Mediclaim policies seem to have become the order of the day. With the rise in unexpected illnesses, a policy to cover expenses incurred for the treatment of diseases is surely beneficial.

Mediclaim policies provide for reimbursement of hospitalisation/domiciliary hospitalisation expenses for illnesses/diseases suffered or accidental injuries sustained during the policy period.

The tenure of such policies is usually a year but some insurance companies like ICICI [Get Quote] Lombard offer mediclaim for two years. At the end of the tenure, one has to renew the policy to remain covered. If the insured person has not encountered any illness or undergone any treatment during the year (claim-free year), the premium lapses.

However, when you renew the policy for another year, most insurance companies offer a no-claims bonus which is deducted from the premium to be paid or increase the sum assured by an amount equal to the premium paid in the previous year (a no-claim bonus is given for not having availed of the mediclaim during the year).

Also, premia up to Rs 10,000 qualify for tax benefit under section 80 (D) of the Income Tax Act.

Most non-life insurers offer plain vanilla mediclaim policies. However, some of them have in-built life covers and others offer value additions in the form of additional reimbursements.

Choose a plan depending on what your likely medical expenses may be, individually or for your family. Paying a heavy premium for a fancy policy and ending up in a claim-free situation is undesirable. Here are some insurers who provide value-added policies apart from the usual mediclaim.

Tata AIG HealthFirst

This is a comprehensive health insurance plan which provides for prolonged hospitalisation, including major surgeries or critical illnesses.

One unique feature of this policy is that a lump-sum allowance is paid irrespective of the actual medical or hospitalisation expenses.

Also, the policy is renewable till the age of 65 without further medical examination and premiums increase only in five years. It also has an in-built life-cover.

Cholamandalam Health Insurance

One unique feature of this policy is that medical expenses incurred 60 days prior to hospitalisation are reimbursed. Once discharged from hospital, the policy pays for medical expenses related to the hospitalisation, for a period of 90 days after discharge.

The policy covers over 130 minor surgeries (usually outside the scope of policies offered by other insurers) that require less than 24-hour hospitalisation under the day-care procedure.

The policy also has value-added features like ambulance expenses, reimbursement of general health and eye examination and also pays daily hospital allowances.

ICICI Lombard

The insurer offers four plans - 10K Tax Saver Health, Gold Health Insurance Plan, Silver Plan and Cashless Plan.

Under the fixed-floater health plan (10K Tax Saver Health), there is just one premium for the whole family along with a cashless claim facility.

A benefit of Rs 10,000 is paid, if more than one member of the family (covered under one policy) are simultaneously hospitalised for a period of five consecutive days or more. A similar benefit can be availed of if the period of hospitalisation is 10 consecutive days or more, once a year.

Gold Health Insurance Plan is one of the most comprehensive plans available today. It covers pre-existing diseases, maternity expenses as well as expenses for acupressure, ayurvedic and homeopathic treatments.

Silver Plan is a single health insurance plan that covers the entire family's medical expenses during sudden illnesses, surgeries and accidents.

It floats over all the members of the family, which means that any member of the family can use it. For instance, if the policy is bought for Rs 5 lakh, then either all five members of the family can use it for Rs 1 lakh each or one member can utilise the entire cover.

CASHLESS MEDICLAIM The concept of cashless hospitalisation is new in the domestic medical insurance arena but is fast catching on with plain policies. This policy reduces the hassles of dealing in cash and then claiming a reimbursement for the same which usually takes a longer time. This is how it is done: A cashless policy makes the policy holder eligible to avail himself of medical treatment at any of the network hospitals of the insurer, without having to shell out cash at the time of treatment. Insurance companies have a panel of authorised Third Party Administrators (TPAs) who offer services across various cities. TPAs are the main contacts for the settlement of claims. In case of hospitalisation, the TPA settles the hospital dues by issuing a letter to the hospital guaranteeing payment of dues for the treatment availed. Once the policy holder is discharged from hospital, he forwards the relevant documents along with the bills to the TPA. There are two ways in which this is done. In the first case, the TPA examines the claim and sends it along with the relevant documents to the insurer. The insurer, in turn, makes the required payment to the TPA who then pays the hospital. In the second case, the TPA settles the hospital dues and then claims reimbursement from the insurer after necessary processing.