Lecture

Class: FY BSc
Subject : Non-Life Insurance – Products, Principles and Practice
Subject Code: PUSASQF2.5
Chapter: Chapter 3
Chapter Name: Health Insurance

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Today’s
Agenda
1. Introduction to Health Insurance? 4. Claims
1. What is Health Insurance? 1. Cashless claim settlement procedure
2. Why should you buy Health Insurance? 2. Reimbursement claim settlement
3. Segment-wise business overview procedure
4. Health Insurance Coverage 3. Documents Required to Claim Health Insurance
5. Things to consider while buying
5. Impact of Covid on Health Insurance sector
2. Types of Health Insurance
1. What is covered by health insurance? 6. Frauds
2. What is not covered?
7. Role of actuaries in Health Insurance
3. Health Insurance product
1. Indemnity based products
2. Fixed benefit based products
3. Factors influencing Health Insurance premiums

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1.1 What is Health Insurance?
The term health insurance is a type of
insurance that covers your medical expenses.
Health insurance can reimburse the insured for
expenses incurred from illness or injury, or pay
the care provider directly.

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1.1 Is buying Health Insurance popular in India?

Do you have a health Did you consider buying it

insurance plan? now or before covid ?

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1.2 Why should you buy Health Insurance?

•Financial Coverage

•Rising Inflation

•Tax Exemption

•Affordable Policies

•Changing Lifestyle

•Fall Back Option

https://www.iciciprulife.com/health-insurance/reasons-why-you-should-buy-health-insurance.html

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1.3 Segment-wise business overview
Gross Direct Premium income (in and outside India) written by non-life Insurance Industry increased from Rs.
1,53,438 crores in 2017-18 to Rs. 172,483 crores in 2018-19. Personal lines of business namely Motor and Health &
Personal Accident insurance constituted close to two-thirds of the Non-Life Insurance premium. Crop insurance as
an emerging segment comprises majority premium in Other Misc.

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1.4 Health Insurance Coverage
The Health & Personal Accident Insurance segment has grown at a CAGR of 18.2% over the period
2010-11 to 2019-20. Health Insurance comprises of around 91% of the segment. Health & Personal
Accident has crossed the 50,000 Cr mark for the second time over.

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1.4 Health Insurance Coverage

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1.5 Things to consider while buying
1.Inclusions and exclusions of the plan
The coverage of the health insurance plan (inclusions) and the conditions against which a claim cannot be made
(exclusions) determine the scope of the policy.
2.Choosing the right health insurance company
The speed of the claim processing varies from insurer to insurer, and thus you must select only the best one.
3. The waiting period
The waiting period is the time when you cannot raise a claim against the health insurance plan. It is usually
applicable to pre-existing diseases and maternity benefits.
4. Day care procedures
Nowadays, certain medical treatments are completed within a day. Thus, it is important to ensure if such
treatments are covered under your health insurance plan. These are small medical procedures like cataracts,
tonsillectomy, etc.
5. Alternative treatments
These are non-allopathic treatments like Ayurveda, Yoga, Unani, Siddha and Homeopathy (AYUSH). Many health
plans allow these non-allopathic treatments’ coverage up to a specified limit. AYUSH treatments have gained
importance during the COVID-19 pandemic, and many people prefer these over standard allopathic medicines.

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1.5 Things to consider while buying
6.The availability of add-on covers
Add-ons are optional coverage's available with health plans for increasing the scope of coverage.
7.Pre/post-hospitalization coverage
Pre- and post-hospitalization include any tests, treatment, doctor visits, etc., conducted before or after
the hospitalization.
8.The co-payment clause
As per co-pay clause, the policyholder is bound to pay a predefined percentage amount of the hospital
bill. Such policies cost less but also offer less compensation as you must pay a considerable part of the
hospital bill.
9.The abundance of network hospitals
Consider the company’s claim settlement approach before buying a policy. Check if the insurer has a
wide network of hospitals where you can avail of cashless treatment.

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2 Types of Health Insurance

Extra Care
Plus Policy is
a super
top-up policy
https://www.bajajallianz.com/blog/health-insurance-articles/types-of-health-insurance.html
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2 Types of health insurance
1. Individual Health Insurance
An Individual Health Insurance plan is meant for a single person. The individual who gets himself insured
with this plan is compensated for the expenses incurred for illness and medical expenses.
2. Family Health Insurance
Family Health Insurance Policy secures your entire family under a single cover including your spouse, kids,
and elders.
3. Critical Illness Insurance
The Critical Illness Insurance plan insures the person by offering a lump sum amount of money for
life-threatening diseases. At the time of buying the insurance, the chosen health problems are included, and
if you get affected by any of the pre-selected conditions, you can claim your insurance.
4. Senior Citizen Health Insurance
This policy provides coverage to people who are 65 years and above. The Senior Citizen Health Insurance
will offer you coverage for the cost of hospitalization and medicines, whether it arises from a health issue or
any accident.

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2 Types of health insurance
5. Top Up Health Insurance
An individual can buy the Top Up Health Insurance plan if he seeks coverage for higher amounts. But there is a
“Deductible Clause” added to this policy.
6.Hospital Daily Cash
This plan can help you to protect yourself from unexpected expenses during your hospitalization. Convalescence
benefits are also offered in some of the plans if the individual gets hospitalized for more than seven days. Other
add-ons include Parental accommodation and wellness coach.
7. Personal Accident Insurance
This policy provides a lump sum amount to the victim or his/her family as support. It can be used in case of any
loss or damage to the owner or driver.
8. Mediclaim
The Mediclaim Policy ensures compensation for your hospitalization expenses in case of any illness and accident.
The Mediclaim Policy is available in the market as group mediclaim, individual medical insurance, overseas
medical insurance, etc.
9. Group Health Insurance
This type of health insurance is bought by the employer of the company for its employees. It is offered to the group
of employees to meet the financial crisis and prudence in the company.

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2 Types of health insurance

10. Disease-Specific (M-Care, Corona Kavach , etc.)

Disease-Specific comes under the situation-oriented types of medical insurance policy that provides you
coverage for specific diseases .It is suitable for those who are suffering from pandemic-manifested
conditions or prone to one.
11. ULIPs
ULIPs expands to Unit Linked Insurance Plans. In these plans, a part of your premium is invested, and the
other remaining part is used for buying health covers. Therefore, this plan helps you earn a return besides
providing you a safety net.

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2.1 What is covered by Health Insurance?
•Ambulatory patient services (outpatient care you get without being admitted to a hospital)
•Emergency services
•Hospitalization (like surgery and overnight stays)
•Pregnancy, maternity, and newborn care (both before and after birth)
•Mental health and substance use disorder services, including behavioral health treatment (this includes
counseling and psychotherapy) (2017)
•Prescription drugs
•Rehabilitative and habilitative services and devices (services and devices to help people with injuries,
disabilities, or chronic conditions gain or recover mental and physical skills)
•Laboratory services
•Preventive and wellness services and chronic disease management
•Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential
health benefits)

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2.2 What is not covered ?
• All pre-existing diseases (the pre-existing disease exclusion is uniformly defined by all nonlife and
health insurance companies).
•Under first year policy, any claim during the first 30 days from date of cover, for sickness / disease. This
is not applicable for accidental injury claims.
• During first year of cover – cataract, Benign prostatic hypertrophy, Hysterectomy for Menorrhagia or
Fibromyoma, Hernia, Hydrocele, Congenital Internal diseases, Fistula in anus, piles, sinusitis and related
disorders.
• Circumcision unless for treatment of a disease
• Cost of specs, contact lenses, hearing aids
• Dental treatment / surgery unless requiring hospitalization
• Convalescence, general debility, congenital external defects, V.D., intentional self-injury, use of
intoxicating drugs / alcohol, AIDS, Expenses for Diagnosis, X-ray or lab tests not consistent with the
disease requiring hospitalization.
•Treatment relating to pregnancy or childbirth including cesarean section i) Naturopathy treatment

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3 Health Insurance products
Classification – based on payout
• Indemnity
• Fixed benefit

Classification – based on segment

• Retail
• Group
-Employer-employee
-Other groups

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3.1 Indemnity based products
An indemnity plan is a health insurance plan that reimburses the covered person for incurred medical
expenses.
Indemnity plans may include a deductible that must be satisfied before claims can be paid.
Examples
•Retail Health Insurance
•Group Health Insurance products

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 Fixed Benefit based
3.2
products
Lump sum is paid under the policy on occurrence of covered perils
No deduction/ deductible in claims payment
Examples
•Personal Accident
•Critical illness
•Hospital Cash

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3.2 Factors influencing Health Insurance premiums
Why do you think the premium for your father and your grandfather on the same policy differ?

•Age
•Past medical history
•Occupation
•Policy duration
•BMI index
•Smoking habits
•Geographical location
•Policy type
•Coinsurance feature

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4 Claims
Cashless Claims:
A cashless claim means you (as a patient and policyholder) do not have to pay the hospital bill
(apart from a nominal amount), as your insurance company will settle it with the hospital (as
part of claim settlement), as it is a network hospital.

Reimbursement Claims:
A reimbursement claim means you (as a patient and policyholder) settle the hospital bill on your
own and then submit the health insurance claim application to your insurance company for
applicable reimbursement.

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4.1 Cashless claim settlement procedure
Claims Process for Planned Treatment at the Claims Process for Emergency Treatment at the Cashless
Cashless Network: Network:

•You have to submit the cashless claim form to •You have to notify your insurance company/third-party
your insurer through letter or email at least five administrator within 24 hours of hospitalization. Your
days before the treatment date. Claim Intimation/Reference Number will be generated.

•The insurance company will inform the hospital •The hospital should fill in and submit your cashless claim
after receiving your cashless claim form. form to your insurer.
•You will receive a confirmation letter which will be
•An authorization will be sent to the hospital by the
valid for seven days from the date it was issued.
insurance company on receiving your cashless claim
•Submit the confirmation letter and health card form.
before admission. Your medical expenses will be
paid by the insurance company. •Your medical expenses will be paid by the insurance
company. If your claim is rejected, you will receive a
notification about the same on your email address and
registered mobile number.
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4.2 Reimbursement claim settlement procedure

•Verify the details mentioned on your medical

bill.
•You have to submit the relevant documents
to the insurance company/third-party
administrator after you are discharged.
•The insurance company/third-party
administrator will review your documents.
The time to review your documents and
process the payment can take about 21 days.

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4.3 Documents Required to Claim Health Insurance
•Health card

•Duly filled claim form

•Medical Certificate/ Form which is signed by the treating doctor.

•Discharge summary or card (original), availed from the hospital.

•All bills and receipts (original)

•Prescription and cash memos from pharmacies/ the hospital.

•Investigation report

•If it is an accident case, then the FIR or Medico Legal Certificate (MLC) is
required.

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5 Impact of Covid on health insurance sector in India
Health insurance sector has transformed
positively in a lot of aspects but at the same
time has also faced some challenges, but it
continues to serve its policyholders with
modesty and sincerity.

https://www.insurancedekho.com/health-insur
ance/news/impact-of-covid-19-on-health-insur
ance-sector-in-india-2866

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6 Frauds
Policyholder Fraud and/or Claims Fraud
Fraud against the company in the purchase and/or
execution of an insurance product, including fraud at the
time of making a claim.
Intermediary Fraud
Fraud perpetuated by an insurance agent/Corporate
Agent/intermediary/Third Party Administrators (TPAs)
against the company and/or policyholders.
Internal Fraud
Fraud/ misappropriation against the company by its
Director, Manager and/or any other officer or staff
member (by whatever name called).

https://www.hindustantimes.com/india-news/in-gurug
ram-fake-insurance-claim-unravels-racket-1016252510
72158.html
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7 Role of Actuaries
In the health insurance sector, healthcare actuaries use data and statistics to estimate financial uncertainty and
calculate the cost of health insurance premiums based on reported health data. A healthcare actuary develops and
implements solutions to elaborate financial challenges within the health insurance industry.
The daily responsibilities of healthcare actuaries can be divided into two parts: administrative and communicative
tasks.

1. Administrative
Healthcare actuaries use electronic health records data collected from national databases to analyze and
condense information. They are typically tasked with researching and authoring new proposals for offering
additional services or premiums, such as the possible implications of the addition of chiropractic services or
mental health coverage to a health insurance policy.

2. Communicative
Communicative tasks for healthcare actuaries typically involve consulting with management teams who train
employees on best practices for collecting, calculating, and storing data.

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