India is set to overtake China as the most populous country by 2023, as per the UN’s World Population Prospects 2022 report. But despite rising population numbers and the importance of health of the population in fuelling the growth of a nation, India is among the countries with lowest health insurance penetration in the world. As per the data released by OECD, World Bank Data, CRISIL Research, HSIE Research, the penetration of health insurance (measured as the percentage of insurance premiums to GDP) in India in 2019 was a mere 0.4%, compared to 0.7% in China and 4.1% in the US.  

Some of the major factors behind the low health insurance penetration levels in India include low awareness levels, lack of affordability, and limited reach and availability of options for various segments of the population. Of these, the lack of financial literacy and low awareness levels about health insurance policies and related terms remain the top reasons why the vast majority in India fail to understand the importance of a health insurance policy, particularly in the face of rising healthcare costs and change in lifestyle leading to more health risks. While the Covid-19 pandemic has helped people understand the criticality of a comprehensive health insurance plan, there’s still more that needs to be done to create awareness about the way health insurance in India works and debunk many of the common myths and misconceptions that continue to plague customers about health insurance policies.  

Here’s a look at some of the common myths and misconceptions that people have about health insurance policies and why you need to understand them better to ensure your personal and financial well-being:  

Myth#1: Indian insurance companies do not give claims  

Most people refrain from buying health insurance policies because they fear that the process of claim settlement is a tedious one and that insurance companies do not settle claims easily. However, that is not true, the IRDAI annual report states that during the period of 2020-21, insurance companies settled around 95-97% of the insurance claims. Besides, many insurance companies also offer cashless claims, making the entire process more seamless and convenient for customers. 

For example, Reliance General Insurance’s health insurance policy has a 98% claim settlement rate and guarantees cashless claims within two hours. Also, in certain instances like for example the non-payable expenses, insurance claims might not cover the full expenses. Examples of non-payable claims include consumable, toiletries, cosmetics, convenience items, and certain non-medical charges among other things. However, you might be able to buy out of such covers at an additional cost.  

Further, insurance claims might be rejected in scenarios like going beyond the sum insured, or claiming insurance for diseases mentioned under the exclusion section, submitting incomplete documents, or non-disclosures, partial disclosures, and wrong disclosures of important details etc. But if all your paperwork is in place and properly filled then your claim will be processed without any hassles.  

Myth#2: Conditions like cancer and diabetes are not covered 

Cancer and Diabetes are covered in most of the health insurance policies available in the market. However, if the diabetes and cancer are existing prior to purchase of the policy, one may have to complete the pre-existing waiting period before the same gets covered. However, if the diseases are not pre-existing to policy purchase, there is no waiting period and gets covered right from diagnosis unless part of specific waiting list. Most health insurance policies today cover the major costs related to in-patient hospitalisation, diagnostic testing, and medication costs, among other things. Some health policies also provide these covers as add-ons, so it is best to check with your insurer about all the benefits offered under your policy before you sign up for one. You can also explore the possibility of reducing the pre-existing diseases waiting period by selecting suitable add-ons in your health insurance policies. If you have a family history of cancer or diabetes, you could also opt for a specialised health insurance cover meant specifically for these conditions.  

Myth#3: Corporate group health insurance plan provided by employer is enough 

People often think that the corporate group health insurance plan provided by their employers is enough to cover all their medical needs. However, not only do you lose the benefits under the group policy when you switch organisations, but most of these policies cover only the employee. So, if one wishes to extend the cover to his/her family members, he/she needs to pay an additional premium. A regular health insurance plan, on the other hand, provides you coverage without a break when you change jobs, while enabling you to enjoy all the benefits earned so far on successive in-time renewals of the policy. You can also opt for the Super Top Up health plan offered by the Reliance General Insurance which covers the balance amount payable for medical bills after you have paid the deductible, that is the fixed expense that you must pay despite having a health policy. You can buy this Super Top Up/top-up plan even if you do not have an existing health policy and they are relatively much cheaper.  

Myth#4: Health insurance in India is expensive 

Health insurance in India is perceived to be quite expensive, prompting many customers to avoid taking up a health policy for fear of the extra burden on their finances. Contrary to this popular belief, health insurance policies can be quite affordable to purchase. The IRDAI guidelines allow people to pay their policy premiums in quarterly and half yearly instalments.  

For instance, there are several insurance players in the market and Reliance General Insurance is one such leading insurance player that provides policies at an affordable pricing and with premium financing options similar to the ones offered while buying consumer goods at an electronic shop. Besides, you can also avail tax deductions on your health insurance premium payments, a fact that most people are unaware of. The Indian Government provides tax relaxation for health insurance premiums under Section 80D of the Income Tax Act, 1961.  

Myth#5: People who smoke and drink alcohol are not eligible for health insurance 

You may have often heard people say, ‘I am a smoker so I won’t be eligible for a health insurance plan’ or ‘I drink alcohol so I can’t avail a health policy,’ but neither of these statements are true. If you smoke or drink alcohol, you may have to pay a slightly higher premium for your health insurance policy, but you can still avail one. Some insurers may ask you to undergo a health examination before offering you a plan, but most insurance companies are only concerned with pre-existing medical conditions, which you must declare at the time of applying for the policy.  

Myth#6: Alternative treatments are not covered  

Alternative healthcare treatments like Ayurveda, Homeopathy, Unani, etc have a huge demand in a market like India. And to cater to this growing popularity of these alternative treatments, some insurance companies also offer cover for such healthcare treatments. Many of them often provide this cover on request by customers, so make sure to ask your insurer about the same. It’s important also that you read through all the terms and conditions thoroughly and get a clear understanding of what each of them implies before deciding on a healthcare plan. In 2012-13, IRDAI had issued a regulation, suggesting insurance companies start covering alternative healthcare treatments. The healthcare policies offered by Reliance General Insurance cover AYUSH treatment up to 100% of sum insured and have a vast network of cashless hospitals across the country.  

Myth#7: Hospital networks are available only in big cities  

Another common misconception surrounding healthcare insurance policies is that their hospital network is available only in large cities, but that isn’t true. Most insurance companies have a wide network of hospitals extending deep into the tier-2 and tier-3 cities across the country. At the hospitals covered under your insurers Hospital Network you can easily avail cashless treatment facilities and for hospitals not covered under your insurers hospital network you can opt for reimbursement. Reliance General Insurance, for example has a worldwide network of over 8,600 hospitals under its Super Top-Up Insurance plan, wherein the policy holders can easily avail cashless treatment facilities. It even covers for facilities like air ambulance when you are travelling abroad. And not just this, you can now avail the benefits of your health insurance policies in hospitals across the globe.