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Zone Based Health Insurance Plan in India: Zone A, B & C

Cities in India are classified into three tiers according to their population. Now, while this classification was implemented for House Rent Allowance allocation, it has several other uses as well; one of the most significant ones among them being the cost of health insurance policies.

Yes, that’s right!

Your health and the sum insured under your healthcare policy are not the only factors that help lower your premium payment towards your policy. The city where you reside plays an important role in determining the cost of your insurance policy. This categorisation is known as zone-based health insurance.

Let us now learn at length about its implications.

What Does Zone in Health Insurance Mean?

It is common knowledge that healthcare in larger metropolitan cities cost more than that in smaller cities. That is why, to make seeking healthcare more affordable for those in smaller cities, insurance providers have curated zone-based health insurance policies.

But, what does the word “zone” in this respect mean?

Well, it refers to the three zones that cities in India are classified into, as illustrated in the table below:

Zone A	Zone B	Zone C
Delhi/NCR, Mumbai including (including Navi Mumbai, Thane and Kalyan)	Hyderabad, Secunderabad, Bangalore, Kolkata, Ahmedabad, Vadodara, Chennai, Pune and Surat.	All Cities apart from A & B belong to Zone C

But the classification of cities according to treatment cost may vary from one insurance provider to the other (The above classification is for Digit Insurance).

Now, the cost of treatment borne in Zone A cities is significantly higher than that of Zone B cities. The medical expenses are further reduced for Zone C cities. That is why, with zone-based insurance plans, the cost of premium paid towards them is decided according to the treatment expense in each city.

Know more about:

How the Premium is Calculated under Zone-Based Health Insurance Policies?

One of the major advantages of zone-based health insurance is that it reduces the premium paid towards health insurance policies by 10%-20%.

For instance, if you are a resident of Delhi (Zone A city), you might have to pay up to Rs. 6,448 as premium for insurance of Rs. 10 Lakh, which would have been available to you at around Rs. 5,882 if you were residing in Surat (Zone B city). Further, if you are residing in any Zone C city, your premium cost will be lowered even further (Rs. 5,315 only).

How Zone Upgrade Cover is helpful?

A Zone Upgrade cover comes into play when the policyholder is in Zone C or Zone B and wants to move to the upper zones for seeking treatment.

Here the Zone Upgrade cover affects the premium payments by allowing policyholders to pay the premium according to the treatment cost in the city they are moving to.

If we look at the example cited above, and you wish to move from Surat to Delhi, the cost of seeking treatment will automatically increase. Here, you can avail a Zone Upgrade cover and pay a higher premium according to Delhi’s requirements.

Zone Based Premium Calculation with an Example

Let us illustrate the example in the table below for better understanding:

Zone C	Zone B	Zone A
Premium is Rs. 5315 with 20% Co-payment	Premium is Rs. 5882 with 10% Co-payment	Premium is Rs. 6448 with 0% Co-payment
NA	Pay Rs. 567 (Zone C -> B) as Zone Upgrade Add-on Charges	Pay Rs. 1133 (Zone C -> A) as Zone Upgrade Add-on Charges
NA	Save 10% Co-payment Charges	Save 20% Co-payment Charges

Zone-based pricing of health insurance policies also have to adhere to the following particulars:

Change in the Policyholder’s Residence - Suppose you are a resident of Meerut, but due to work, you will have to relocate to Mumbai. So, if you are planning to buy a Health Insurance policy, you can avail the zone upgrade cover and upgrade your Zone from Meerut to Mumbai.

Since treatment costs are higher in Mumbai (Zone A city) than Meerut (Zone B city), the insurance company will adjust your premium payment accordingly and you will have to pay a higher premium.

On the other hand, if you live in a Zone B or C city but wish to get your treatment done in any of the Zone A cities (due to better hospitals and facilities), then you should avail the Zone Upgrade cover with your health insurance policy.

Advanced Treatment Clause - There are some insurance policies that limit their policy coverage when the policyholder moves from a Zone C city to a Zone B or Zone A city.

In such cases of zone-based health insurance policy, the insurance provider mostly levies a co-payment clause, where the insured individual has to pay a portion of their expenses incurred towards healthcare.

Know more about:

How to Upgrade to Zone-Based Health Insurance Plans?

Insurance providers like Digit Insurance offers zone upgrade add-on that allow policyholders to avail the benefits of upgrading their health insurance policies according to the treatment cost in their cities.

For instance, if you are a resident of a Zone C city and have a health insurance policy suitable for covering the treatment cost in that city only, you can avail the Zone-Upgrade add-on to make it suitable for treatment expenses in Zone B or Zone A cities.

With this upgrade, you can avail a higher coverage under your insurance policy if you wish to seek treatment at any of the Zone B or Zone A cities. You can simply opt for this add-on cover and get a zone-based upgrade to your plan.

What is Better, Zone A or Zone B?

When it comes to seeking competitive medical treatment, Zone A cities are preferred by most. Even though they are more expensive than Zone B or Zone C cities, you can seek the most advanced healthcare in these cities. The cost of treatment in these cities is, thus, automatically higher than the other two zones.

Even though Zone A is better in terms of treatment, it also means higher costs and subsequently, higher premium payments towards the health insurance policy.

But, this problem can be solved by simply availing the zone upgrade cover. You can simply upgrade your existing policy by paying an extra premium towards it.

Now that we have learnt at length about zone-based health insurance policies let us take a glance at its pros and cons.

How does Zone-Based Health Insurance Policy help?

For those living in Zone B or Zone C cities and seeking healthcare in the city itself, a zone-based insurance plan can reduce premium payments by quite a substantial amount.

This is one of the perks that can help individuals reduce their financial liability towards their health insurance plans.

Furthermore, if they want to seek healthcare in a Zone A city, they always have the option to pay an extra premium towards it and upgrade it. When they upgrade to a higher zone, the health insurance policy becomes sufficient to cover the treatment cost in the Zone A city. This allows them to save the treatment cost at the time of claim and they don’t have to pay the difference in treatment cost for different zones.

It thus makes for an exceptionally convenient way to avail healthcare benefits.

Cons of Zone-Based Health Insurance Plans

Mostly, insurance providers levy a copay clause when it comes to zone-based plans. With this copay clause, the insurance premiums might become cheaper, but you may incur more expenses towards covering your treatment costs in the long run. This is where the policy might prove to be disadvantageous for you.

Is it a Good Idea to Buy Zone-Based Pricing?

Getting an add-on zone-based health insurance policy can be beneficial because it will allow you to save quite a substantial amount on your premium payment towards your healthcare police.

But, it is important to look through the terms put forth by this provision of your healthcare policy to make sure that you are well-aware of what you are getting into!

So, research well, check through the policy terms and make your health insurance policy even more beneficial with the zone-based pricing provision!

FAQs about Zone Based Health Insurance

All

Can I avail zone upgrade cover on an existing health insurance policy?

This condition is specific to the policies put forth by insurance providers. Sometimes, when the insurance company provides the add-on, they introduce a waiting period or such other similar conditions with it.

Is the Co-payment clause beneficial for policyholders?

Even though the co-payment clause allows you to reduce premium payments, it can increase your financial liability during claim settlements. Thus, it is better to avail of a policy that does not impose this clause.

Is the zone-based classification of cities same for all insurers?

No, the zone-based classification for the purpose of health insurance policy premium payment can vary between different insurance providers.

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Disclaimer #1: *Customer can choose options at the time of availing insurance. Premium amount may vary accordingly. Insured is required to disclose any pre-existing condition or on going treatment before policy issuance in the proposal form.

Disclaimer #2: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.

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CIN: U66010PN2016PLC167410, IRDAI Reg. No. 158.

Go Digit General Insurance Limited (formerly known as Oben General Insurance Ltd.) - Registered Office Address - 1 to 6 floors, Ananta One (AR One), Pride Hotel Lane, Narveer Tanaji Wadi, City Survey No.1579, Shivaji Nagar, Pune-411005, Maharashtra | Corporate Office Address - Atlantis, 95, 4th B Cross Road, Koramangala Industrial Layout, 5th Block, Bengaluru-560095, Karnataka | Trade logo of Go Digit General Insurance Ltd. displayed above belongs to Go Digit lnfoworks Services Private Limited and is provided and used by Go Digit General Insurance Ltd. under license.