum insured when you are admitted to a hospital. The amount paid depends on the actual expenses. You need to submit the hospital bills.
If the hospital is listed under the insurance company’s network, the insurer will directly settle the bills with your hospital. You need not bear any expense.
If you have to get admitted to any hospital outside your insurer’s network, you have to pay the bills yourself. The insurance company will later reimburse the expenses subject to your policy’s terms and conditions. But treatments at hospitals outside India are usually not included.
Critical illness insurance plans
Such health plans cover specific life-threatening ailments that often need prolonged treatment and regular check-ups. Examples of such non-infectious lifestyle diseases include heart attack, stroke, liver damage, and cancer.
These fixed-benefit policies provide a pre-decided lump-sum payout upfront on the first diagnosis of the listed diseases. You need not submit any medical bills. A medical test report proving the diagnosis suffices.
The payouts are based on the cover you choose and not on the actual expenses. Thus, you are free to undergo treatment from any hospital of your choice, even abroad. The monies help you meet costs such as
Doctor’s fees
Follow-up health check-ups
Medicines and dietary supplements
Physiotherapy and other rehabilitation treatments
Monitoring devices
You can also use the payout to fund your family’s living costs, EMIs, your children’s education fees, and more.
Who should buy health insurance plans?
Health insurance plans are a necessity today. The coverage opens the gates to quality medical care regardless of your family’s resources.
Therefore, if you have started earning, and want to protect your finances against rising healthcare costs, you must buy health insurance. You will stay financially prepared and free from anxiety in a health-related contingency. It can also maximize your tax savings.
How much health cover do you need?
The amount depends on the following parameters:
Age: At a younger age, you can settle for lower coverage. But health complications increase with age, increasing the chances of a health insurance claim. Hence, as you become older, the premiums also become costlier. However, with specific health insurance types like critical illness covers, regardless of age, the premium remains fixed. Thus, it is advisable to buy a sizeable coverage even at a young age.
Health: If you do not suffer from any health condition, low coverage might be acceptable. But with health issues like obesity or hypertension, odds of lifestyle diseases increase.
Also, even if you are healthy, look into your family’s medical history. Some diseases like diabetes are often hereditary and lead to complications like liver damage later. It is better to secure coverage against such ailments in advance.
Budget: An expensive medical policy that eats into your earning defeats the purpose of health insurance - safeguarding your finances. Hence, buy coverage with a premium you can service throughout the policy term.
What are the different types of health insurance plans offered by Kotak Life?
Kotak Life offers a fixed-benefit medical insurance plan, Kotak Health Shield. It covers both early and major stages of cancer and life-threatening medical conditions related to the heart, liver, and nerves.
On the diagnosis of the illnesses covered under the plan, you receive a lump-sum payout without the need for hospital bills. The policy also provides financial protection against death or permanent disability due to an accident.
The affordable premiums start from ₹300 for ₹10 lakhs sum assured.
You can select one or more from the following covers:
Cancer Shield
Cardiac Shield, including pacemaker implantation, angioplasty, open heart bypass surgery, heart attack
Live Shield, including liver cirrhosis, viral hepatitis, liver transplant
Neuro Shield, against coma, paralysis, stroke, brain tumour
Personal Accident Shield, covering an unfortunate demise or disability from an accident
You can also include your spouse under your plan and select add-on benefits such as:
Daily hospitalization cash allowance
Waiver of premium on the diagnosis of specified health conditions
Monthly income benefit at major stages of the diseases covered
The policy provides an all-round solution for your healthcare needs through in-built wellness benefits such as:
Option for second medical opinions
Option for second medical opinions
Medical repatriation to your homeland
Medical repatriation to your homeland
Medical monitoring of treatment
Anyone between 18 and 65 years of age can avail of this health insurance plan. Coverage remains active up to the age of 75 years.
How to buy the best health insurance plan for your family?
While choosing a health insurance plan, you need to weigh in the following factors:
The right policy type:
Assess your healthcare needs. If your family members depend on you financially, you need health covers for them too. However, including elderly parents in family floater plans can make the premiums costly. The price depends upon the age of the oldest member covered. Hence, picking a joint cover for yourself and your spouse, buying separate plans for your parents could be cost-effective.
Also, if your health status or family’s medical history increases the risk of lifestyle diseases, consider buying critical illness insurance
The coverage amount:
Select a plan that offers comprehensive coverage as per your age and health.
Also, if your profession involves working in hazardous conditions or frequent travels, an accident protection shield could prove valuable.
Premium rates:
Choose plans that provide the coverage you need at premiums that suit your budget. Also, select a premium payment frequency matching your cash inflow.
Policy term:
Need for health insurance increases with age. Buy a plan featuring a long policy term to enjoy coverage in your old age.
Add-on benefits:
For a nominal premium hike, you can extend your base cover to include:
Daily hospital cash allowance for expenses excluded under your plan
Premium waiver in case of inability to continue paying premiums due to poor health condition, keeping your cover active
Regular income to replace your earnings lost due to ill health, providing your family’s living expenses
In-built features:
Medical emergencies might need a quick transfer to suitable medical centres. If you fall ill away from home, you may need assistance to return. A family member’s presence during your illness could be invaluable. Opt for a plan that provides such useful facilities as a part of the base cover.
Exclusions:
Read the fine print carefully to understand if any expense is not covered under the plan. Compare brochures for health insurance online to locate the best offering.
Hospital network:
The extent of the insurer’s hospital network is the key to accessing medical care anywhere in India. However, when buying critical illness insurance, this need not be a concern since you can undergo treatment wherever you choose.
Insurer’s credibility:
A high claim settlement ratio (CSR) indicates a greater probability of your claim being honoured. For example, Kotak Life, scoring a CSR of 97.4% in FY2018-19, enjoys a long-standing reputation as a reliable insurance provider.
Age proof: Birth Certificate/ Passport/ Driving License/ Voter ID/ 10th or 12th class board examination mark sheet
Residential address proof: Aadhaar Card/ Passport/ Voter Card/ Driving License/ Ration Card/ Utility bills for electricity or telephone
Passport size photo
Conclusion
In India, the cost of medical facilities is skyrocketing. You would not want your family to suffer from monetary shortfalls due to a medical crisis. Hence, financial preparedness is vital to avoid burning a hole in your pocket due to medical emergencies.
Buying a health insurance plan with an adequate sum assured helps you avoid financial shortfalls in medical emergencies. Moreover, life-threatening medical conditions are rampant these days.
Kotak Health Shield provides financial cover against the most common non-communicable diseases in India at affordable premium rates. Invest in this health plan and remain stress-free about the financials in case of a medical contingency.
Reasons to Choose Kotak Life for Your Savings and Investment Plans
Kotak Life offers a fixed-benefit medical insurance plan, Kotak Health Shield. It covers both early and major stages of cancer and life-threatening medical conditions related to the heart, liver, and nerves.
On the diagnosis of the illnesses covered under the plan, you receive a lump-sum payout without the need for hospital bills. The policy also provides financial protection against death or permanent disability due to an accident.
The affordable premiums start from ₹300 for ₹10 lakhs sum assured.
You can select one or more from the following covers:
Cancer Shield
Cardiac Shield, including pacemaker implantation, angioplasty, open heart bypass surgery, heart attack
Live Shield, including liver cirrhosis, viral hepatitis, liver transplant
Neuro Shield, against coma, paralysis, stroke, brain tumour
Personal Accident Shield, covering an unfortunate demise or disability from an accident
You can also include your spouse under your plan and select add-on benefits such as:
Daily hospitalization cash allowance
Waiver of premium on the diagnosis of specified health conditions
Monthly income benefit at major stages of the diseases covered
The policy provides an all-round solution for your healthcare needs through in-built wellness benefits such as:
Option for second medical opinions
Medical evacuation from areas lacking healthcare facilities
Medical repatriation to your homeland
Compassionate visit of a relative during illness
Medical monitoring of treatment
Anyone between 18 and 65 years of age can avail of this health insurance plan. Coverage remains active up to the age of 75 years.
FAQs
What is Health Insurance?
Health insurance is a type of insurance product covering medical expenses incurred due to health conditions covered under the plan. Health insurance policies take the financial burden out of quality healthcare, allowing you to access adequate treatment. Thus, it secures your family against any cash crunch arising from unforeseen health-related expenses.
What is Kotak Health Shield?
Kotak Health Shield is a fixed benefit health insurance plan from the Kotak. It offers coverage against:
Cancer
Cardiac problems
Liver diseases
Nervous system disorders
Accidents.
On the first diagnosis of the diseases covered, the plan pays a pre-decided lump-sum amount upfront. You need not furnish any hospital bills. The policy offers further add-on benefits to increase your base cover for a minimal price, such as:
Daily Hospital Cash Allowance
Premium Waiver.
Income replacement
What are the top benefits of health insurance?
Financial security:Meeting expensive treatment costs out-of-pocket can strain your savings, often needing loans or sale of assets. Health insurance covers the medical expenses, keeping your savings intact. It can also serve as an alternate income source in income loss due to illness.
Access to quality healthcare: In a medical emergency, arranging for the necessary funds at short notice can be challenging. Health insurance foots the bills, allowing timely access to the right treatment.
Tax savings: You can claim benefits on the premium you pay for your health plan.
What are the tax benefits of health insurance?
The premiums you pay for your health insurance policy are deductible from your taxable income under Section 80D of the Income Tax Act, 1961. You can claim deductions up to ₹25,000 if you are less than 60 years of age. A senior citizen over 60 years old can avail up to ₹50,000. You can also claim the benefits if you pay for your parents’ medical policies.
Health insurance payouts are also tax-exempt.
Is a medical test compulsory to buy Kotak Life plans?
Kotak Health Shield is a critical illness health insurance plan from Kotak Life offering a lump-sum payout on the diagnosis of the diseases covered. No medical tests are needed to buy this plan. Only when you raise a claim, you need to furnish the diagnostic test report confirming the disease’s detection.
Which illnesses are covered under Kotak Health Shield?
Kotak Health Shield covers the four most common non-communicable critical illnesses in India:
Cancer
Heart problems
Nerve disorders
Liver diseases
The policy also offers financial protection against death or permanent disability due to an accident.
⦁ How can I buy a Kotak Health Shield Plan?
You can buy the Kotak Health Shield Plan following the steps below:
Decide on the coverage amount and whether you want to include your spouse under the plan
Select the sum assured if you opt for the Personal Accident Shield coverage
Select a policy period
Pick a premium payment term (one-time or throughout policy term)
Choose the premium payment frequency between monthly and yearly alternatives
Get in touch with expert Kotak Life advisors to help with your purchase via
What are the various savings and investment plans offered by Kotak Life?
Kotak Life offers a wide variety of investment and savings plans. Such plans cover every financial need from wealth creation, income generation, to tax planning. The types of plans include:
Endowment policies like Kotak Classic Endowment Plan, Kotak Premium Endowment Plan
Money-back plan like Kotak Premier Moneyback Plan
ULIP like Kotak Invest Maxima
Income plan like Kotak Assured Income Accelerator, Kotak Premier Income Plan
Guaranteed savings plan like Kotak Assured Savings Plan, Kotak Guaranteed Savings
Limited pay plans like Kotak SmartLife, Kotak Platinum Plan (ULIP)
One-time investment plans like Single Invest Plus, Single Invest Advantage
Double-life protection plan like Single Invest Plus
Top-up ULIP like Kotak Ace Investment>
Low-income support plan like Sampoorn Bima Micro-Insurance
How to buy the best savings and investment plan in India?
The features that decide the best saving policy include:
High yields – When investing in the money market, look for plans that offer diverse fund types and the option to switch among funds with changing market scenario. It will help in maximizing returns. Also, when investing in traditional plans, opt for those that offer guaranteed boosts to your capital.
Low cost – Look for plans that charge the least for handling your funds.
Reliability –The provider must be financially strong enough to be able to meet all claims. Also, a company with a robust claim settlement record promises surety about your claim being cleared
In India, Kotak Life Insurance meets all these parameters.
Offering 6 fund types to choose from and the liberty to switch, the ULIPs from Kotak present substantial growth potential.
Guaranteed income and guaranteed additions lead to capital appreciation in traditional plans.
Some plans require zero premium allocation charges.
With a CSR of 97.4% in the FY 2018-19 and a solvency ratio of 3.02 for the year ending on March 2019, Kotak Life occupies a position of trust in the Indian insurance sector.
Therefore,you can remain stay stress-free about your investments with a Kotak savings and investment plan.
Related Insurance Plans
Kotak Health Shield
Health is the greatest blessing for all human beings. Today, every individual is aware that the number of illnesses are increasing day by day and so are the related costs for treatment. For most, treatment in the best facility could lead to a dent in the pockets while for some it may lead to selling assets and mounting debts. Therefore, it is important to plan for your health emergencies before it is too late.
