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What is Cashless Health Insurance Policy and why is it important?

Jagrity Sharma Jagrity Sharma 21 January 2020

Cashless Health Insurance Claims remove the basic hassles of paying at the time of medical emergencies. Cashless Health Insurance Plans settle the bill directly with the hospital.

Cashless Health Insurance Policy

Health related uncertainties are on the rise and the rising cost of medical expenses has made it imperative that we avail a health insurance plan. A health insurance policy aims to provide financial assistance to the policyholder in times of medical emergency.

Types of Health Insurance claims:

Health insurance claims are broadly classified into two types:

  • Cashless Claims: As the name suggests, in Cashless Health Insurance Claim, the insurance company directly pays for the medical expenses to the network hospital. The insured does not have to make any payment to the hospital, except for the portion that is not paid by the insurer.

This claim is possible only in network hospitals wherein the insurance company has a tie-up with the hospital for providing cashless claim settlement.

  • Reimbursement Claims: Under Reimbursement Health Insurance Claim, the insured needs to pay for medical expenses from his pocket and then claim for the same by submitting necessary documents.

Under this claim, the insured can avail for treatment at the non-network hospital as well. Kindly note that under this claim, the insured has to provide all the supporting document in original for reimbursement of the same. No photocopies would be accepted.

Basic Features of Cashless Health Insurance Claim:

Cashless Health Insurance Policy is one of the instruments that helps you in being financially stress-free at times of medical emergency.

Apart from taking care of your medical bills, this health insurance policy also offers the following salient features like:

  • It takes care of Pre and Post Hospitalization expenses, upto the tenure mentioned. This may include medicines, diagnostic tests, doctor visits, etc.

  • There is a No Claim Bonus that is available in all cashless health insurance plans for every claim free year. This encourages people not to make small claims.

  • Some policies offer

    • Additional benefits like day-care treatment, daily cash benefits, ambulance services, domiciliary treatment wherein the patient is required to be treated from the comfort of his home, etc.
    • Coverage for critical illnesses like cancer, stroke, heart attack , personal accidental benefit, etc. for an additional premium
    • Complimentary service of medical check-up and laboratory tests
  • The premium paid towards Cashless Health Insurance Plans are tax free U/S 80D of the Income Tax Act, 1961:

    • Upto Rs. 25,000 per annum for health insurance premium paid towards self, spouse and children
    • An additional amount of Rs. 25,000 is provided as a tax benefit for health insurance premium paid towards dependent parents
    • If self, spouse or either parents are more than 60 years of age, then the limit is extended to Rs. 50,000 per annum with a maximum possible amount of Rs. 1,00,000 per annum for any individual and their parents

Advantages of Cashless Health Insurance Claim

Stress Free Emergency Corpus:

  • One of the biggest advantages of availing Cashless Health Insurance Plans is that it relieves you from the responsibility of creating an emergency corpus towards medical emergencies. There is no stress of arranging the cost for the treatment during medical exigencies.

  • Medical emergencies are unforeseen and with the rising cost of medical treatment, availing a health insurance policy is an effective way to keep yourself ready to face critical times. However, cashless health insurance policies help you save your time of arranging for fund as you can immediately start medical treatment by showing cashless health insurance policy number or card.

Holistic coverage:

  • One of the biggest advantages of availing cashless health insurance policy is that these policies now offer a wide coverage. Nowadays, most cashless health insurance policies offer coverage for expenses related to pre-hospitalization, post-hospitalization, day-care treatments, ambulance expenses etc. as well.

The additional coverage, however, varies from company to company and plan to plan.

Health cover throughout:

  • Availing a cashless health insurance cover from a leading and reliable insurance provider will ensure that you have a health insurance coverage even while travelling. Most health insurance providers offer global health insurance coverage to their customers, so that they do not have to worry about finances in case of emergency situations at the time of travelling.

Income Tax Benefit:

  • One of the perks of availing cashless health insurance policy is the tax benefit. All the premiums paid is eligible to avail tax benefit under Section 80D of the Income Tax Act, 1961. ###Process of Cashless Health Insurance Claim

  • All the health insurance providers collaborate with hospitals across India and create a network of hospitals. In case of medical emergency, the policyholder with a cashless health insurance policy can go to the nearest network hospital and avail cashless medical treatment.

  • All one needs to provide at the time of hospitalisation is the valid health card and identity proof of the insured. Mandatory documents for Cashless Health Insurance Claim

Following is the list of documents that are required for making a cashless health insurance claim:

  • Health Insurance Card assigned by the health insurance provider
  • Doctors’ advice of hospitalization
  • Investigation report prepared by the hospital for the necessary treatment
  • All original bills, prescription and receipt issued by the hospital and pharmacy
  • Discharge summary provided by the hospital

Thus given above are some of the common documents asked by most of the health insurance providers. However, some health insurance providers may ask for additional documents as per their terms and conditions.

Types of Cashless Health Insurance Claim:

There are two types of Cashless Health Insurance Claim, namely Planned Hospitalization and Emergency Hospitalization.

  • Planned hospitalization:

Planned hospitalization refers to admission in hospital in a planned manner i.e. the insured has planned to be admitted in hospital for treatment. Under such cases, the insured would have to get a pre-authorization from the insurance company for the treatment at least 24 to 72 hours prior to hospitalization.

  • Emergency hospitalization:

Emergency hospitalization refers to medical exigencies and hospitalization for the same with no prior plan. Upon admission, the insured needs to show the health insurance card provided by the health insurance provider within 4 to 8 hour after hospitalization and avail the cashless hospitalization facility.

Importance of Cashless Health Insurance Claim

Bottom line, the benefit of availing cashless health insurance claim is as under:

  • You need not worry about finances in times of medical emergency
  • You receive the best-in-class medical treatment from any network hospital
  • You receive hassle-free medical treatment immediately and avoid emotional stress
  • You get to avoid lengthy paperwork required at the time of hospital admission and reimbursement.

Thus, the above parameters suggest that it is vital to have a cashless health insurance policy in this day and age.

Recommended Link:

Top Cashless Mediclaim Policy For a Family

Jagrity Sharma
Written by Jagrity Sharma
A bibliophile who hates alliterations, but loves cream, comics and content immensely! On another note, a content marketer who leverages the power of words to explain...almost anything!