Pre-Existing Diseases To Sum Insured, Knowing Health Insurance Essentials, Premium Factors

By Sharad Bajaj

“Health is wealth”, the age-old adage holds importance in today’s time when keeping good health is not just an option but a necessity. You must be keeping yourself fit and healthy, but this is life — the most unpredictable thing under the sun! Hence, securing your health becomes non-negotiable. We are living in an era where there are many ailments and an escalating cost of healthcare, making it crucial for you to invest in health insurance for your financial well-being.

With health insurance, you can shield yourself and your family from financial uncertainties during a health emergency. Having healthcare insurance brings a sense of relief, easing the burden of potential healthcare expenses and reducing stress. Delving into the health policy jargon can feel like a daunting task, but knowing the essentials will help you make informed decisions.

Components of Health Insurance

Key Features: This includes the main benefits and coverage of the policy, such as Room rent category and limit, Co-payment (if applicable), modern treatment expenses, daycare procedures, domiciliary treatment, restoration benefits, No claim bonus etc. It also outlines the terms and conditions of the policy.

Member Covered: This refers to the individuals covered under the policy. It could be an individual, a family floater (covering self, spouse, dependent children), or even parents in some cases.

Pre-existing Illness Coverage (Waiting Period, if any): Pre-existing illnesses are those that exist at the time of purchasing the policy. The coverage for these illnesses is usually provided after a certain waiting period, which can vary from Day 1 to 4 years depending on the policy.

Sum Insured (Base, Bonus, if any): The sum insured is the maximum amount the insurer will pay for the medical expenses in a policy year. Some policies offer a bonus or increase in the sum insured for every claim-free year.

List of Blacklisted Hospitals: These are the hospitals that are not covered under the policy. Any treatment taken in these hospitals will not be eligible for a claim.

Disease Sub-limits and Associated Waiting Period: Some policies may have sub-limits on certain diseases, i.e., a limit on the amount that can be claimed for those diseases. There might also be a waiting period before these diseases are covered.

Premium Certificate (Section 80D): The premium paid for health insurance is eligible for tax deduction under Section 80D of the Income Tax Act. The premium certificate is proof of payment for claiming this deduction.

Policy Details (policy number, sum insured, etc.): This includes the policy number, sum insured, policy term, date of commencement, and other related details.

Claim Support Helpline: This is the contact number provided by the insurance company for any assistance related to claims.

Health Card (for some insurers): Some insurers provide a health card that serves as an identity card at the time of hospitalization. It may also contain important policy details and contact numbers.

Factors Affecting Premiums

Family Size: The number of family members included in the policy affects the premium. Generally, the more members you have in your policy, the higher the premium. Comprehensive family health insurance assists you financially when any family member gets hospitalised.

Age of Members: Age is a significant factor in determining health insurance premiums. As age increases, the risk of health issues also increases, leading to higher premiums. For example, a policy for a 25-year-old will be cheaper than a policy for a 65-year-old.

Current Pincode (City): The cost of healthcare varies by location. Cities often have higher healthcare costs compared to rural areas, leading to higher premiums. Additionally, some areas may have higher rates for certain conditions, which can also affect premiums. The premium of the policy is determined based on your location. You will have to pay a lesser premium if you are from a Tier 2 city compared to a person from a metro city.

Pre-existing Diseases: If any of the insured members have pre-existing medical conditions, the premium could be higher. This is because individuals with pre-existing conditions are more likely to need medical care.

Sum Insured: This is the maximum amount the insurance company will pay for claims. A higher sum insured means the insurance company is taking on a higher risk, which leads to higher premiums.

Add-on Opted: Add-ons are additional benefits you can opt for over and above your base policy, like critical illness cover, accident cover, etc. These increase the scope of your coverage but also lead to an increase in the premium amount.


By understanding the intricacies of health insurance components and premium determinants you can make decisions aligned with your needs and financial conditions. Adopting a proactive approach to healthcare, from preventive measures to prudent financial planning, not only safeguards your present but also strengthens your future.

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