Zone Based Health Insurance

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.

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. 

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.

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.

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.

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!