What is a Health Insurance Policy?

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Health insurance policies reimburse the medical expenses incurred for the policyholder and identified family members who are covered under the policy. This policy provides for reimbursement of hospitalization or domiciliary treatment expenses for illness or accidental injury up to the sum insured under the policy. The expenses that can be claimed, such as consultation fees, medicine and treatment costs, room costs, are specified in the policy and sub-limits may be fixed for each head. Claim is typically allowed only for “In-patient” (patients who are admitted in a hospital for treatment that requires at least overnight or 24 hours of stay in hospital) treatments and domiciliary treatments (patients can be treated at home when they are not in a condition to be moved to the hospital), according to the terms of the policy. Pre-existing illnesses may be excluded from cover for a fixed period when insurance is being taken for the first time or if it is being renewed after a lapse. Health policies provide cashless facility too where the bills are directly settled with the hospital and the insured is not required to pay upfront up to the sum approved for this facility. There is also the option to take a family floater policy that will cover multiple family members under the same policy up to the sum insured. The premium payable on the policy is a function of the sum insured, age and medical history of the insured, among others. Premiums may be adjusted for continued health cover and record of no-claim. Portability of health policies has been introduced under which the benefits of no-claim, bonus and time-bound exclusions for existing conditions can be transferred if the insured chooses to switch the insurance company. To benefit from portability, the previous policy should have been maintained without a break.

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