Medical emergencies can strike anyone and anytime. To add to this are the rising medical costs that have the capability to dig a hole in your pocket. One way to overcome such hurdles is to be prepared by purchasing a health insurance plan. This insurance helps reduce economic worries by covering critical illness treatment costs, hospitalization costs and other such expenses.
What is Health Insurance?
Health insurance offers financial protection to meet the expenses incurred due to hospitalisation or treatment of some disease. It is an understanding signed between the insurance company and the policyholder. The company or the insurer agrees to provide the sum insured or the coverage amount to the policyholder (the insured) for meeting the medical expenses. To get this benefit, the insured has to pay a certain amount of money in the form of premium. However, not all kinds of situations and cases are covered by health insurance. These are called exclusions. Let us understand health insurance in detail.
What is Health Insurance Premium?
To get the financial protection under a health insurance plan, you need to annually pay certain amount of money in the form of premium. This can be called the cost of the insurance. Premium is an important aspect to be considered before finalising a plan. Always use the premium calculator available on the insurance company website or insurance web aggregators to know the premium amount. This helps to compare different plans and to gauge your affordability of buying the plan. Some of the factors taken into account while deciding the premium amount are:
Health insurance is available in various forms. However, all the health insurance policies can be broadly categorised under two types: indemnity plan and fixed benefit plan. Let us understand these two types in detail.
This plan covers hospitalisation expenses up to the limit decided during the purchase of the policy. An insured can opt for multiple claims in a year, but the total amount given should not exceed the maximum sum insured limit or the amount you are entitled to get from the insurance company. This plan type is also known as mediclaim policy. You also have the benefit of availing cashless treatment at various network hospitals, where the insurance company pays on your behalf.
Types of Indemnity Plans
1) Individual Insurance Plans: This type of health insurance is meant for an individual. Thus, the insurance provider covers only the medical expenses incurred by an individual. The treatment expenses covered in these plans usually include all the costs incurred through hospitalisation, pre and post-admission, charges for various medical tests and laboratory charges, and consultation charges. Since this risk cover is only for an individual, the premiums are cheaper than that of other plans. These individual mediclaim policies don’t cover any existing illnesses. However, after waiting for a certain period, these diseases might get covered by the insurance company. Many insurance policies do not cover ayurvedic, homeopathic or any other non-allopathic treatments.
2) Family Floater Insurance Plans: These types of insurance plans cover the entire family. Instead of buying different individual plans, you can get a family floater that would cover the medical and treatment expenses of all the family members. These plans include the policyholder, his/her spouse and children. Minor children up to 2 years can also be covered under this plan. Some plans also include siblings and in-laws. Family floaters can provide health coverage for up to 15 relatives in one single plan. Thus, all the family members share sum insured provided by the insurer.
3) Senior Citizen Insurance: These insurance plans cover medical treatment or hospitalisation expenses of individuals aged 60 years or more. Illness and other health-related problems after the age of 60 years are common. Retirement might also deprive people of any regular income. In such a situation, bearing all the medical expenses might be a big burden. Thus, senior citizen health insurance plans can help in meeting medical expenses during emergencies. It is mandatory by the IRDA that the policyholder must be at least 60 to 65 years while applying for the policy. Some of the insurance companies also make people undergo medical examination before sanctioning a policy. The waiting period for these policies can range from 1-4 years in case of certain illnesses.
4) Maternity Insurance: Maternity Insurance plans are specifically meant for women planning to have a child or are bearing one. It covers all the expenses before and after the pregnancy, the cost towards the child, mother’s care expenses, and any complications that might arise due to pregnancy. Such a plan can be added to the main Individual or Family Floater policy. Moreover, it can also be attached with the Group Insurance plans provided by the employers which have a sub-limit of up to Rs. 50,000. All the expenses related to tests, medicines, labour, and admission can be reduced by taking this plan.
Any emergency transportation due to pregnancy-related discomforts, expenses for delivery, nursing and consultation are also covered in this plan. It also includes the congenital or a critical disease diagnosed in the newborn. The waiting period is up to a maximum of 4 years, as only after that all the benefits can be availed. Hence it is advisable to purchase this plan well before conceiving. The exclusions include charges for regular checkups, diagnostic exams, and consulting fees, any medicines like vitamins, during the pregnancy.
5) Group Medical/Employee Insurance: Group Medical Insurance is provided by employers to their employees. The groups under such a policy include members of any associations, companies, etc. Moreover, by paying some extra amount, employees can also extend the plan to include other family members like spouses, children, parents, etc. Like other plans, the premiums paid under this plan are tax exempt. Some policies also cover existing diseases and maternity expenditures. Unlike other plans, to purchase the plan, employees don’t need to produce any documents or undergo any medical examinations. Also, the premiums are cheaper here. The plan can be contributory, where employees also pay a part of the premium, or non-contributory, where only the employer pays the premium.
Fixed Benefit Plan
This plan does not offer hospitalisation benefit. It pays a fixed amount for certain listed critical diseases and conditions, such as cancer, heart illnesses, etc. Under this plan, one also gets coverage on the diagnosis of certain diseases.
Types of Fixed Benefit Plans
1) Preventive Insurance: A preventive health insurance plan covers expenses for regular health checkups required to prevent any dangerous illness like cancer. For this, an annual medical examinations can be needed to analyse the possible symptoms. Such plans can provide coverage for any checkups done in a network hospital of the insurer. Expenses also cover all the preventive measures taken for the policyholder, spouses, children and parents. Children up to the age of 13 years are covered under this policy. Unlike other plans, this plan includes tests related to HIV/AIDS, cancer and cholesterol.
2) Critical Illness: Critical illnesses are ailments not included in health insurance plans. These are some specific conditions which can lead to permanent disability or death. Some of the diseases covered by the plan include cancer, organ transplant, and failure, multiple sclerosis, paralysis, blindness, strokes and heart attacks, kidney failure, coma, critical heart surgeries, among others. The policy provides a lump sum amount for the treatment of these diseases. This policy can be bought either separately or as an add-on with a life insurance plan. Under such a plan, if the policyholder is diagnosed with any of the critical illnesses included in the list within the tenure, he/she gets the claim benefit along with other benefits. Some companies also provide a daily allowance benefit because the policyholder is unable to work and earn income due the illness. Such plans usually have a lower waiting period.
3) Hospital Daily Cash Benefit: It offers fixed benefits, usually after 24-48 hours of hospitalisation. The coverage is over and above the benefits provided by a health insurance plan. This plan covers expenses usually not included in a health plan. You get a fixed amount every day during hospitalisation.
4) Personal Accident: The plan offers coverage against accidental death and permanent total and partial disability of the policyholder. Such a policy would be a great add-on with the motor insurance to cover the death or bodily injury to the driver. In case of an untimely demise of the policyholder, the plan also offers sum assured to the family members to take care of various expenses and needs. No health documents are required to purchase this policy. It can be availed for both individuals and group. Also, many policies cover all the legal and funeral expenditures apart from covering any harm caused due to terrorist attacks.
A Personal Accident cover can be classified into 2 types:
Individual Accident Cover: The plan covers an individual’s disabilities, dismembering of body parts or death due to an accident.
Group Accident Cover: It is provided by employers to cover the expenses of the employee’s families on his/her sudden demise.
Eligibility Criteria
Most of the insurance companies providing health insurance in India offer coverage to persons under the age of 45 years without any medical examination. They might ask details of any pre-existing diseases like diabetes or hypertension. However, those above 55 years need to undergo medical examination.
| Particulars | Details |
| Entry Age | Adults: 18-70 years; Dependent children: 90 days-25 years |
| Sum Insured | Rs 50,000-Rs. 6 crore |
What Health Insurance Covers?
Health insurance companies offer a plethora of plans and policies to choose from as per your need and requirement. You should understand the coverage well before opting for a particular plan and policy. Let us look at some of the common points covered by different plans offered by health insurance companies.
Pre- and post-hospitalisation expenses: This insurance pays for medical expenses incurred between 30 and 60 days before hospitalisation. These cover things like cost of medication and medical tests, etc. This is apart from the usual coverage like meeting the costs for hospitalisation of at least 24 hours, room rent, cost of surgery, etc. It also covers the medical expenses between 60 and 180 days after hospitalisation like that for medication, home treatment, etc.
Ambulance charge: Almost all health insurance plans cover the expenses related to ambulance service.
Day care charges: Some of the health insurance plans also cover the costs for treatments taken up without hospitalisation of up to 24 hours. These include cases like dialysis, radiotherapy, chemotherapy, etc.
Health check-ups: Some of the health insurance companies also cover the cost for preventive health check-ups.
Documents Required to Process Claims
In order to get the claims settled on time, certain specific documents are required.
Note: This is not an exhaustive list.
Claim Process
A health insurance policy helps manage any unforeseen medical expenses. Thus, in case of any eventuality, you need to properly file claims in order to get the benefit. There are two types of claims: cashless and reimbursement claims.
Cashless claims: To avail this kind of claim, you need to use one of the network hospitals, which is a hospital empanelled with the insurance company. Here, the policyholder does not have to pay the hospitalisation expenses as it is borne by the insurance company.
Let us understand the cashless claim process.
Reimbursement claims: Here, the policyholder makes the payment for the treatment and hospitalisation. However, he/she gets back the money later as per the sum insured amount after submitting the required documents.
Let us understand the reimbursement claim process.
Time Taken to Settle Claims
After receiving a claim request, a health insurance company usually takes 30 days from the day of receipt of documents to settle the claim. However, if there is any kind of investigation needed to process the claim, it usually takes 45 days to settle the claim from the time of receipt of documents.
Exclusions
Health insurance provides coverage for various kinds of medical expenses, treatments and illnesses to help you to manage your finances better. However, certain situations and cases are not covered by health insurance plans, though the list varies for different providers. Always understand these exclusions well before finalising a plan so that you do not face problems later. Let us look at some common exclusions.
Note: This is not an exhaustive list.
Companies Offering Health Insurance Policy in India
There are 27 insurance companies providing health insurance policies in India. Out of these, 6 are standalone health insurance providers. While selecting a company, check its latest Incurred Claim Ratio (ICR), which is the total claims paid by an insurance company compared to net premiums earned in a financial year. The names of the companies are:
| Aditya Birla Health Insurance | IFFCO Tokio General Insurance | Royal Sundaram General Insurance | |
| Religare Health Insurance | Kotak Mahindra General Insurance | SBI General Insurance | |
| Bajaj Allianz General Insurance | Liberty General Insurance | Shriram General Insurance | |
| Bharti AXA General Insurance | Magma HDI General Insurance | Star Health Insurance | |
| Cholamandalam MS General Insurance | Max Bupa Health Insurance | TATA AIG General Insurance | |
| Cigna TTK Health Insurance | National Insurance | New India Assurance | |
| Future Generali India Insurance | Raheja QBE General Insurance | Oriental Insurance | |
| HDFC ERGO General Insurance | Reliance Health Insurance | United India Insurance | |
| ICICI Lombard General Insurance | Universal Sompo General Insurance | ||
Important Aspects
Before finalising a particular health insurance company and a plan, it is important to keep certain points in mind so that we understand the policy well. Let us look at some aspects.
Claim Settlement Ratio (CSR): This is the percentage of claims settled compared to the percentage of claims received. Always go for a company with a high claim settlement record. This way you will be sure of the fact that your claims will be settled smoothly on time.
Limits: Understand the limits and caps on certain areas like that on room rent so that you know how much expenses you have to bear.
Coverage: Be clear of the coverage being offered in the plan so that you know whether your needs and requirements are being fulfilled or not. For instance, some plans do not cover non-allopathic treatment.
Waiting period: For certain pre-existing diseases, some insurance companies have a waiting period of few years before they get covered by the plan. Know these diseases before purchasing the plan.
Network hospitals: Opt for the insurance company that has a good number of network hospitals so that you can get cashless claim facility whenever needed and you don’t have to pay from your own pocket.
Advantages of Buying Health Insurance Policy
Health insurance forms an important part of one’s financial portfolio. Let us look at some of the benefits of the insurance:
Terms Related to Health Insurance
Let us look at some terms you should understand to know health insurance better.
Deductible: It is the amount paid by the insurer for certain items after which the health insurance coverage starts.
Co-payment: When the claim amount is shared between the policyholder and the health insurance company, a certain part of the claim amount is paid by the policyholder.
Sum insured: This is the maximum amount that the health insurance company is liable to pay to the policyholder in case of any eventuality.
Pre-existing diseases: These are the diseases that a policyholder suffers from before getting the health insurance coverage.
Waiting period: On buying a health insurance policy, coverage for certain diseases starts after few years. This duration is called waiting period.
Cumulative bonus: It is the bonus, also called no claim bonus, that you get to enjoy when you don’t make any claims in the previous policy year.
Home Loan Balance Transfer helps you reduce your EMIs by moving your outstanding loan from other financial institutes to the one which offers lower interest rate.
Home Loan Balance Transfer or Refinancing or simply Balance Transfer is the process that allows you to benefit from the lower interest rate offered by the other lender. If you have an existing outstanding home loan with one borrower, you can make a home loan transfer, that is, shift the remainder amount to a different borrower who charges a lower rate of interest, the process is termed as a home loan balance transfer or refinancing. This unique home loan transfer service helps a customer avoid high applicable interest rates as listed by one home loan lender and migrate to a lower interest rate structure with another lender.
So why one would need a balance transfer? A home loan involves a significantly large amount of money and therefore, the interest rate on the loan is a matter of concern for everyone who decides to take a home loan. Home loan interest rates may be high so one of the most common ways to reduce interest rates is to either talk to the bank that has provided you with the loan to reduce it or go for a transfer of the balance on an existing home loan or in layman terms, shift your home loan to a bank offering lesser rate.
Key Features of Home Loan Balance Transfer
The most important benefit of availing a home loan balance transfer is saving money. The difference in interest rates between the two lenders, the tenure of the loan and the amount outstanding are the three primary contributing factors. If you see a significant benefit in the home loan interest rate, it may well be worth considering a switch to the new home loan lender. You must first and foremost identify the objective for availing of a balance transfer of your loan. Then you must just ensure that your new home loan helps you bring down your overall cost of acquisition. The reason of switching the lender could include:
Any salaried, self-employed professional or self-employed businessperson with an outstanding home loan that has been regularly serviced can apply for a home loan balance transfer. Though all loan providers have different eligibility criteria, some basic ones are as follows:
Your home loan balance transfer is treated similar to a fresh home loan application by the bank you are transferring the loan to. Therefore, while applying for your home loan to transfer to another bank, all the documents provided during the initial home loan application need to be resubmitted. These documents are then revalidated and vetted by the bank or NBFC providing the loan transfer facility. Documents are the most important element while taking up a loan because they best help the bank to identify the loan borrower to make sure of their loan borrowing and loan repayment capabilities. The prerequisite key documents for home loan transfers are the following:
Home Loan Balance Transfer Rates of Top Lenders
Lender | Lowest Balance Transfer Rates | Processing Fee (Exclusive of GST) |
Kotak Mahindra Bank | 6.50% onwards | Up to 0.50% of the loan amount plus statutory dues |
LIC Housing Finance Ltd. | 6.66% onwards | As applicable |
ICICI Bank | 6.75% onwards | Processing fee of 0.50% of the loan amount plus applicable taxes. |
State Bank of India | 6.75% onwards | Up to 0.4% of the loan amount (Min. of Rs 10,000 & Max. of Rs. 30,000) |
HDFC Ltd. | 6.70% onwards | Salaried/Self Employed Professional – Up to 0.5% of the loan amount or Rs. 3,000, whichever is higher |
Bank of Baroda | 6.75% onwards | Flat: Rs 8,500/- (upfront) |
Union Bank of India | 6.80% onwards | 0.50% of the loan amount (maximum Rs.15,000) |
Axis Bank | 6.9% onwards | Up to 1% of the loan amount subject to a minimum of Rs. 10,000 |
Canara Bank | 6.90% onwards | 0.50% (Min. Rs. 1,500; Max. Rs. 10,000) |
IDFC First Bank | 6.90% onwards | Up to ₹10,000 |
Federal Bank | 7.65% onwards | 0.50% of loan amount (Min. Rs. 10,000; Max. Rs. 45,000) |
L&T Housing Finance | 7.7% onwards | 0.25% of the loan amount |
Standard Chartered Bank | 7.99% onwards | Up to 1% of the sanctioned amount |
IIFL | 8.20% onwards | Up to 2% of the loan amount |
Indiabulls Housing Finance Ltd. | 8.80% onwards | Up to 2% of the loan amount |
Yes Bank | 8.95% onwards | Up to 2% of the loan amount or Rs. 10,000, whichever is higher |
Piramal Capital & Housing Finance | 9.75% onwards | Up to 3% of the loan amount |
Home Loan Balance Transfer Interest Rates as of 5th October 2021.
The housing loan balance transfer rates in the table are subject to change anytime without prior notice
Guiding Steps to Home loan Balance Transfer:
Due to unalike interest rates offered by different banks and loan lenders for existing and new customers, several customers get upset with their high home loan interest rates. This is the point when you can consider a switch between banks and transfer your home loan to a bank offering lower rates compared to the existing one. Here is a guide to get you in the clear about Home loan Balance Transfers-
Step 1: Analyze cost benefits being offered Decide the viability of transferring your home loan by analyzing the current situation. Here are some guidelines to help you with the analysis:
Step 2: Get NOC from the existing bank Getting a No Objection Certificate (NOC) from your current home loan provider is a key step in the home loan balance transfer process. The other document that is necessary to complete this step of the balance transfer system is a foreclosure letter along with the complete list of documents held by the bank as well as your payment history. In some cases, your current bank may try to retain your business by offering you a reduced interest compared to what you are currently paying. Make sure you analyse such an offer as well as other offers thoroughly before settling on a specific one.
Step 3: Apply To New Bank Now you must have all the required documents ready to transfer existing home loan to another bank of your choice. You will also require getting a No Objection Certificate from your housing society or builder to be submitted as a proof of ownership to the bank along with all other documents. Then, bank will check your ability to pay the monthly installments. While making the application for balance transfer, you can decide to top up the balance on your home loan, reduce tenure or change your home loan EMIs.
Step 4: Credit Approval At this step, bank will evaluate your application and decide your eligibility for home loan transfer. Extensive background checks and history assessment will be carried out before they give you a credit approval. These verifications include re-evaluation of your home loan, checking your credit history, checking the authenticity of ownership and document valuation. Once the issues related to Credit Approval are resolved, the home loan provider would provide you with documentation that mentions key information such as the new loan interest rate, tenure and other features. Once this step is completed it is time you decided whether to go through with the balance transfer to stick to your current loan provider.
Step 5: Documentation with Chosen Loan Provider At this point, if you decide to finalise the home loan transfer process, you would be required to complete the documentation process with your selected loan provider. They may require a few extra documents to complete the whole transfer process. Here, you have your home loan transferred at a low interest rate and better benefits.
Banks are very careful when allowing shifting your home loan, especially banks which take on the responsibility of the transferred loan amount. And that is where PaisaBazaar can help you.
Our Home Loan Balance Transfer Calculator can help speed up your decision-making process by sifting through all the offers available based on the information provided by you. Our online tool automatically generates a comprehensive comparison report based on your requirements to help you make an informed decision. Our calculator takes everything into consideration, such as your total and outstanding loan amounts, remaining loan tenure and the existing rate of interest on your home loan. We will also provide you with the fine print of the transfer agreement to aid your decision.
Q. When is a home loan balance transfer a good idea?
Ans. The key reason for transferring a home loan from one lender to another is to benefit from a lower interest rate provided by the new lender.
Q. Is there a limit to the amount I can transfer?
Ans. Yes. The maximum balance transfer amount is equal to the outstanding amount of the home loan.
Q. When should I not consider transferring my home loan?
Ans. You must not consider shifting your home loan if one of the following is applicable in your situation:
Q. Does my current credit score affect my chances of successfully completing the transfer?
Ans. In case your credit score has dropped significantly since you applied for the initial home loan, it might affect the process. As the balance transfer process works similar to applying for a new home loan, your credit score and history would play a key role in determining your eligibility for the home loan balance transfer.
Q. Will my refinance be affected by the prepayment penalty?
Ans. Most banks today wont have a prepayment penalty in the first place. But if your bank has it, then you can ask your new lending bank to take it into account. This will vary from bank to bank.
Q. How much time will it take to transfer my home loan from another bank?
Ans. Transferring a home loan is treated like buying a home loan all over again by the bank, the loan is transferred to. Therefore, it might take 15-20 days for the home loan to be transferred to the new bank.
Q. What is a top up loan?
Ans. For instance, if the property value of your home climbs much higher from its original price at the time you took the home loan and you might require more finance for your home renovation. In this situation you can add to your loan. This is called a loan top up.
Q. Can I get a top up on my loan along with the transfer?
Ans. Yes, depending upon your eligibility, the loan issuer can offer you the option to top up on the home loan to be transferred to the new bank but there may be processing and legal charges applicable.
Q. What processing fee is charged on home loan transfer?
Ans. Processing fees on transfer of home loans range from 0.5% to 1% of the loan amount.
Q. Is there any interest saving in EMI by home loan transfer to another bank?
Ans. The precise reduction in EMI varies based upon:
Q. What steps does a home loan takeover involve?
Ans. The simple steps following below are involved in transfer of your loan:
Q. What precautions must be taken when transferring a home loan?
Let us help you find the most suitable offers.
