New Health Insurance Project Swati Sarang (Tybbi)Um

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    CHAPTER 1

    INSURANCE

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    INTRODUCTION TO INSURANCE

    Insurance is a protection from risk as the man is perennially exposed

    to risk.

    Life may stop suddenly with a heart attack. The house may

    unexpectedly catch fire and be gutted the crop may be lost by vagaries of

    nature, draught, disease or flood. The motor Car may be badly damaged in a

    road accident, thus, risk of different kinds resulting in loss are Inevitable in

    life. Insurance provides an answer by providing protection to persons from

    such Contingencies.

    Insurance is coverage by contract where by one party (insurer)

    agree to indemnify or guarantee another (insured) against loss by a specified

    contingent event or peril and or an unfortunate event. The aim of all types or

    classes of insurance is to afford protection to the Insured from the risk, which

    he apprehends or anticipates. The protection from insurance is available to

    the insurer not in preventing the event happening but in indemnifying the

    insured from the loss he has sustained. Insurance is a major component of

    the financial sector. It is a risk transfer mechanism, whereby an insuredtransfers a risk exposure to an insurer in consideration for the payment of

    premium.

    Health care insurance or health insurance is a contract

    between a policyholder and a third-Party payer or government program to

    reimburse the policyholder for all or a portion of the cost of medically

    necessary treatment or preventive care provided by health care Professionals.

    The subject matter of insurance is PROPERTY, PREMIUM, and LIABILITY.

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    1.2 Functions of Insurance

    The function of insurance is two folds. In the first instance it

    transfers or shifts a risk from one individual to a group and secondly, the

    losses are shared, on some equitable basis by all members of the group.

    Insurance is a device where- by the risk of financial loss accruing from death

    or disability, or damage to, or destruction of property owing to perils to which

    they are exposed is passed on to another. The insurer, of course, collects an

    agreed rate of contribution from a large number of people and relieves the

    insured partly, if not wholly, from the effects of loss by paying the insurance

    money.

    Contract of Insurance

    A contract of insurance is an agreement whereby one party called

    the Insurer Undertakes, in return for an agreed consideration, called the

    Premium, to pay the other party namely, the Insured a sum of money or its

    equivalent in kind, upon the occurrence of specified event resulting in loss to

    him.

    The Policy is a document, which is an evidence of the contract of

    insurance. The contract of insurance is governed by the law of contract as

    embodied in the Indian Contract Act, 1872. All insurance contracts must have

    the following five essential elements in order that they may be legally

    enforceable.

    Offer and acceptance:

    The person who wants to take up cover against particular perils

    offers his risk through a proposal form to the insurance company.

    Consideration:

    The premium paid is the consideration and on its receipt by the

    insurance company the contract of insurance comes into force.

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    Consensus Ad Idem:

    The parties to the contract must be of the same mind and there

    should be a complete and unbiased agreement between the insurer and the

    insured regarding the terms of the contract. The intention of the insured

    should have been clearly understood by the insurance company.

    Capacity to Contract:

    Both the parties must be legally competent to enter into an

    agreement. The parties to the contract should not be of unsound mind. They

    must have attained the age of majority and should not have been declared as

    insolvent.

    Legality of the Object of the Contract:

    The purpose for which the agreement is entered into should be

    legal and not opposed to public policy.

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    1.2 Basic Principles of Contract of Insurance

    Insurable Interest:

    A contract of insurance does not undertake to prevent theoccurrences of the peril insured against. What it provides is a promise to

    make good the financial loss caused by the operation of the insured peril.

    Utmost good faith:

    Law requires both the parties to the contract to observe good

    faith, which means absence of fraud. Insurance contracts are subjected by

    law to a higher duty namely of utmost good faith. The proposer has a duty to

    disclose to the insurer all material facts which he knows and which he ought

    to known. A material fact is facts which affect the judgment of a prudent

    underwriter deciding whether to accept the risk and if so, at what rate of

    premium and subject to what terms and conditions.

    Indemnity:

    Indemnity means compensation for loss or injury. It also means

    security or protection against loss or damage. Insurance contracts promise to

    make good the loss or damage limiting it to the amount of loss or damage

    subject to the sum insured.

    Subrogation and Contribution:

    Subrogation is defined as the transfer of right and remedies of the

    insured to the insurer who has indemnified the insured in respect of the loss.

    Proximate Cause:

    The object of insurance is to provide indemnity not for any loss

    but only for such losses as are caused by insured perils. The perils insured

    are clearly stated in the policy and the liability of the insurer arises only if the

    loss is caused by these perils.

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    1.3 Objective of the study

    1. To know about the risk covered in health insurance.

    2. To protect in the event of unexpected loss, but due to reasons

    associated with health care costs.

    3. To make health insurance important for many people.

    4. To ensure quality services to the customers.

    5. To provide the superior selling skills to market quality products and

    services that provides best insurance value for consumers.

    6. To provides direct payment or reimbursement for expenses

    associated with illness & injuries.7. To protects you & your dependents against any financial constraints

    arising on account of a medical emergency.

    8. To cover the ever rising medical expenses. It is affordable & carries

    the assurance & freedom from insecurities that threaten normally

    now & then.

    9. To save you from buying a policy which might not be appropriate

    for you & can also be expensive.

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    1.4 Types of Insurance in India

    Insurance in India can be broadly categorized into two types: life

    and general. Life insurance can be further classified into term life insurance,

    whole life insurance, money back plan, endowment policy and pension plan.

    Health, home, accident, motor and travel insurances fall under the general

    insurance category. State-owned companies like Life Insurance Corporation

    of India, as well as private insurance providers, like ICICI Prudential and Bajaj

    Allianz, provide life and general insurances in India.

    LIFE INSURANCE :

    Life insurance is a contract between an insurance policy holder

    and aninsurer,where the insurer promises to pay a designatedbeneficiary a

    sum of money (the "benefits") upon the death of the insured person.

    Depending on the contract, other events such as terminal illness or critical

    illness may also trigger payment. The policy holder typically pays a premium,

    either regularly or as a lump sum. Other expenses (such as funeral expenses)

    are also sometimes included in the premium; however, in Australia the

    predominant form simply specifies a lump sum to be paid on the policy

    holder's death.

    Term Life Insurance Policy:

    As its name implies, term life insurance policy is for a specified

    period. It lets you select the length of time for which you want coverage, up to

    a period of 35 years. It has one of the lowest premiums among insurance

    plans and also carries an added advantage of fixed payments that do not

    increase during your term. In case of the policy holder's untimely demise, the

    benefit amount specified in the insurance agreement goes to the nominees.

    http://en.wikipedia.org/wiki/Insurance_policyhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Beneficiaryhttp://en.wikipedia.org/wiki/Terminal_illnesshttp://en.wikipedia.org/wiki/Critical_illnesshttp://en.wikipedia.org/wiki/Critical_illnesshttp://en.wikipedia.org/wiki/Critical_illnesshttp://en.wikipedia.org/wiki/Critical_illnesshttp://en.wikipedia.org/wiki/Terminal_illnesshttp://en.wikipedia.org/wiki/Beneficiaryhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Insurance_policy
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    Whole Life Insurance Policy:

    Whole life insurance policies do not have any fixed term or end

    date and is only payable to the designated beneficiary after the death of the

    policy holder. The policy owner does not get any monetary benefits out of this

    policy. Because this type of insurance involves fixed known annual premiums,

    it's a good option if you want to ensure guaranteed financial benefits for

    surviving family members.

    Money Back Plan:

    With a money back plan, you receive periodic payments, which

    are a percentage of the entire amount insured, during the lifetime of your

    policy. It's a plan that offers insurance coverage along with savings. A unique

    feature of the money back plan is that in the event of the policy holder's death

    during the policy term, the beneficiary will get the full sum assured without

    having any of the survival benefit amounts, which have already been paid,

    deducted.

    Pension Plan:

    Pension plans are different from other types of life insurance

    because they do not provide any life insurance cover, but ensure a

    guaranteed income, either for life or for a certain period. You make the

    investment for a pension plan either with a single lump sum payment or

    through installments paid over a certain number of years. In return, you get a

    specific sum every year, every half-year or every month, either for life or for a

    fixed number of years.

    Endowment Policy:

    An endowment policy can be taken out for a specified period.

    At the end of the stipulated period, the assured amount is paid back to the

    policy holder, along with the bonus accumulated during the term of the policy.

    Designed primarily to provide a living benefit, along with life insurance

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    protection, the endowment policy makes a good investment if you want

    coverage, as well as some extra money.

    GENERAL INSURANCE:

    Insurance other than Life Insurance falls under the category

    of General Insurance. General Insurance comprises of insurance of property

    against fire, burglary etc, personal insurance such as Accident and Health

    Insurance, and liability insurance which covers legal liabilities. There are also

    other covers such as Errors and Omissions insurance for professionals, credit

    insurance etc.

    Non-life insurance companies have products that cover

    property against Fire and allied perils, flood storm and inundation, earthquake

    and so on.The non-life companies also offer policies covering machinery

    against breakdown,there are policies that cover the hull of ships and so on. A

    Marine Cargo policy covers goods in transit including by sea, air and road.

    Further, insurance of motor vehicles against damages and theft forms a major

    chunk of non-life insurance business. Accident and health insurance policies

    are available for individuals as well as groups. A group could be a group of

    employees of an organization or holders of credit cards or deposit holders in a

    bank etc. Normally when a group is covered, insurers offer group discounts.

    Health Insurance:

    Under the general insurance category, health insurance is one

    of the most popular choices. In India, Mediclaim covers hospitalization,

    expenses incurred during medical tests and for medicines. You can also get

    coverage for medical expenses by opting for the 'Critical Illness (CI)' rider

    available with life insurance policies. This means that in case of a 'critical

    illness' as defined by the insurance company during the policy tenure, you will

    be paid the amount as proposed in the policy.

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    Vehicle insurance:

    Vehicle insurance (also known as auto insurance, gap

    insurance,car insurance, or motor insurance) isinsurance purchased forcars,

    trucks, motorcycles, and other road vehicles. Its primary use is to provide

    financial protection against physical damage and/or bodily injury resulting

    fromtraffic collisions and againstliability that could also arise therefrom. The

    specific terms of vehicle insurance vary with legalregulations in each region.

    Home insurance:

    Home insurance, also commonly called hazard insurance or

    homeowner's insurance (often abbreviated in the real estate industry as HOI),

    is the type ofproperty insurance that covers private homes. It is aninsurance

    policy that combines various personal insurance protections, which can

    include losses occurring to one's home, its contents, loss of its use (additional

    living expenses), or loss of other personal possessions of the homeowner, as

    well asliability insurance for accidents that may happen at the home or at the

    hands of the homeowner within the policy territory. It requires that at least one

    of the named insureds occupies the home. The dwelling policy (DP) is similar,

    but used for residences which don't qualify for various reasons, such as

    vacancy/non-occupancy, seasonal/secondary residence, or age.

    http://en.wikipedia.org/wiki/Gap_insurancehttp://en.wikipedia.org/wiki/Gap_insurancehttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Truckhttp://en.wikipedia.org/wiki/Motorcyclehttp://en.wikipedia.org/wiki/Traffic_collisionhttp://en.wikipedia.org/wiki/Legal_liabilityhttp://en.wikipedia.org/wiki/Regulationhttp://en.wikipedia.org/wiki/Property_insurancehttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Legal_liabilityhttp://en.wikipedia.org/wiki/Legal_liabilityhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Property_insurancehttp://en.wikipedia.org/wiki/Regulationhttp://en.wikipedia.org/wiki/Legal_liabilityhttp://en.wikipedia.org/wiki/Traffic_collisionhttp://en.wikipedia.org/wiki/Motorcyclehttp://en.wikipedia.org/wiki/Truckhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Gap_insurancehttp://en.wikipedia.org/wiki/Gap_insurance
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    CHAPTER 2

    HEALTH

    INSURANCE

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    HEALTH INSURANCE

    2.1Introduction:

    Human life is subject to various risks- risk of death or disabilitydue to natural or accidental events. The term health plan is often used to

    provide health care insurance. People buy health insurance for different

    reasons and health insurance premiums seem to be higher but more

    attractive among higher income group especially the rich. In selecting health

    insurance, a person must understand the various risks associated with the

    different types of insurance available today. Not all insurance is equal. Each

    type of insurance has its own strengths and weaknesses. The wrong healthinsurance choice can place financial future in severe jeopardy. Most important

    criteria in selecting the health insurance should be minimum premium and

    maximum insurance coverage. Generally, the insurer adopts mini-max

    strategy.

    In this context, the authors have attempted to exhibit the

    various schemes and plan available for health insurance, and suggested the

    most appropriate health insurance for attainting sustainable living. Humans

    are also prone to diseases, the treatment of which may involve huge

    expenditure. Health insurance is one of the most controversial forms of

    insurance because of the perceived conflict between the need for the

    insurance company to remain solvent versus the need of its customers to

    remain healthy, which many view as a basic human right. Critics of private

    health insurance claim that this conflict of interest is why governmental

    regulations of health insurance companies are necessary.

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    2.2History of health insurance:

    Some people think of health insurance as a recent

    development in human history. But concern for financial loss resulting from

    accident and illness can be traced to ancient civilizations. Health insurance,

    limited primarily to disability income in case of accident existed in the early

    history of Rome. This tradition continued in Europe in the middle Ages, and by

    the 17th century there were laws providing sickness insurance for seamen

    and dismemberment insurance for soldiers. Health insurance today is a broad

    array of coverage providing for the payment of benefits as a result of sickness

    and injury. It includes insurance for losses from medical expense, accident,

    disability, and accidental death and dismemberment (AD&D).

    Features of Health Insurance:

    There are three basic types of health insurance policies. One

    is Straight Life Policy, which guarantees to cover the person against the odds

    throughout the life span up to 100 years. The next basic type of policy is

    Limited Pay Life policy but one can restrict the time for which one wishes to

    pay the premium.

    One can make the payments till sixty-five years of his age

    continuously for 10 years. Single Premium Life is the other basic type of

    health insurance in which an individual makes a lump sum premium. Many

    additional features are even offered by insurance companies, such as

    accidental coverage and many more alike.

    Function:

    Health insurance is coverage that is provided for medical

    care. Most medical costs incurred from a routine doctor's visit to a visit to the

    emergency room are the responsibility of the insurance carrier. Partial or full

    payment of the monthly premium is typically deducted from an employee's

    wages. The covered individual usually has some out-of-pocket expense, such

    as a co-payment or deductible.

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    2.3 Importance of Health Insurance

    People buy health insurance for different reasons. The following are some ofthe reasons:-

    Health insurance can protect you from the risk of uncertain bills for

    health care.

    Without health insurance, you may not be able to afford expensive

    services.

    Health insurance can pay for services that you use often.

    Health insurance an help you to get better quality care as a member of

    a coordinated health plan than you would get on your own.

    With health insurance, you do not have to worry about the cost of care

    when you are sick.

    The additional money provided by health insurance when you are sick

    may be more valuable to you than money when you are well.

    If you have more dependents than most people, then you may get

    more out of a family policy for health insurance.

    If you or your dependents than most health care needs than most

    people and you only pay an average premium, then you get more from

    health insurance than most people.

    You do not pay income tax on health insurance benefits so it is more

    valuable per dollar than the same amount in taxable pay; and

    Health insurance companies generally pay lower prices to Doctors and

    hospitals than you would pay on your own.

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    Why Health Insurance?

    Medical expenses are sky high these days. An appointment

    with a doctor might churn out big bucks. The elaborate medical treatment

    expenses could eat into your savings meant for the future. Health insurance

    policy kicks in to ensure that you get the required treatment and your pocket

    is still under control. Having health insurance is important because the

    coverage helps people get timely medical care and improve lives and health.

    It covers the risk of financial difficulties in the event of long illness. The

    awareness has been enormous in the last couple of years. This must have

    been in response to the series of uncertainties people have observed in

    recent times like the terror attacks.

    BENEFITS:

    Benefit depends on the policy you choose and the coverage it

    provides. Here is a list of basic coverage provided by most of the

    health policies.

    It helps securing a better future by paying a fraction as an expense

    today called the premium.

    It reduces saving huge amount of financial losses, risk of financial

    breakdown in case of expensive medical and post-illness care.

    It definitely induces a sense of security to the insured.

    It provides financial security to the family members.

    It covers your hospitalization and medical bills.

    It also covers disability and custodial bills.

    You can avail tax benefits on the premium paid under section 80D of

    the Income Tax Act.

    The best factor, you can also opt for health insurance policies even

    after the age of 60.

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    2.5 Advantages of Health Insurance:

    Buying a health insurance policy can prove to be beneficial and one

    can make most of it by taking cover against the odds and uncertainties

    of life. It is advisable to buy the health insurance policy from some

    credible insurance company as they facilitate in the better treatment of

    the person. It facilitates an individual to be treated well in time and

    private rooms and timely services are offered.

    As life is more precious than anything therefore one must not

    compromise on the cost of the health insurance policy. With the

    increasing competition, companies are now coming up with more

    comprehensive and cost effective policies so as to cater to the

    personalized needs of the customer.

    There are many advantages, which an individual can bag in many of

    them. Some of the benefits, which come with the health insurance, are

    childbirth and well baby, critical illness and consultation fees coverage.

    Disadvantages of Health Insurance:

    There are few limitations of these health insurance policies. The health

    insurance company has the right to accept or deny the application. If

    the health insurance company feels that an individual is susceptible to

    more ailments then the health insurance company will refuse to provide

    the cover.

    The premium to be paid is never fixed; it can be changed by the

    company depending on the change in the health insurance policy of the

    government. Health insurance companies at times fail to honor the

    deed and this leaves the insured in a fix. At times people do not give

    their true medical history and this compels insurance companies to

    contravene the deed.

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    2.6 What is TPA (Third Party Administrators)?

    TPA stands for Third Party Administrator. TPA is a

    middleman between Insurer and the Customer. Customer can directly deal

    with TPA at the time of claim and TPA will help with all the process of claim

    settlement. A TPA is a specialized health service provider rendering variety of

    services like networking with hospitals, arranging for hospitalization and claim

    processing and settlement. The concept of TPA has been introduced by the

    IRDA (Insurance Regulatory and Development Authority of India) for the

    benefit of both the insured and the insurer. While the insured is benefited by

    quicker & better health service, insurers are benefited by reduction in their

    administrative costs, fraudulent claims and ultimately bringing down the claim

    ratios. An insurance company can have more than one TPA and a TPA can

    serve more than one insurance company. Some of the services TPA provides

    are

    Maintain database of policyholders

    Issue of identity card to all policyholders=

    Provide ambulance service

    Provide information to policyholders about hospitals.

    Check various investigations

    Provide Cashless service

    Process claims.

    Third Party Administrators and their Role:

    Third Party Admistrator (TPA) was introduced through thenotification on TPA-Health Services Regulations, 2001 by the IRDA. Their

    basic role is to function as an intermediary between the insurer and the

    insured and facilitate the cash-less service of insurance. For this service they

    are paid a fixed per cent of insurance premium as commission. This

    commission is currently fixed at 5.6 per cent of premium amount.

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    CHAPTER 3

    HEALTH

    INSURANCE IN

    INDIA

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    HEALTH INSURANCE IN INDIA

    Health insurance can be defined in very narrow sense where

    individual or group purchases in advance health coverage by paying a fee

    called "premium". But it can be also defined broadly by including all financing

    arrangements where consumer s can avoid or reduce their expenditures at

    time of use of services. The health insurance existing in India covers a very

    wide spectrum of arrangements and hence the latter - broader interpretation

    of health Insurance is more appropriate. Health insurance is very well

    established in many countries. But in India it is a new concept except for the

    organized sector employees. In India only about 2 per cent of total health

    expenditure is funded by public/social health insurance while 18 per cent is

    funded by government budget. I n many other low and middle income

    countries contribution of social health insurance is much higher.

    Percentage of total health expenditure funded through public/social insurance

    and direct government revenue

    Country Social Health Government Budget

    Insurance

    Algeria 37 36

    Bolivia 20 33

    China 31 13

    Korea 23 10

    Vietnam 2 20

    India 2 18

    It is estimated that the Indian health care industry is now

    worth of Rs. 96,000 crore and expected to surge by 10,000 crore annually.

    The share of insurance market in above figure is insignificant. Out of one

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    billion population of India 315 million people are estimated to be insurable

    and have capacity to spend Rs. 1000 as premium per annum. Many global

    insurance companies have plans to get into insurance business in India.

    Market research, detailed planning and effective insurance marketing is likely

    to assume significant importance. Given the health financing and demand

    scenario, health insurance has a wider scope in present day situations in

    India. However, it requires careful and significant effort total Indian health

    insurance market with proper understanding and training.

    The graph shows sharp rise in the penetration of the Health

    Insurance in India after1999. This was due to the policy change by IRDA

    (Insurance regulatory and development Authority) and private players were

    allowed to enter the health insurance segment.

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    3.1 Sources of health insurance in India

    3.1.1. Mediclaim policy (individual)

    The policy provides for reimbursement of

    Hospitalization/Domiciliary hospitalization expenses for illness/disease

    suffered or accidental injury sustained during the policy period.

    The policy pays for expenses incurred under the following heads:

    Room, boarding expenses in the Hospital/Nursing home.

    Nursing expenses.

    Surgeon, Anaesthetist, Medical Practitioner, Consultants, Specialist

    fees.

    Anaesthesia, Blood, Oxygen, Operation theatre charges, Surgical

    Appliances, Medicines and Drugs, Diagnostic Materials, and X-ray,

    Dialysis, Chemotherapy, Radiotherapy, Cost of pacemaker, Artificial

    Limbs and Cost of organs and similar expenses.

    The liability in respect of all claims admitted during the period of

    insurance shall not exceed the sum insured for the person as

    mentioned in the schedule.

    Reimbursement is allowed only when treatment is taken in a hospital or

    nursing home which satisfies the criteria specified in the policy.

    Expenses on hospitalization for minimum period of 24 hours are

    admissible. However, this time limit is not applied to specific treatment

    i.e. Dialysis, Chemotherapy, Radiotherapy, Eye Surgery, Dental

    Surgery, Lithotripsy(Kidney stone removal), D&C, Tonsillectomy taken

    in the hospital/ nursing home and the insured is discharged on the

    same day; the treatment will be considered to be taken under

    hospitalization benefit.

    Relevant medical expenses incurred during period up to 30 days prior

    to and period of 60 days after hospitalization are treatment as part of

    the claim.

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    Domiciliary hospitalization benefit

    This means medical treatment for a period exceeding 3

    days for such illness/ injury which in the normal course would require

    treatment at the hospital/ nursing home but actually taken whilst confined at

    home in India under any of the following circumstances namely:

    The condition of the patient is such that he / she cannot be

    removed to the hospital/ nursing home or The patient cannot be removed to

    hospital / nursing home for lack of accommodation therein.

    However this benefit does not cover:

    1. Expenses incurred for pre and post hospital treatment and

    2. Expenses incurred for treatment for any of the following diseases:

    Asthma, Bronchitis, Chronic nephritis, Diarrhea and all type

    of dysenteries including Gastroenteritis, Diabetes mellitus and insipidus,

    Epilepsy, Hypertension, Influenza, cough and cold, All psychiatric or

    psychosomatic disorders, Pyrexia of, unknown origin for less than 10 days,Tonsillitis and upper respiratory tract infection including laryngitis and

    pharyngitis Arthritis, gout and rheumatism.

    Under the policy any one illness means continuous period

    of illness and it includes relapse within 45 days from the day of last

    consultation with the Hospital / Nursing home where treatment may have

    been taken. Occurrence of same illness after a lapse of 45 days will be

    considered as fresh illness for the purpose of this policy.

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    No claim is payable in respect of the following:

    All diseases/ injuries which are pre- existing when the cover incepts forthe 1sttime.

    Cost of spectacles and contact lenses, hearing aids. (these may be

    termed as normal maintenance expenses).

    Dental treatment or surgery of any kind unless requiring hospitalization.

    Various conditions commonly referred to as AIDS.

    Expenses on vitamins and tonics unless forming part of treatment.

    Treatment arising from childbirth including Caesarean section (can be

    deleted, if maternity benefit is covered).

    Voluntary medical termination of pregnancy during the first 12 weeks

    from the date of conception.

    Naturopathy treatment.

    Any disease other than those stated in clause(c ) below, contracted by

    the insured person during the first 30 days from the commencement

    date of the policy. This exclusion shall not however, apply if in the

    opinion of Panel of Medical Practitioners constituted by the company

    for the purpose, the insured person could not have known of the

    existence of the disease or any symptoms or complaints thereof at the

    time of making the proposal for insurance to the company.

    This condition shall not however apply in case of the insured person

    having been covered under this scheme or group insurance scheme

    with any of the Indian insurance companies for a continuous period of

    preceding 12 months without any break.

    During the first year of the operation of the policy the expenses on

    treatment of diseases such as Cataract, Benign Prostatic Hypertrophy,

    Hernia, Hydrocele, Piles, Sinusitis and related disorders. If these

    diseases are per- existing at the time of proposal they will not be

    covered even during subsequent period of renewal.

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    Age limit:

    This insurance is available to persons between age of 5 years- 80

    years children between the age of 3 moths and 5 years of age can be

    covered provided 1 or both parents are covered concurrently.

    Family discount

    This discount of 10% in the total premium is allowed to a family

    comprising the insured and any 1 or more of the following

    spouse

    dependent children (i.e. legitimate or legally adopted )

    dependent parents

    Cumulative Bonus:

    The sum insured is increased by 5% for each claim free

    year of insurance subject to a maximum accumulation of 10 years. In the

    event of a claim, the increased percentage will be reduced by 10% of the

    sum insured at the next renewal but the basic sum insured will remain the

    same.

    Cost of Heath Checkup:

    The insured shall be entitled to reimbursement of medical

    check up once in every 4 underwriting years subject to no claim preferred

    during this period. The cost shall not exceed 1% of the average sum insured

    during the block of 4 years. (Note: Both the above benefits apply in respect of

    continuous insurance without break. In exceptional circumstances maximum

    7 days break is allowed subject to medical examination.)

    Extension of cover:

    The cover can be extended to Nepal and Bhutan with prior

    permission.

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    Conditions:

    The more important conditions provide for the following:

    preliminary notice of claim with particulars relating to policy number,

    Name of insured person in respect of whom claim is made, Nature of

    illness/ injury and Name and address of the attending medical

    practitioner/ hospital/ nursing home should be given by the insured

    person to the company within 7 days from the date of hospitalization,

    domiciliary hospitalization.

    Final claim with original receipted bills, cash memos, claim form and listof documents as listed in the claim form etc. should be submitted to the

    company within 30 days from the date of completion of treatment.

    (Note: in extreme cases of hardship to the insured, these limits may be

    waived.)

    Sum insured and premium:

    The sum insured is available from Rs.15000/- with multiples of

    Rs.5000/- upto a maximum of Rs.500000/-.

    Domiciliary hospitalization limit is fixed at 20% of the total sum insured

    upto Rs.1 lac and 15% beyond Rs.1 lac. The domiciliary hospitalization

    is a part of the overall limit of sum insured.

    The premium is related the age of the person and to the sum insured

    selected by the insured.

    Premium upto Rs.10000/- qualifies for tax benefit under section 80D of

    Income tax act.

    Proposal form:

    The proposal form incorporates a prospectus which gives details of the

    cover, such as coverage, exclusions, provisions etc.The proposer has

    to sign it as having noted its contents.

    The special features of the declaration to be signed by the proposer

    are as follows.

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    The insured person consents and authorizes the insurer to seek

    medical information from any hospital/ medical practitioner who has at

    any time attended or may attend concerning any illness which affects

    his physical or mental health.

    The insured person confirms that he has read the prospectus forming

    part of the form and is willing to accept the terms and conditions.

    The declaration includes the usual warranty regarding the truth of the

    statement and the proposal form as the basis of the contact.

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    3.1.2. Group Mediclaim policy:

    The group mediclaim is available to any Group/

    Association/ Institution/ Corporate body of more provided it has a central

    administration point and subject to a minimum number of persons to be

    covered. The group should fall clearly under the same categories as specified

    for group P.A.policy.

    The group policy is issued in the name of the group/

    association/institution/corporate body (called insured) with a schedule of

    names of the members including his/her eligible family members (called

    insured persons) forming part of the policy.

    The coverage under the policy is the same as under individual mediclaim

    policy with the following differences:-

    Cumulative bonus and health check up expense are not payable.

    Group discount in the premium is available.

    Renewal premium is subject to bonus/malus clause.

    Maternity benefit extension is available at extra premium.

    Group discount:

    The group discount is allowed according to scale

    depending upon the total number of insured persons covered under the

    group policy at the inception of the policy as in group P.A.policy.

    Bonus/malus:

    Low claim ratio discount (bonus)

    Low claim ratio discount is allowed on the total premiumat renewal only depending upon the incurred claims ratio for the entire group.

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    (Incurred claims means claims paid plus claims outstanding at the end less

    outstanding at the beginning of the period in respect of the group insured

    under the policy during the relevant period)

    The discount ranges from 5 %( claims ratio not exceeding 60%) to 40 %(

    claim ratio not exceeding 25%).

    High claim ratio loading (malus):

    On the same basis of incurred claims ratio, loading is

    applied to the renewal premium for adverse claims experience. The loading

    ranges from 25% (ratio between 80% and 100%) to 150% (ratio176%to

    200%). If the ratio is over 200% cover is reviewed.

    Maternity expenses benefit extension:

    This is an optional cover which is available on payment

    of 10% of the total basic premium for all the insured persons under the policy.

    Total basic premium means the total premium computed before applying

    group discount and/or high claim ratio loading. Low claim discount and

    special discount in lieu of agency commission.

    Option for maternity benefits has to be exercised at the

    inception of the policy period and no refund is allowable in case of insureds

    cancellation of this option during currency of the policy.

    The maximum benefit allowable is upto Rs.50000/- or

    the sum insured opted by the member of the group, whichever is lower.

    The special conditions applicable to this extension are:

    These benefits are admissible only if the expenses are incurred in

    hospital/nursing home as in patients in India.

    A waiting period of 9 months is applicable for payment of any claim

    relating to normal delivery or caesarean section or abdominal operation

    for extra uterine pregnancy. The waiting period may be relaxed only in

    case of delivery, miscarriage, or abortion induced by accident or other

    medical emergency.

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    Claim in respect of delivery for only first two children will be considered

    in respect of any 1 insured person. Those insured persons who already

    have 2 or more living children will not be eligible for this benefit.

    Expenses incurred in connection with voluntary medical termination of

    pregnancy during the first 12 weeks from the date of conception are not

    covered.

    Pre-natal and post-natal expenses are not covered unless admitted in

    hospital/nursing home and treatment is taken there.

    Details of insured person:

    The insured is required to furnish a complete list of insured persons in

    the prescribed format according to sum insured.

    Any additions and deletions during the currency of the policy should be

    intimated to the company in the same format. However such additions

    and deletions will be incorporated in the policy from the first day of the

    following month subject to pro-rata premium adjustment.

    No change of sum insured for any insured person will be permitted

    during the currency of the policy.

    No refund of premium is allowed for deletion of insured person if he or

    she has recovered a claim under the policy.

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    3.1.3. Family Floater policy

    For instance a person wants a health insurance for

    himself, his spouse & their children; the Family Floater plan offers insurance

    coverage to the entire family under one premium payment. Lets take an

    example wherein the person insures himself, his spouse & the dependent

    children with the individual insurance plans with a sum assured of Rs. 1 lakhs

    each, he ends up paying premium ranging between Rs. 1000 - Rs. 2000 for

    each family member. On the other hand if the person would have opted for

    the family floater plan with the sum assured of Rs. 3 lakhs, the total premium

    would surely be less than the separate premium payments in individual

    health insurance plans. Moreover the separate health plan holds the cover of

    only Rs. 1 lakh as against Rs. 3 lakh in case of the Floater plan thus helping

    the family in case the medical treatment costs go beyond that.

    What are the benefits of a Floater Plan?

    A single policy takes care of your entire family

    Single premium for the entire family.

    The sum insured floats over the entire family.

    One single policy covers the details of entire family.

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    3.1.4. Unit Linked Health Plans:

    Taking the route, health insurance companies too have

    introduced Unit Linked Health Plans. Such plans combine health insurance

    with investment and pay back an amount at the end of the insurance term.

    The returns of course are dependent on market performance. These plans

    are very new and still in development phase. This is only recommended for

    people who can handle market linked products like ULIP and ULPP.

    What are ULIPS?

    ULIPS are investment cum insurance products, you

    take insurance worth XYZ amount and then you pay some premium every

    year. Out of your premiums some amount is cut as administrative expenses

    (Premium allocation) and out of rest the mortality charges are cut for your

    insurance and the rest is invested in market linked things.

    Some points to note here are:

    You decide the tenure of your Insurance and the insurance amount,depending on which mortality charges are cut from your premium you

    pay.

    The Premium allocation charges are very high in initial years

    (especially 1st year) and then reduce in later years. Thatsthe reason

    one should be invested in ULIP for long period to get maximum benefit.

    The money actually invested is invested as per your directions

    ULIPS have different plans with different risk-return profile. One plan

    may have allocation of 80-20 to equity and debt, some other can have

    50-50 and some can have 20-80 and like this.

    The investor can switch between the investment styles as and when he

    wants (max 4 free switches in most of the cases, there after some

    nominal fees).

    ULIPS have sec 80C benefit; minimum of 3 premiums has to be paid.

    ULIPS must be considered for long term investment products, so that

    the high cost in initial years are averaged out over longer period.

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    Advantages:

    The switching over different styles is not costly, you are not charged

    when you switch, which make them flexible.

    ULIPS are innovative products and suits people who want long term

    wealth creation with some insurance too.

    Disadvantages:

    They are not good product for people who require high cover and can

    pay less cover, because premium depends on the cover. Higher the

    cover, higher the premium. So these people must take term insurance

    for their life insurance.

    For people investing only for tax benefit must avoid them as they will

    prove to be costly in short term because of there high allocation

    charges.

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    3.1.5. Jan Arogya Bima Policy

    The coverage under the policy is along the lines of the individual

    mediclaim policy except that cumulative bonus and medical check up

    benefits are not included.

    The policy is available to individuals and family members. The age limit

    is 5 to 70 years. Children between the age 3 months and 5 years can

    be covered provided one or both parents are covered concurrently.

    The sum insured per insured person is restricted to Rs.5000/- and the

    premium payable as per the following table.

    Age of the person insured Upto 46 years 46-55 56-65 66-70

    Head of the family 70 100 120 140

    Spouse 70 100 120 140

    Dependent child upto 25 years 50 50 50 50

    For family of 2+1 dependent

    children

    190 250 290 330

    Premium upto Rs.10000/- qualifies for tax benefit under section 80D of the

    income tax act. Service tax is not applicable to the policy.

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    3.1.6. Cancer insurance

    There are 2 cancer insurance schemes:

    o

    Indian cancer societyo Cancer patients aid association (CPAA)

    Cancer policy (Indian cancer society):

    The insurance scheme came into effect from July, 1985

    and is modified from 1stmay, 1987 and is available to members of Indian

    cancer society.

    A proposal form and a membership form will have to

    completed by each proposer/member.The policy will come into operation only

    after a period of 1 month from the date of enrollment of the member, which

    date is also the date of commencement of the insurance.

    The policy is valid for 12 months and each insured

    member has to pay the annual subscription of the society before its expiry.

    However, the renewal insurance will have no waiting period.

    The policy covers the insured member and his/her

    spouse. During the operation of this insurance, if the insured member or

    spouse contracts cancer then the company will pay to the insured, the cost of

    diagnosis, biopsy, surgery, chemotherapy, radiotherapy, hospitalization and

    rehabilitation to the extent of Rs. 500000/-. For each claim free renewal

    (without break) 5% cumulative bonus would be allowed, subject to maximum

    of 50%.

    Reimbursement of claims is made (on quarterly basis)

    on production of medical/hospital bills until the entire sum of Rs. 50000/- (and

    cumulative member or his spouse is declared cured, whichever is earlier. The

    cancer policy can be extended to cover 2 dependent children on payment of

    Rs. 50% per child. The indemnity limit is Rs. 50000/- per child with

    cumulative bonus applicable to each child. Claim by one insured child doesnot affect liability under the policy in respect of the other child. The policy will

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    not cease to be effective if there is a claim by one of the children. The policy

    covers only allopathic mode of treatment. It is possible to grant a policy on

    group basis. The employer has to arrange for a well-wisher corporate

    membership. A group discount would apply on membership fee as well as

    premium amount.

    Cancer policy (CPAA):

    This policy is granted to members of the cancer patients

    aid association (CPAA). The insured by virtue of being a member of the

    CPAA has to submit a proposal from with a declaration that he is in good

    health and is not suffering from cancer. He has to undergo a medical check-

    up and a certification to that effect has to be made by CPAA of the proposal

    form. The proposal form and the certification form part of the contract of

    insurance. The premium shall be paid by the insured to CPAA as part of the

    membership fee and this also applies as a condition precedent to the renewal

    of the policy.

    (NOTE: group policies are also available with discount in the premium as in

    the case of group mediclaim policies)

    Coverage:

    If the insured during the currency of the policy suffers

    from cancer, the policy will pay to the insured medical/ surgical/

    hospitalization/ diagnostic expenses actually and necessarily incurred but not

    exceeding the sum insured. Only allopathic mode of treatment is covered.

    The sum insured is increased by 5% in respect of each completed year

    during which the policy shall have been in force prior to the claim but the

    maximum increase is restricted to 50% of the sum insured. This cumulative

    bonus is lost if the policy is not renewed which 30 days after its expiry.

    Exclusions

    No claim is payable

    If the insured contracts cancer within a period of 30 days from the date

    of becoming a member of the CPAA

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    Unless the diagnostic investigation reveals positive presence of cancer.

    By reason of the contact of the insured with radiation or radioactivity

    from any source other than diagnostic or therapeutic source.

    If the insured ceases to be a member of the CPAA.

    Claim procedure:

    Notice of claim shall be served upon the insurers within 30 days of the

    happening of any event which gives rise to a claim.

    The claim shall be substantiated with supporting documents within a

    reasonable period, duly certified by the CPAA.

    Claim for reimbursement of medical expense may be submitted on

    quarterly basis.

    Differences as to the claim or quantum thereof are to be referred to the

    committee set up by CPAA and new India.

    If the company disclaims liability or there is dispute as to the quantum

    payable and if such questions are not referred to the committee within

    3 months thereafter the claim is deemed to have abandoned.

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    3.1.7. Bhavishya Arogya policy

    This is a deferred mediclaim policy and may be taken at

    any age from 25 years onwards up to 55years. The retirement age to be

    selected by the insured at the time of taking the policy may be between 55

    and 60 years. The amount of maximum total benefit available under the basic

    policy will be Rs.50000/- during the lifetime of the insured commencing from,

    the policy retirement age and shall not exceed Rs.20000/- per any one illness

    or injury. The coverage under the policy is, more or less, the same as under

    mediclaim policy with the following differences:

    Pre and post hospitalization are not covered under the policy.

    The following exclusions of the mediclaim policy do not appear in the

    policy:

    30 days waiting period

    1styear exclusions

    Pre-existing diseases

    Circumcision, pregnancy etc.

    Policy retirement age means the age selected by the

    insured at the time of signing the proposal and specified in the schedule for

    the purpose of commencement of benefit in the policy. The policy retirement

    age cannot be advanced due to any cause during the pre-retirement period.

    Pre-retirement period means the period commencing from the date of

    acceptance of the proposal and ending with the policy retirement age

    specified in the schedule during which the insured shall be paying

    installment/single premium deposit as applicable. The scheme provides for

    payment of insurance premium in easy annual installment commencing from

    any selected date between 25 years and 55 years and ending with the

    attainment of selected age of retirement i.e. between 55years and 60 years.

    The scheme allows a suitable refund of premium already paid in the event of

    premature death of the insured as per prescribed scale. In case of voluntary

    withdrawals from scheme refund is allowed to the extent of 75% of the refund

    payable on death. After commencement of risk at policy retirement age there

    is, provision for refund at appropriate scale, in case of death provided no

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    claim is preferred. Similarly in case of voluntary withdrawals from the scheme

    refund is allowed to extent of 75% of refund payable on death, provided no

    claim is prefer

    Special / Extra benefits:

    The insured can increase the amount of benefit anytime

    prior to 4years of retirement age specified in the policy by additional units of

    Rs.10000/-each. Premium payable for such unit shall be at the rates of 20%

    of the basic premium applicable for the relevant age at which such additional

    units opted for.

    No pre insurance medical examination is required Advancement / postponement of retirement age is not permissible

    The scheme provides for assignment

    Premium upto Rs.10000/- per year will be eligible for exemption under

    income tax act 80D.

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    3.1.8. STAR TRUE VALUE HEALTH INSURANCE POLICY -

    Royal Sundaram General Insurance CompanyLimited

    Star True Value Health Insurance is designed to offer

    health insurance to the masses. It is one of the cheapest health insurance

    available in the market. The premiums are very economical, making it within

    the reach of many. Star True Value is available in various options ranging

    from a minimum sum assured of Rs. 30,000 to a maximum of Rs. 80,000.

    However, the premium would depend on the age of the person proposed for

    the insurance.

    True Value Benefits:

    Hospitalization Cover: This would cover the insured person for in-patient

    hospitalization expenses provided the insured person is hospitalized for a

    minimum of 24 hours. These expenses include room rent and boarding

    expenses up to a maximum of 2% of the sum insured per day

    Nursing expenses

    Surgeon's fees, Consultant's fees, Anesthetist fees.

    Cost of blood, oxygen, operation theatre charges, diagnostic expenses,

    cost of pace makers.

    Cost of medicines and drugs.

    However, for Cataract surgery the cover is limited to Rs.20,000/-

    Special Feature:

    Cumulative Bonus ranging from 5% for every claim free year of

    insurance up to 10 claim free years of continuous insurance.

    Can members of a family be covered under a single policy?

    Yes. Family would mean the proposer, spouse & dependent children

    up to 25 years of age and dependent parents.

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    A discount of 10% on the premium is available if 2 persons are covered

    and 15% discount on the premium is available if more than 2 persons

    are covered.

    Premium Table

    Sum Insured (in

    Rs)

    5 ms

    25 yrs

    26 yrs

    35 yrs

    36 yrs -

    45 yrs

    46 yrs

    55 yrs

    30000 340 375 475 0

    40000 400 450 525 0

    60000 550 620 700 1275

    70000 600 710 900 1515

    80000 660 850 1005 1800

    Premium in INR (Excluding Service Tax) Group policy is not admissible under

    this plan. Group policy is not admissible under this plan.

    Claim Procedure:

    Call the Star Health 24 hour help-line to register the details of

    hospitalization.

    Kindly mention your Star Health ID number for easy access to your

    policy details.

    In case of a planned hospitalization, please register 24 hours prior to

    admission to the hospital

    In case of emergency hospitalization, please register within 24 hours of

    hospitalization

    In all network hospitals, the cashless facility on payments can beavailed

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    For treatment in non-network hospitals, payments must be made up-

    front to the hospital. Reimbursement of the expenses will be effected

    by Star Health, on submission of the necessary documents.

    Exclusions:

    All expenses incurred in connection with treatment of any illness/

    disease/ condition, which is pre-existing at the time of commencement

    of insurance.

    Treatment of illness/ disease/ sickness contracted by the Insured

    Person during the first 30 days from the commencement of the policy.

    Expenses incurred in the first two years of continuous operation of

    insurance cover on treatment - Cataract, Hysterectomy, for

    Menorrhagia or Fibromioma, Knee replacement surgery (other than

    caused by an accident), Joint replacement surgery (other than caused

    by an accident),Prolapsed Inter-vertebral Disc (other than caused by

    an accident),Varicose veins / ulcers.

    Expenses incurred during the first year of operation of the insurance on

    treatment of diseases such as Benign prostate, Hypertrophy, Hernia,

    Hydrocele, Fistula in anus, Piles, Sinusitis and related disorders, Gall

    Stone / Renal Stone removal.

    Naturopathy treatment

    Expenses, which are purely diagnostic in nature with no positive

    existence of any disease.

    Expenses incurred for treatment of disease/illness/accidental injuries

    by systems of medicines other than allopathic.

    Expenses incurred for treatment of congenital

    diseases/defect/anomalies.

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    Eligibility:

    Any person aged between 5 months and 55 (age at entry) years can

    take this insurance.

    Benefits of availing this policy:

    24 hour Help-line.

    Health Tips through Company's web enabled services.

    Free General Physician advice.

    Cashless facility if the treatment is availed at any of the Network

    Hospitals.

    Advantages:

    Cashless hospitalization facility at over more than 4000 network

    hospitals across India.

    Attractive family discount on premium amount ranging from 10% to

    15%.

    Cumulative bonus ranging from 5% to 25% for every claim free year

    renewal.

    Tax benefit on premium paid (cheque or credit) under section 80C of

    the Income Tax Act, 1961.

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    3.1.9. Travel insurance policy

    The Easy Travel Insurance Plan from Apollo Munich

    Healthis a short-term travel insurance plan that aims to make your and your

    familys travel safe and hassle free. It guards you against illnesses, thefts and

    other unexpected occurrences that can impact your plans while you travel. It

    covers you and your family members (including spouse, dependent parents

    and children) and offers you benefits, such as emergency cash, family

    transportation, transport of imported medicines, doctor referrals, etc. In

    addition to this, you have access to latest travel and health-related

    information.

    This policy is available in four variants which are tailor-

    made to cover a wide range of travel emergencies. So now you have

    freedom to pick what suits you the best and enjoy comprehensive travel-

    related benefits.

    You can access the following services:

    Medical advice on telephone 24x7, while travelling

    Referrals of medical service providers and hospitals

    Reimbursement of medical expenses incurred during hospitalization

    where ever possible

    Lost of luggage assistance

    Lost passport assistance

    Embassy and interpreter referral services and much more

    No medical tests required upto 70 years of age and much more for atrip of duration not more than 180 days.

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    3.2 DIFFERENT TYPES OF SCHEMES IN INDIA:

    3.2.1 Employee State Insurance (ESI) Scheme:

    Under the ES I Act, 1948 ES I Scheme provides

    protection to employees against loss of wages due to inability to work due to

    sickness, maternity, disability and death due to employment injury. It also

    provides medical care to employees and their family members without fee for

    service. When implemented for the first time in India at two centers namely

    Delhi and Kanpur simultaneously in February 1952, it covered about 1.2 lakh

    employees. Presently the scheme is spread over 22 states and Union

    territories across India covering 91lakh employees and more than 350 lakhbeneficiaries.

    The Act compulsorily covers:

    All power using non- seasonal factories employing 10 or more per

    sons;

    All non-power using factories employing 20 or more employees and

    Service establishments like shops, hotels restaurants, cinema, and

    road transport and news paper s are covered. ESIC is a corporate

    semi- government body headed by Union Minister of Labor as

    Chairman and the Director General as chief executive.

    Its members are representatives of central and state governments,

    employers, employees, medical profession and parliament. The

    financing of the scheme is done by Employees State Insurance

    Corporation (ESIC)

    This is made up of contributions from:

    Employees who contribute at the rate 1.75 percent of their wages (if

    daily wage is Rs.25 or less, his contribution is waived);

    Employers who contribute at the rate of 4. 75 per cent of total wage

    bills of their employees to contribution on behalf and for employees

    having daily wage Of Rs. 25 or less; and

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    State Governments contribute 12.5 per cent of total shareable

    expenditure worked out by prescribed ceiling on expenditure which is

    Rs. 600 per insured

    The State Government runs the medical services of

    this scheme of social insurance meant for employees covered under the ESI

    Act 1948. This scheme - compulsory and contributory in nature - provide

    uniform package of medical and cash benefits to insured persons is

    implemented through special ESI hospitals and diagnostic centers,

    dispensaries and panel doctors. The deliver y of medical care is through

    service (direct) s stemmed and/or panel (indirect) system. It provides

    allopathic medical care, but medical care by other systems like ayurvedic and

    homeopathy in the states is also provided as per the state government

    decision. The medical care consists of preventive, promotive, curative and

    rehabilitative types of services are provided by the scheme through its own

    network or through arrangements with reputed government or private

    institutions by concept of proper referral system and regionalization.

    Health Insurance for the aged:

    Till a few years back, health insurance companies

    were reluctant to provide cover for the aged. But nowadays there are a lot of

    insurance companies providing policies for the senior citizens. Insurance

    cover paid for a person of age 65 years and above, can provide additional tax

    exemption of up to Rs.20,000. But keep in mind that the premium rates are

    higher for senior citizens. For the employed, another option is to approach

    the employer to negotiate with the official insurer to provide an option for

    additional cover to parents. Since the volumes are high, the insurer can

    provide such added cover at attractive premium rates.

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    Existing infrastructure under ESIS in India

    Particulars Units

    No. of Centers 632

    No. of Insured Persons/Family Units 84,45,000

    ESI Hospitals 125

    Number of ESI Hospital Beds 23,334

    ESI Dispensaries 1,443

    Insurance Medical Officers 6,220

    Insurance Medical Practitioners 2,900

    Employment and study policy:

    The policy is designed for Indian citizens temporarily

    posted abroad in a sedentary non-manual work or students prosecuting

    studies or engaging in research activities abroad.

    The salient features of the scheme are:

    Age limit : 18to 60 years Limit of liability: U.S. $ 75000/-any one insured person and in all any

    one period of insurance.

    Deductible

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    3.2.2Central Government Health Scheme (CGHS):

    Since 1954, all employees of the Central Government

    (present and retired); some autonomous and semi- government

    organizations, MPs, judges, freedom fighters and journalists are covered

    under the Central Government Health Scheme (CGHS). This scheme was

    designed to replace the cumbersome and expensive system of

    reimbursements (GOI, 1994). It aims at providing comprehensive medical

    care to the Central Government employees and the benefits offered include

    all outpatient facilities, and preventive and promotive care in dispensaries.

    Inpatient facilities in government hospitals and approved private hospitals are

    also covered. This scheme is mainly funded through Central Government

    funds, with premiums ranging from Rs 15 to Rs 150 per month based on

    salary scales. The coverage of this scheme has grown substantially with

    provision for the non-allopathic systems of medicine as well as for allopathic.

    Beneficiaries at this moment are around 432 000, spread across 22 cities.

    The CGHS has been criticized from the point of view of quality and

    accessibility. Subscribers have complained of high out-of- pocket expenses

    due to slow reimbursement and incomplete coverage for private health care(as only 80% of cost is reimbursed if referral is made to private facility when

    such facilities are not available with the CGHS).

    NGOS / Community-Based Health Insurance

    Community- based funds refer to schemes where

    members prepay a set amount each year for specified services. The premium

    are usually flat rate (not income-related) and therefore not progressive.

    Making profit is not the purpose of these funds, but rather improving access to

    services. Often there is a problem with adverse selection because of a large

    number of high-risk members, since premiums are not based on assessment

    of individual risk status. Exemptions may be adopted as a means of assisting

    the poor, but this will also have adverse effect on the ability of the insurance

    fund to meet the cost of benefits.

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    Community- based schemes are typically targeted at

    poorer populations living in communities, in which they are involved in

    defining contribution level and collecting mechanisms, defining the content of

    the benefit package, and / or allocating the schemes, financial resources

    (Such schemes are generally run by trust hospitals or non-governmental

    organizations (NGOs). The benefits offered are mainly in terms of preventive

    care, though ambulatory and in- patient care is also covered. Such schemes

    tend to be financed through patient collection, government grants and

    donations. Increasingly in India, CBHI schemes are negotiating with the for

    profit insurers for the purchase of custom designed group insurance policies.However, the coverage of such schemes is low, covering about 30-50 million

    indicates that many community- based insurance schemes suffer from poor

    design and management, fail to include the poorest- of-the poor, have low

    members hip and require extensive financial support. Community based

    health insurance (CBHI) schemes offered by Self-Employed Women's

    Association (SEWA), Gujarat, Tribhuvandas Foundation (TF), Anand, or The

    Mallur Milk Cooperative in Karnataka come under non-progressive funds withflat rate premia. The schemes are launched to improve the access of health

    services, rather than making profit.

    Health Insurance Initiatives by State Governments:

    In the recent past, various state governments have

    begun health insurance initiatives. For instance, the Andhra Pradesh

    government is implementing the Aarogya Raksha Scheme since 2000, with a

    view to increase the utilization of permanent methods of family planning by

    covering the health risks of the acceptors. All people living below the poverty

    line and those who accept permanent methods of family planning are eligible

    to be covered under this scheme. The benefits to be availed of, include

    hospitalization costs up to Rs. 4000 per year for the acceptor and for his / her

    two children for a total period of five years from date of the family planning

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    operation. The coverage is for common illnesses and accident insurance

    benefits are also offered.

    This scheme can be availed by all permanent

    residents of Goa with an income below Rs 50 000 per annum for

    hospitalization care, which is not available within the government system. The

    non-availability of services requires certification from the hospital Dean or

    Director Health Services. The overall limit is Rs 30000 for the insured person

    for a period of one year.

    The aim of the project was to develop and test a

    model of community health financing suited for rural community, thereby

    increasing the access to medical care of the poor. The beneficiaries include

    the entire population of these blocks. The premium is Rs 30 per person per

    year, with the Government of Karnataka subsidizing the premium of those

    below poverty line and those belonging to Scheduled Castes/ Scheduled

    Tribes. This premium entitles them to hospitalization coverage in the

    government hospitals up to a maximum of Rs 2500 per year, including

    hospitalization for common illnesses, ambulance charges, loss of wages at

    Rs. 50 per day as well as drug expenses at Rs 50 per day. Reimbursements

    are made to an insurance fund which has been set up by the NGO / P RI with

    the support of UNDP.

    The Government of Kerala is planning to launch a

    pilot project of health insurance for the 30% families living below the poverty

    line. Currently, negotiations are under way with the I RA to seek service tax

    exemption. The proposed premium is Rs 250 plus 5% tax. The maximum

    benefit per family would be Rs 20 000. The amount for the premium would be

    recovered from the drug budget (Rs 100), the P RI (Rs 100) and from the

    beneficiary (Rs 62.50) while the benefits available would include cover for

    hospitalization, deliveries involving surgical procedures (either to the mother

    or the newborn). Instead of payment by the beneficiary, Smart Card facility

    would be offered. This scheme would be applicable in 216 government

    hospitals.

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    CHAPTER 4

    HEALTH INSURANCE

    PREMIUMS & CLAIMS

    SETTLEMENT

    PROCESS

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    4.1 TAX EXEMPTION FROM HEALTH INSURANCE PREMIUMS

    Sec 80D covers Health Insurance. You can get exemptions of

    Upto Rs. 15,000 paid for self + spouse + children.

    Upto Rs 15,000 paid for Parents (Rs 20,000 if parents are senior

    citizens)

    So in total if you pay your health insurance and your parents health

    Insurance premium, you can save upto maximum of 35,000.

    Health Insurance Claims settlement process

    A bit on how health insurance claims processing

    works. In most cases, the Insurance companies appoint a third part

    administrator (TPA) for claims processing. That means once the health

    insurance policy is sold, the insurer passes on the baton to the TPA. In case

    of a claim, the insured has to get in touch with the TPA for all versification

    and formalities.

    There are 2 waysby which health insurance claims are settled:

    Cashless: For availing cashless treatment (only at authorized network

    hospitals), the TPA has to be notified in advance (for planned

    hospitalization) or within the stipulated time limits (for emergencies).

    The insurance desk at hospitals usually helps with all paper work. The

    claim amount need to be approved by the TPA, and the hospital settles

    the amount with the TPA/ Insurer. Typically there will be exclusions and

    such amount will have to be settled directly at the hospital.

    Reimbursement: Reimbursement facility can be availed at both the

    network and non-network hospitals. Here the insured avails the

    treatment and settles the hospital bills directly at the hospital. The

    insured can claim reimbursement for hospitalization by submitting

    relevant bills/ documents for the claimed amount to the TPA.

    The TPA mode of claims settling has its own

    problems. The TPA is incentivized to limit insurance claims and they are not

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    the ones who sells the policy. There are many cases where the insured had

    a tough time to claim for his hospital expenses. So before taking health

    insurance it would be useful to check who the TPA is and how good are they

    when it comes to claims processing. Internet search and a friendly chat with

    the hospital staff can give you good insight on the insurer/ TPA. There are

    also some health insurance providers who do not employ TPAs and does

    claims settlement directly (this is called In-house TPA).

    Saving on Health Insurance Premiums:

    Nobody likes paying more than its worth. Getting the most appropriate

    and affordable Health insurance is dependent on a few aspects likeyour choices, capability to choose and of courses the health conditions

    of the policy buyer. But by following a few steps you can save a good

    lot on your health insurance premium.

    Smokers health is always at risk, so people with smoking habits will

    end up paying more premium than a non smoker. So in order to reduce

    the premium, one has to quit smoking.

    High blood pressure is not a good sign and is advisable to keep it

    under control. Keeping control on high blood pressure can help you

    reduce the premium cost.

    If you are in good health, then automatically your premium cost will be

    lower than the people whose have health problems.

    Comparing the quotes from various insurers is an important aspect to

    save on health insurance premium. Though you need to shop for a

    while to have an idea. Make sure you get some affordable online health

    insurance quotes.

    Compare the benefits of various health insurance plans. Perform deep

    research to find out what discounts you can avail for in various

    appropriate policies.

    Make your choices for cover very carefully; take only the coverage you

    require. Your random selection might end you up paying out more than

    actually required. So a right decision making is important.

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    4.2 How to file a health insurance claim:

    Taking health insurance and paying premium is one story and filing for

    claim is another. Claiming benefits can be quiet tricky at times so you

    have to be smart and careful while filing for the claim. To file a Health

    Insurance claim with your Insurance Company one has to keep the

    following things in mind.

    Claim form duly filled and signed by the claimant.

    Discharge Certificate from the hospital

    All documents pertaining to the illness starting from the date it was first

    detected i.e. Doctor's consultation reports/history

    Bills, Receipts, Cash Memos from hospital supported by proper

    prescription.

    Receipt and diagnostic test report supported by a note from the

    attending medical practitioner/surgeon justifying such diagnostics.

    Attending doctors certificate stating the nature of the operation

    performed, bill and receipt. Attending consultant's / specialist's /

    anaesthetistsbill and receipt, and certificate regarding diagnosis.

    Certificate from the attending medical practitioner / surgeon that the

    patient is fully cured.

    Details of previous policies if the details are not already with TPA

    except in the case of accidents.

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    CHAPTER 5

    FUTURE OF

    HEALTH

    INSURANCE

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    FUTURE OF HEALTH INSURANCE:

    Given the situation, there are few issues of concernor barriers towards implementing a social health insurance scheme in India.

    These are enumerated below along with the possible way ahead. India is a

    low-income country with 26% population living below the poverty line, and

    35% illiterate population with skewed health risks. Insurance is limited to only

    a small proportion of people in the organized sector covering less than 10% of

    the total population. Currently, there no mechanism or infrastructure for

    collecting mandatory premium among the large informal sector. Even in

    terms of the existing schemes, there is insufficient and inadequate information

    about the various schemes. Data gaps also prevail. Much of the focus of the

    existing schemes is on hospital expenses.

    5.1 Managed health care:

    This is a new and innovative concept in health

    insurance. Broadly speaking, it refers to provision of total and integratedclaims service, through what are known as Third Party Administrators, to

    health insurance policyholders.

    The services made available include:

    Wide network of hospitals/nursing homes all over India where a policy

    holder can avail of cashless services.

    Cashless services mean admission to network hospitals without

    admission fees or deposits and payment of covered expenses at the

    time of discharge. Thus, there is no need for follow-ups for

    reimbursement by patient or relative.

    Medical transportation

    Personalized care and service.

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    Future Change Expected:

    At present when the Health Insurance market is

    growing there are large numbers of proposals under consideration with IRDA,

    Insurance Companies, Government Agencies & Corporate bodies. According

    to newspaper reports some of these are:-

    Licenses are now being issued to Health Insurance companies by

    IRDA. Star Health was the first health insurance co. which has become

    operational in early 2006. Apollo DKV started operations in Aus 2007.

    Max, Fortis, Dr Reddy Lab has plans to enter this business. In view of increase in medication costs the sum assured limit of Rs 5,

    00,000 has been increased to Rs. 10, 00,000. New India is working

    proposal to increase the sum assured limit to Rs 25, 00,000. This is a

    welcome step.

    In view of high claims ratio should there be limit on amount payable on

    specific disease or treatment. According to recent news item, which

    appeared in newspaper on June29, 2005 the proposal is to limit it atRs. 1, 62, 000 for heart ailment. Customers have reacted unfavorably

    to this news item.

    This will be major deterrent to customers to go in for Health Insurance

    of Rs. 5, 00, 000 or Say Rs.10, 00, 000. This proposal is contradictory

    to point 2. General opinion emerging is that if this is done then many

    customers will reduce their coverage from Rs. 5, 00,000 to Rs. 2,

    00,000.

    Insurance companies are becoming restrictive in issue of health insurance

    policies and are considering:-

    Minimum sum assured of Rs. 1 lakh.

    Maximum age at entry of 50 years or so. Those having policies in force

    will however go on getting renewal of policies. There is a proposal of

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    introducing concept of loading for senior citizens who are above 60

    years.

    Insurance premium may increase by 100% in near future say in 2008

    due to Prime Minister's announcement of Rs 2000 Crores health

    insurance plan for poor.

    Hospitals / Pharma Co's may become promoters / investors in health

    insurance companies. It may result in better healthcare management

    as resources can be effectively utilized for the welfare of the society.

    Some projections are indicating that by 2010 Health Insurance

    premium will touch Rs. 25000 crores.

    Stricter norms will be introduced for TPA's. Concept of Co pays to get

    strengthened so that senior citizens have no problem in getting

    insured.

    Each family gets a smart card! The smart card

    entitles its bearer to a list of pre-specified in-patient services in the second

    month following enrollment. So, for example, someone enrolled in the month

    of February can use the card at designated hospitals as of April 1st of the

    same year through March 31st. (Provisions exist for pro-rata premium

    payments to the insurance company in the event of partial year enrolment

    subject to a minimum of six months.)

    The transaction process begins when the member

    visits the participating hospital and his or her card is swiped. If a diagnosis

    leads to a procedure, the appropriate prescribed package is selected in the

    software menu. Upon release, the card is again swiped and the pre-specified

    cost of the procedure is deducted from the 30,000 rupee total on the card. A

    receipt is printed and provided to the member. Initiating stand alone health

    insurance companies is a recent development in India, which is expected to

    boost the penetration of health insurance (HI) in the country. Currently less

    than 1% of the population is covered under commercial health insurance in

    comparison to almost 60-65 % in developed countries. It is expected that with

    greater penetration of HI, the access to health care will also increase. Lack of

    credible data and expertise in Health Insurance is expected to be fulfilled by

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    such a development. Recommendations of the subcommittee at IRDA on

    Stand Alone Health Insurance companies has also recommended lowering of

    capital requirements from Rs. 100 crores to Rs. 50 crores, as well as

    increasing Foreign Direct Investment over the existing 26% cap.

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    5.2 LIC CHILD FUTURE PLAN:

    LIC Child Future plan is one of the plans that is

    designed specifically in order to meet the educational, marriage expense, and

    other important needs of the growing children.

    What is the risk cover that comes along with this policy?

    It gives a risk cover on the life of the child during the term of LIC Child

    Future plan as well as during the extended term which includes 7 years

    after the expiry of the term of policy. On survival of the life of the

    assured child, a number of survival benefits are provided to the child

    upto the end of the specified durations.

    A lot of options are provided to choose in case of Sum assured,

    maturity age, term of policy, mode of paying the premium amount, and

    premium waiver benefit. The premium