1. WHAT IS HEALTH INSURANCE?
The term health insurance is a type of insurance that covers your
medical expenses. A contract between an insurance provider (e.g. an
insurance company or a government) and an individual or his/her
sponsor (e.g. an employer or a community organization).
Popularly known as Medical Insurance or Mediclaim.
Some matter regarding Health Insurance
The contract can be renewable (e.g. annually, monthly) or lifelong in
the case of private insurance, or be mandatory for all citizens in the
case of national plans. .
Sometimes it is associated with covering disability and custodial needs.
The type and amount of health care costs that will be covered by the
health insurance provider are specified in writing, in a member contract
or "Evidence of Coverage" booklet for private insurance, or in a national
health policy for public insurance.

2. THE INDIVIDUAL INSURED PERSON'S
OBLIGATIONS MAY TAKE SEVERAL FORMS:
 Premium:- The amount the policy-holder or his sponsor (e.g. an employer) pays to the
health plan to purchase health coverage.
 Deductable:- The amount that the insured must pay out-of-pocket before the health
insurer pays its share
 Co-payment:- The amount that the insured person must pay out of pocket before the
health insurer pays for a particular visit or service
 Coinsurance:- Instead of, or in addition to, paying a fixed amount up front (a co-
payment), the co-insurance is a percentage of the total cost that insured person may also
pay
 Exclusions:- The insured are generally expected to pay the full cost of non-covered
services out of their own pockets.
 Coverage limits:- Some health insurance policies only pay for health care up to a certain
dollar amount.
 Capitation:- An amount paid by an insurer to a health care provider, for which the provider
agrees to treat all members of the insurer.
 Prior Authorization:- A certification or authorization that an insurer provides prior to
medical service occurring
 Explanation of benefits:- A document that may be sent by an insurer to a patient
explaining what was covered for a medical service, and how payment amount and patient
responsibility amount were determined.

3. BENEFIT TO INSURED
Policy Feature Benefit to Insured
No restriction on Room rent/ ICU Rent You can decide the room you/ family
member would be staying in if
hospitalized and not the Insurance
Company
No per illness limit You will not face any specific monetary
limit while taking treatment for a
particular illness
No Loading on renewal premium You have the assurance of unchanged
premium even after receiving a claim
Reimbursement up to 50% for cost of If your proposal is accepted , Reliance
pre policy health check up General Insurance Company shares
your financial burden equally where you
have to undergo specific tests requested

4. THE BASIS OF PREMIUM IS DECIDED
 Any individual company follow certain broad guidelines and these are as
follows.
Personal History: It takes into consideration the individual’s health, present health
status, past medical history, family history, age of the individual, personal
habits (e.g. smoking, alcohol addiction etc.).
Mortality Rate: These are charges incurred by an insurance company to cover the
risks incase of any eventuality to an individual. The mortality expenses differ
depending on the age and the ‘Sum Assured’ being availed by an individual.
Administration and marketing expenses: Such expenses are incurred by the
organization as part of their operational expenses. These operational
expenses are recovered in the form of premium that a policyholder pays while
purchasing an insurance product.
Savings component: This portion of the premium is invested in various public
investments approved by the Government of that country. Investments in
private sectors are generally not practiced. This is based on the guidelines
issued by the Regulatory Body which is approved by the government of that
country.
Medical Underwriting: Underwriting of various insurance products is done to
create a balance between an organization and an individual. This is done with
a view to analyze risks from various angles and broad-spectrum factors
so as to contain fiscal bleeding and containment of losses in the insurance
sector.

5. WHAT PREMIUMS COVER
Name of the Company Amount paid
AD choices Cashless Claim Approval In 4 Hours. No Medicals up to 50
yrs.
TATA AIG Med premium 4 Lakh cover for just Rs 23 a day Single premium covers a
family of 3
Medical insurance Comprehensive Insurance Covering both Structure&
policy Belongings for 5 yrs

6. HOW RATES ARE CALCULATED
 People with health problems or who engage in unhealthy
activities and those in dangerous fields of work often pay
significantly more for insurance than healthy individuals with safe
jobs. For example, non-smokers statistically live healthier lives
than smokers, and construction workers may have more serious
on-the-job accidents than accountants. Therefore, a construction
foreperson who smokes will typically pay much more in premiums
than a non-smoking CPA.
 People should keep in mind that the lowest quoted price on a
premium may be the better bargain, but the insurance policy may
not provide much coverage.

7. WHAT CAUSES RATES TO CHANGE
 Insurance companies can raise premium rates for any number of
reasons, but one of the most common is a high number of claims
on the policy. An insurer typically bases its prices on how much it
will end up paying over the life of the policy; ideally, it tries to pay
out less than what the policyholder pays in. When a person
regularly files claims against the insurance policy, the company
has to pay out more, limiting its profit margin. As a result, it will
often raise premiums to recover this cost.
 In this same line, an insurer may raise rates if it expects an
increase in claims. For example, if an otherwise healthy individual
sustains permanent injuries in a car accident, her health
insurance company may increase her premiums because it
expects her healthcare costs to go up. Rates may also rise
generally due to a price hike in services, to pay for claims from
other policy holders, or to keep up with inflation..

8. PAYMENTS AND MISSED PREMIUMS
 An insurance premium is usually collected in monthly, semi-
yearly, or yearly payments, depending on the type of policy.
Policyholders also often have the option of combining their
payments with fees for other services, or taking out several types
of policies with one company to lower the overall costs. For
example, buying both car and renter's insurance from the same
insurance company may give the buyer a discount on both.
 If the policyholder fails to make a scheduled payment, the
company can choose to cancel the plan entirely. This is often
referred to as a "lapsed policy," and the customer will typically be
required to either pay the balance of the insurance premium and
be reinstated or the policy will be voided.
 In almost all cases, a person cannot make a claim against a
policy that is not current in premium payments.

9. TAX BENEFITS UNDER SECTION 80D, 80DD AND
80DDB
 Benefits U/S 80 D:-Available Deduction - For individuals less than
65 years of age, amount of health insurance premium paid or Rs.
15,000, whichever is lesser. For senior citizens above 65
years, amount of health insurance premium paid or Rs.
20,000, whichever is lesser.
 Benefits U/S 80 DD:- Available Deduction - Rs 50000, or actual
expenditure incurred, whichever is lesser. For severe handicap
conditions Rs. 1,00,000 is the deduction limit.
 Benefits U/S 80 DDB:- Available Deduction - For individual
assesses less than 65 years of age, a deduction limit of Rs.
40,000 is applicable. For a senior citizen, the limit is Rs. 60,000.

10. TYPES OF HEALTH INSURANCE
 Family Floater Health Insurance Plans:- A single policy that secures the
hospitalisation expenses of your entire family excluding dependent Parents.
The floater health plan covers your entire family under one policy with one
sum insured and one premium.
 Extended Family Floater Plan (Option to Include Dependent Parents or
in-laws):- A single health insurance policy that secures the hospitalization
expenses of your extended family (up to 6 dependents) including dependent
Parents or you can opt for in-laws. The floater health plan covers your entire
family under one policy with one sum insured and one premium.
 Top up Health Insurance Policy:- Policy that covers the medical expenses
beyond the threshold level/deductible you have chosen. This is a good
choice if you want to add additional cover up to Rs. 15 lakhs to you existing
Insurance Policy with very less premium or If you are yet to opt for medical
insurance, you can buy top-up policy to take medical insurance cover
beyond a threshold limit that you can afford.
 Health Insurance Policy including OPD Expense Coverage Health Plus
policy not only covers the expenses arising due to life threatening/Major
Medical Illnesses and Procedures, but also for OPD (Out Patient
Department) expenses like reimbursement of cost of
medicines, drugs, ambulance charges and dental expenses.

11. NGO’S AND HEALTH INSURANCE
SCHEMES IN INDIA
 So many non-profit Non-Governmental Organizations (NGOs) operate in
India to provide preventive and curative health care services to the people.
A small number of those NGOs also offer pre-payment health insurance
schemes . Such non-profit community based insurers may offer the best
hope of providing high quality, affordable and sustainable health care to the
poor. This paper explores the factors associated with the long-term success
of such schemes .Therefore , it is hoped, by identifying the factors, other
NGOs can initiate risk sharing schemes amongst their target population.
 The need for involving NGOs in health insurance schemes in India
arisesdue to the following four factors:
 Firstly, In India, private expenditure accounts for roughly two-thirds of total
health care spending.
 Secondly, the quality of health care services available to the people in India
are of poor standards.
 Finally, government’s combined expenditures, at the national, State and
municipal levels accounted for only one-fifths of all health care spending in
India.

12. EXPERIENCES IN DEVELOPING COUNTRIES
 NGOs were playing an important role in health care provision in
countries such as Zimbabwe, Tanzania, Uganda, Nepal, Mexico, Malawi
and Ghana 6.
 Donald S. Shepard et al7 evaluated the design, management and
operational efficiency of four health insurance schemes for informal
sector in both rural and urban areas of Zaire region in sub-Saharan
Africa.
 The study findings revealed that the insurance scheme has helped the
people to have access to health care services in rural and urban areas.
The authors, however, did not support the rapid implementation of a
nation-wide conventional health insurance system as a feasible solution
but suggested decentralized , locally managed plans for success.
Further, the study also suggested to initiate different types of insurance
schemes for out patient and inpatient care.
 The schemes include health facility schemes generally initiated by
hospitals, community schemes, cooperative schemes and the schemes
run by the NGOs.The authors identified many problems in the existing

13. THE NEED TO SPREAD HEALTH INSURANCE
AWARENESS
 The condition of health insurance in India is pathetic. 85% of Indian
population does not use health insurance to finance their medical
expenditure. These people pay for their medical expenditure from their
pocket. As a result, many of these uninsured individuals either end up
with poor quality healthcare or have to bear financial hardships. The
financial stress that is engendered due to rising medical expenses is
believed to affect the lifestyle of all family members for years.
 There is a need to increase the number of insured individuals in India.
Working in this direction, every individual, every medical care provider
and every health insurance company should play an active role. It is only
then possible that people would be able to avail quality healthcare in
times of medical emergency. Insurers have designed plans, but people
should be encouraged to buy them so that the overall condition of
medical care insurance in the country can be improved.
