What are the documents required for buying a health insurance plan?

We all know that we undertake certain risks at different stages of life. Life is full of unexpected outcomes and uncertain events. The probability of occurrence of an event causing losses is beyond human control and can happen quite often. A simple risk mitigation framework suggests absorbing certain risks where the frequency is less. And the framework strongly recommends transferring certain risks where the frequency is uncertain, but the impact is substantial. 

One such uncertainty is a medical emergency, i.e., risk of a health problem. You may suffer a significant loss, sometimes beyond their financial capacities to bear the cost of the same. It is practically impossible to undo the act emerging from a health crisis, but you can always aim to minimize the impact of such uncertainties and secure a financial future. That’s where Health Insurance comes in handy.

What is an insurance contract?

It is a contract or agreement between the insured and the insurance company (insurer) where the insurer agrees to pay a fixed, amount of money determined in advance to you in the event of an uncertain casualty leading to a loss to the insured. You must have a pecuniary and a primary interest in the insured to avail the benefits of the insurance policy. This arrangement is put in writing and is known as the ‘insurance policy’. An insurance policy is a document capturing all the terms and conditions agreed between the two parties to the insurance contract. 

A health insurance plan is a simple arrangement between two parties; the insurance company promises to cover the risks of the insured in exchange for payment of a small premium to get the risk covered. Insurance is thus a device to transfer the losses to a third party by paying a small amount as premium to the insurance company. The trigger in this arrangement is an uncertain event. If there is an occurrence of an uncertain event, then the insurance company makes good the losses caused to the policyholder; based on the agreement. 

Why Health Insurance?

Cashless Hospitalization, covering hospital and transportation charges, variety and customized health insurance plans, financial security and stability, cashless access to the treatment, coping up with medical inflation, benefits of No Claim Bonus (NCB), rebates in taxation and other added benefits are some of the advantages of the health insurance plan. 

Such significant benefits make health insurance product, a must-have in the insurance plan of every individual.

Documents required for buying health Insurance:

Buying health insurance is of paramount importance, but what is the operational process to purchase the same? With the advent of technology, there has been a digital solution to almost everything available. Digitization has improved the access to goods and services and has successfully interlinked the information. We have provided a list of documents required to purchase a health insurance plan. 

1. Address proof

The following documents can be considered as a proof of residence of the insured.

i. Passport;

ii. Bank Statement / Passbook;

iii. Post Office Account Statement / Passbook;

iv. Ration Card;

v. Voter ID

vi. Driving License

vii. Government Photo ID cards/ service photo identity card;

viii. Electricity Bill (not older than three months);

ix. Water Bill (not older than three months);

x. Telephone Landline Bill which is not older than three months;

xi. Property Tax Receipt (not older than one year);

2. Age Proof

Age proof is required to ensure whether the insured is legally eligible to buy a health insurance policy and to check the proper age of the policy buyer. Insurance being a contract, can only be entered into by adults who are competent to enter into a legal agreement. Age becomes a vital factor in calculating the financial cost of the insurance policy. Age is an essential input in the actuarial calculation of the premium and the insurance coverage of the insured. The insured can choose to submit any of the following documents as proof of age.

i. Aadhar Card / E-Aadhar;

ii. Election Photo Identity Card (EPIC) issued by the Election Commission of India;

iii. Photo PAN Card issued by the Income Tax Department;

iv. Driving License issued by the Transport Department of concerned State Government

v. Copy of an extract of the service record of the applicant (only in respect of Government servants) or the Pay Pension Order (in respect of retired Government Servants), duly attested/certified by the officer/in-charge of the Administration of the concerned Ministry/Department of the applicant;

vi. Birth Certificate issued by the Registrar of Births and Deaths or the Municipal Corporation or any other prescribed authority, whosoever has been empowered under the Registration of Birth and Deaths Act, 1969 to register the birth of a child born in India;

vii. Transfer/School leaving/Matriculation Certificate issued by the school last attended/recognized educational board;

viii. Policy Bond issued by the Public Life Insurance Corporations/Companies having the DOB of the holder of the insurance policy;

ix. A declaration given by the Head of the Orphanage/Child Care Home on their official letterhead of the organization confirming the DOB of the applicant.

3. Identity Proof

Identify proof is to verify the name with the person’s picture. There are many instances of fake IDs. Therefore it is imperative to verify that the same person as per the documents submitted is availing the benefit of the insurance policy. Any of the following documents can be submitted as a proof of identity:

i. Election commission ID card;

ii. Passport;

iii. Ration card with photo;

iv. Income Tax PAN card;

v. Smart card;

vi. Current passbook of the post office/scheduled bank having the photo of the holder;

vii. Aadhar card;

viii. Pensioner card having photo;

ix. Kissan passbook having photo;

x. Freedom fighter card having photo;

xi. Photo identity cards issued by recognized government institutions.

4.     Medical Reports

To ensure that the insured is physically fit and medically eligible, the insured submits the medical reports to the insurance company. Normally, the insured is asked to take the medical tests at a medical center authorized by the insurance company. The medical condition of the policyholder is of paramount importance as it ascertains the risks that the company is taking to provide the risk insurance. The insured must disclose all the medical information to the insurer as Insurance is a contract of utmost good faith. The insurer must disclose his age, medical complications if any, and smoking/drinking habits if any. The insurer can submit the medical check-up report before entering the contract. Even if the medical test is being conducted, it behooves upon the insured to disclose any lifestyle problems like diabetes and hypertension to the insurance company. Also, if the insured is genetically prone to any hereditary diseases, it is mandatory to disclose to the insurance company.

5.     Others documents (general)

i. Passport size photograph;

ii. Income/salary certificate;

iii. Bank details;

iv. office address, if any

v. BMI index or the Body Mass Index

There are various types of health insurance plans available, depending on the need of each customer. With so many insurance providers, the consumers have benefitted from the competition. Here are some to name a few for easy reference;

1.     Basic Health Insurance plan

This policy covers only an individual. The risk factors depend solely on the individual’s medical/financial history. The policy can be selected and customized as per the policy buyer’s preference, and the policy amount can be claimed in emergency cases.

2.     Critical Illness plan

In this type of policy, the insurer is liable to pay a lump sum amount to the Nominee of the insured if the policy buyer is diagnosed or deceased by the illness mentioned in the insurance policy.

3.     Maternity Health Insurance

The insured will avail the benefits of Insurance during and after pregnancy. The benefits include the care of the newborn, ambulance charges, doctor’s fees, laboratory tests and actual delivery changes; both normal and caesarean.

4.     Senior Citizen plans

This policy is bought by the senior citizens to cover the medical expenses in their older age. They get tax benefits and can avail lifelong renewability.

5.      FAMILY FLOATER PLAN:

In family floater plans, a single premium covers an entire family. The policy can be claimed at any situation like requirements for hospitalization. 

It is very important to submit the right set of documents initially to avoid any mishaps and rejections at the time of filing the insurance claim. 

A claim process can be tiring if there is no proper documentation. With the advent of technology, paperless claim facilities have been helpful to many policyholders. However, basic documents that are required at the time of filing the insurance claim are as under;

• Claim form duly filled and signed by the applicant;
• Doctor’s prescription;
• Discharge card issued by the hospital;
• Final hospital bill;
• Other relevant Medical investigation reports
• Medicine bills with the supporting prescriptions
• Other bills or documents related to the treatment
• Any high value equipment purchased for the surgery

2. Is medical insurance in India beneficial or is it a scam?

Medical insurance has been an important part of financial planning for all individuals. In fact, it is always advisable that your financial plan should begin with medical insurance. However, in India, there are huge agent commissions paid which may mislead the end consumer towards a wrong policy as a result of mis-selling. Medical insurance if not understood well, may lead to cash outflow without an equivalent benefit from the same. It cannot be termed as a scam as it is the need of the hour in times of health crisis and increasing medical costs with the rapid advancement of technology. 

3. What do I do if my health insurance claim is rejected?

Even if the claim is rejected, the insurance company sends out a letter informing about the repudiation of the claim and reasons for the rejection. The letter of repudiation highlights the specific terms and conditions which resulted in a failure to accept the claim. You will have to understand the reasons for non-acceptance and then file an appropriate written request again to the insurance company if the claim is legitimate. The matter may be escalated to the grievance department if it is not resolved at the earliest. If you are still unhappy, you also have recourse to the Insurance Ombudsman appointed by IRDA for such purposes.