Professional Documents
Culture Documents
CHAPTER I
INSURANCE: AN INTRODUCTION
Insurance may be described as a social device to reduce or eliminate risks of loss to life and
properly. It is a provision which a prudent man makes against inevitable contingencies, loss
or misfortune. Once Frank H. Knight said "Risk is uncertainty and uncertainty is one of the
fundamental facts of life." Insurance is the modern method by which men make the
uncertain certain and the unequal; equal. It is the means by which success is almost
guaranteed. Through its operation- the strong contribute to the support of the weak and
weak secure, not by favor sent by right duly purchased and paid for, the support of the
strong (Calvin Coolidge.) Under the plan of insurance, a large number of people associate
themselves by sharing risks attached to individuals. As in private life, in business also there
are dangers and risks of different kinds. The aim of all types of insurance is to make
provision against such dangers. The risks which can be insured against include fire, the
perils of sea (marine insurance), death (life insurance) and, accidents and burglary. Any risk
contingent upon these, may be insured against at a premium a commensurate with the risk
involved. Thus, collective bearing of risks is insurance.
Definition
Insurance in its basic form is defined as A contract between two parties whereby one party
called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party
called insured a fixed amount of money on the happening of a certain event." In simple terms
it is a contract between the person who buys Insurance and an Insurance company who sold
the Policy. By entering into contract the Insurance Company agrees to pay the Policy holder
or his family members a predetermined sum of money in case of any unfortunate event for a
predetermined fixed sum payable which is in normal term called Insurance Premiums.
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TYPES OF INSURANCE
Life insurance
Life insurance is an insurance coverage that pays out a certain amount of money to the
insured pr their specified beneficiaries upon a certain event such as death of the individual
who is insured. This protection is also offered in a family tactful plan, a Shariah based
approach to protecting you and your family.
The coverage period for a life insurance is usually more than a year. So this requires a
periodic premium payment, either monthly, quarterly or annually.
The risks that are covered by life insurance are:
Premature death
Income during retirement
Illness
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The guiding principle enunciated in the Bhore committee of 1946, which states that `no
individual should fall to secure adequate medical care because of inability to pay for it', looks
unreachable even after 50 years of Indian Independence. Some form of Mediclaim insurance,
either social or private, covers hardly 3% of the Indian population. The total expenditure on
Mediclaim in India is 6% of the GDP and the government spending is less than 25% against
the average spending of 30-40% in other developing countries. In India, Mediclaim
insurance mainly exists in the form of Mediclaim policy offered to the individuals or
group, association or corporate bodies. State owned insurance companies; covering
only about 2.5 mn people of the country's population, do the penetration of Mediclaim
policy. Social insurance like Employee State Insurance Scheme is available but they
have restricted the coverage to a very small segment of the population that is round 3%.
The government has taken serious interest in the potential of insurance companies to
provide and popularize Mediclaim insurance coverage at modest rate of premium. To
achieve this goal the government has allowed income tax rebates for premium paid for
Mediclaim insurance policies. GIC made some headway under its various Mediclaim
care plans for different segments of policyholders, by covering more than 2 mn people.
LIC and UTI also made attempt to offer some type of Mediclaim insurance covers.
However, Mediclaim insurance could not pick momentum in India due to the following
reasons:
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We shall now discuss in detail about the Mediclaim insurance policies available in
India.
DECADES OF MEDICLAIM
The concept of Mediclaim insurance was proposed in 1694 by Hugh the Elder Chamberlin
from the Peter Chamberlin family. In the late 19th century, "accident insurance" began to be
available, which operated much like modern disability insurance. This payment model
continued until the start of the 20th century in some jurisdictions (like California), where all
laws regulating Mediclaim insurance actually referred to disability insurance. Before the
development of medical expense insurance, patients were expected to pay all other
Mediclaim care costs out of their own pockets, under what is known as the fee-for-service
business model. During the middle to late 20th century, traditional disability insurance
evolved into modern Mediclaim insurance programs. Today, most comprehensive private
Mediclaim insurance programs cover the cost of routine, preventive, and emergency
Mediclaim care procedures, and also most prescription drugs, but this was not always the
case. Hospital and medical expense policies were introduced during the first half of the 20th
century. During the 1920s, individual hospitals began offering services to individuals on a
pre-paid basis, eventually leading to the development of Blue Cross organizations. The
predecessors of today's Mediclaim Maintenance Organizations (HMOs) originated beginning
in 1929, through the 1930s and on during World War II.
MEDICLAIM IN INDIA
In mid 80s most of the hospitals in India were governments owned and treatment was free of
cost. With the advent of Private Medical Care the need for Mediclaim Insurance was felt and
various Insurance Companies (New India Assurance, National Insurance Company, Oriental
Insurance & United Insurance Company) introduced Mediclaim Insurance as a product.
According to recent news report Mediclaim insurance continues to be the fastest growing
segment with annual growth rate of 55%. Mediclaim Premium has risen to Rs. 3300 crores in
2006-2007. As per the recent reports from various agencies the Mediclaim sector has the
potential to become a Rs. 25000-crore industry by 2010. On August 15, 2007 Prime Minister
has announced Rs 2000 Crores for Mediclaim Insurance for poor citizens. We foresee that
this amount will be partly in form of subsidy therefore during calendar year 2008 we can
expect Mediclaim Insurance premium to touch figure in the range of Rs 10,000 Crores.
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You are expected to live longer than your parents or grandparents. An average Indian used to
live for barely 40 years at the time of Independence. By 2016, an average Indian would live
for about 68 or 70 years.
Life can come at you fast. It's simply impossible to know what's around the corner. This is
why we all have to take necessary precautions. In other words; do you have Mediclaim
insurance? Some people actually have no medical insurance whatsoever. This is completely
absurd in the unpredictable world we live in. That random fall or dreadful car accident could
happen today. Are you prepared to grapple with those hospital bills? The fact is, medical
insurance is just an inevitability of life. You always want to have it just in case. If the time
does arise when you need it, you will thank God you planned ahead.
However, a longer life need not mean Mediclaimier life. Lifestyle-related diseases such as
high blood pressure, diabetes, obesity, and extraordinary stress are all on the rise. In short, we
are looking at a combination of longer but possibly a less Mediclaimy life span. At the same
time, Mediclaimcare costs have been escalating rapidly.
Landing up in hospital is the last thing we want to think about. It happens to someone else not
meyou think. But we all go through tough times and only the ones that plan ahead come
out unscathed. The massive cost of treatment is a double-whammy for many who already
have to contend with the illness. If you become seriously ill, your entire wealth accumulated
over decades can disappear in combating the illness. If your savings can vanish in the blink of
the eye what is the best solution? The answer to this ominous question is opting for
Mediclaim insurance.
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A contract of insurance contained in a fire, marine, burglary or any other policy (except life
assurance and personal accident and sickness insurance) is a contract of indemnity. This
means that the insured, in case of loss against which the policy has been issued, shall be paid
the actual amount of loss not exceeding the amount of the policy, i.e. he shall be fully
indemnified. The object of every contract of insurance is to place the insured in the same
financial position, as nearly as possible, after the loss, as if he loss had not taken place at all.
It would be against public policy to allow an insured to make a profit out of his loss or
damage.
Since insurance shifts risk from one party to another, it is essential that there must be utmost
good faith and mutual confidence between the insured and the insurer. In a contract of
insurance the insured knows More about the subject matter of the contract than the insurer.
Consequently, he is duty bound to disclose accurately all material facts and nothing should be
withheld or concealed. Any fact is material, which goes to the root of the contract of
insurance and has a bearing on the risk involved. It is only when the insurer knows the whole
truth that he is in a position to judge
If that were so, the insured might be tempted to bring about the event insured against in order
to get money.
Insurable Interest
A contract of insurance affected without insurable interest is void. It means that the insured
must have an actual pecuniary interest and not a mere anxiety or sentimental interest in the
subject matter of the insurance. The insured must be so situated with regard to the thing
insured that he would have benefit by its existence and loss from its destruction. The owner
of a ship run a risk of losing his ship, the charterer of the ship runs a risk of losing his freight
and the owner of the cargo incurs the risk of losing his goods and profit. So, all these persons
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have something at stake and all of them have insurable interest. It is the existence of insurable
interest in a contract of insurance, which distinguishes it from a mere watering agreement.
Causa Proxima
The rule of causa proxima means that the cause of the loss must be proximate or immediate
and not remote. If the proximate cause of the loss is a peril insured against, the insured can
recover. When a loss has been brought about by two or more causes, the question arises as to
which is the causa proxima, although the result could not have happened without the remote
cause. But if the loss is brought about by any cause attributable to the misconduct of the
insured, the insurer is not liable.
Risk
In a contract of insurance the insurer undertakes to protect the insured from a specified loss
and the insurer receive a premium for running the risk of such loss. Thus, risk must attach to
a policy.
Mitigation of Loss
In the event of some mishap to the insured property, the insured must take all necessary steps
to mitigate or minimize the loss, just as any prudent person would do in those circumstances.
If he does not do so, the insurer can avoid the payment of loss attributable to his negligence.
But it must be remembered that though the insured is bound to do his best for his insurer, he
is, not bound to do so at the risk of his life.
Subrogation
The doctrine of subrogation is a corollary to the principle of indemnity and applies only to
fire and marine insurance. According to it, when an insured has received full indemnity in
respect of his loss, all rights and remedies which he has against third person will pass on to
the insurer and will be exercised for his benefit until he (the insurer) recoups the amount he
has paid under the policy. It must be clarified here that the insurer's right of subrogation
arises only when he has paid for the loss for which he is liable under the policy and this right
extend only to the rights and remedies available to the insured in respect of the thing to which
the contract of insurance relates.
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Contribution
Where there are two or more insurance on one risk, the principle of contribution comes into
play. The aim of contribution is to distribute the actual amount of loss among the different
insurers who are liable for the same risk under different policies in respect of the same
subject matter. Any one insurer may pay to the insured the full amount of the loss covered by
the policy and then become entitled to contribution from his co-insurers in proportion to the
amount which each has undertaken to pay in case of loss of the same subject-matter.
(I) There are different policies which relate to the same subject-matter
(II) The policies cover the same peril which caused the loss, and
(III) All the policies are in force at the time of the loss, and
(IV) One of the insurers has paid to the insured more than his share of the loss.
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Types of policies:
The following types of policies are issued by the insurance corporation in order to meet
the public at large:
Conditions: Any event giving rise to claim under the policy should be informed or
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communicated to the insurance company in writing within 7 days from the date of injury,
hospitalization/ domiciliary hospitalization.
Claim must be filed within 30 days from the date of discharge from the hospital.
The company will not be liable for any payment for claim, which are fraudulent or
supported by any fraudulent device.
Standard cover.
Eligibility: the policy is available to the following person: Indian residents traveling abroad
for the following purposes:
Business
Official
Holiday tour
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Accompanying spouse and children of the person going aboard will be treated as going
under holiday travel.
Age limit:
Adults: the age limit is 70 years. Adults between the age of 70 and 80 years can be covered at
the discretion of the insurer by loading the premium and persons above 80, years can also be
covered provided the insurance company's head office accepts the proposal.
Benefits:
V. Cancer policy: this policy is designed to meet the risks or coverage for the members
of the cancer patient aid association. There are two scheme available for cancer policy:
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This policy is introduced in collaboration with Indian Cancer Society can avail of the
benefits of this scheme. The policy lapses immediately if the insured ceases to be a
member of the Cancer society for any reason whatsoever. On payment of the prescribed
membership fees, which is included in insurance premium during the currency of the
policy suffers from cancer; the policy will pay up to Rs. 50, 000 to meet the cost of
diagnosis, biopsy, chemotherapy, hospitalization and rehabilitation.
VI. Bhavishya Arogya Policy: This scheme had been designed so as to enable a
person to provide himself for medical needs during an old age security. Under this policy the
medical expenses to be incurred over the balance life span after a predetermined age of
retirement will be reimbursed up to the amount of the sum insured with a limit of an
amount per any one illness or injury. The amount of maximum total benefits available
under the basic policy is Rs. 50, 000 during the lifetime of the insured commencing
from the policy retirement age and is not to exceed Rs. 20, 000.
VII. Videsh Yatra Mitra Policy: Videsh yatra policy is another overseas mediclaim
scheme introduced by general Insurance Corporation with effect from 1998. This policy
provides the widest cover of personal accident, loss of checked baggage, loss of passport,
medical expenses and repatriation, delay of checked baggage, personal liability etc. insured
person is that person named in the overseas policy schedule, for which the appropriate
premium had been paid. The policy is valued only from the first day of insurance and expires
on the last day of the number of days specified in the policy schedule or on return to India
whichever is earlier.
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Major medical insurance is designed to pay a high proportion of the covered expenses
of a catastrophic illness or injury. This type of plans is often sold in conjunction with a
hospitalization and surgical plan, and is aimed at covering costs that a normal
hospitalization plan does not cover. Most such plans include the following characteristics:
1. Extensive coverage:
Usually the major medical insurance coverage is wide and includes all the reasonable and
essential medical expenses and other related expenses from a covered illness or injury.
4. Deductible:
Deductible are the stated amounts each claim has to satisfy before any payments of the
benefits are made. The purpose od deductibles is to eliminate small claims that a pose a
relatively high processing cost to insures. This will help insurers keep the premiums for
major medical plans reasonable.
5. Co-Insurance:
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A co-insurance is a policy provision that requires the insured to pay a certain percentage of
the eligible medical expenses in excess of the deductible. The purpose of this clause is to
reduce premium and prevent over utilization of policy benefits. Since the insured has to pay
part of the bill, premiums can be offered at cheaper rates. Another purpose of the provision
is to discourage the patients from simply choosing the most costly medical services while
lower-cost versions are available and are just as good.
6. Exclusions:
Like all types of insurance policies, major medical plans contain exclusion clauses. Some of
the common exclusions that are found in such plans are as follows:
Pregnancy and childbirth, except for complication that arises as a result of childbirth.
Experimental surgery
To further control cost, internal limits are sometimes imposed on the plan. There may be in
the form of annual or lifetime limits on the amount paid for certain diseases.
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The policy covers hospitalization expenses for the treatment of illness/injury provided
hospitalizations is more than 24 hours. Pre-hospitalization expenses for 30 days and post
hospitalization expenses for 60 days are also payable.
Day-care treatment - The Medical expense towards specific technologically advanced day-
care treatments / surgeries where 24 hour hospitalization is not required.
Ambulance Charges for shifting the insured from residence to hospital are covered up to the
limits specified in the policy.
Ayurvedic / Homeopathic and Unani system of medicine are covered to the extent of 25% of
Sum Insured provided the treatment is taken in the Government Hospital.
Pre-existing diseases are covered only after 4 continuous and claim free renewals with our
Company.
Pre-existing conditions like Hypertension, Diabetes, and their complications are covered after
two years of continuous insurance on payment of additional premium.
Exclusions:
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Premium:
Premium is based on age of the proposer and geographical area of treatment.
Special features of the policy:
National Insurance
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Salient Feature
2. Scope of Cover
Medicaid insurance policy has been devised under the aegis of the Government of India.
The policy provides the following benefits.
b) Nursing expenses.
c) Fees of surgeon, anesthetist, medical practitioner, consultant and specialist.
d) Expenses on account of anesthesia, blood, oxygen, operation theatre charges, surgical
Appliances, medicines and drugs, diagnostic material, X-ray, dialysis, chemotherapy,
Radiotherapy cost of pacemaker, artificial limbs and cost of organs and similar expenses.
2) Introduction of Sub-Limits:
The following provisions have been introduced:
A. Room, Board and Nursing Expenses as provided by the Hospital /Nursing Home- Room
Rent limit: 1 % of the Sum Insured per day subject to maximum of Rs.5000./-. I.C. Unit
Expenses: 2 % of Sum Insured per day subject to maximum of Rs. 10,000/-. Over all limits
under this head: 25% of S.I. per illness.
B. Surgeon, Anesthetist, Medical Practitioner, Consultants Special fees maximum limits per
Illness 25% of S.I.
C.Anesthesia, Blood, Oxygen, OT charges, Surgical appliance, Medicines, drugs, Diagnostic
Material & X-Ray, Dialysis, Chemotherapy, Radiotherapy, cost of pacemaker, artificial limbs
And cost of stint and implant. Maximum limit per illness 50% of Sum Insured.
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3) Premium paid for the policy towards self, spouse, dependent children and dependent
parents are exempt from Income Tax under Sec. 80D of the l.T. Act.
4) Cost of Mediclaim Check Up and Cumulative Bonus - Benefits will accrue only if the
Policy is a renewal Of National.
3. Additional Features
1) Definition of Family:
A) Self (Primary Insured).
B) Spouse.
C) Dependent Children (i.e. legitimate or legally adopted children). Children above 18 years,
if employed, can not be covered. Male children, if not employed, but a bonafide student can
be covered up to age of 25 years. Female children, if not employed, can be covered until the
time she is married.
D) Dependent parents.
All members of the family must be covered under one policy.
2) Entry Age:
This insurance is available to a person between the age of 18 to 59 years. However, the
Policy can be renewed upto the age of 80 years as stipulated in the premium chart above.
a) Children above the age of 3 months can be covered provided parents are covered
concurrently and suitable premium is paid. If the child above 18 years is employed or if the
Girl child is married, he or she shall cease to be covered under the policy. However male
child can be covered up to the age of 25 years if he is a bonafide regular student and fully
dependent on primary insured. Female child can be covered up to the time, she is unmarried.
b) If the insured has taken continuous Mediclaim insurance policy with us for at least 5 years
prior to attaining the age of 80 years the policy can be renewed beyond the age of 80 up to
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the age of 90 years as a special case with the approval of Regional In charge on case to case
basis. The premium chargeable shall be 10% of the premium for 75-80 years age slabs for
proposers above 85 and 20% of the premium for 75-80 age slabs for proposers above 90.
c) No inclusion of family member during currency of policy is permissible except for a new
born child between the age of 3 months to 6 months and newly married spouse within 60
days of marriage. Otherwise inclusion of family member shall be allowed only at the time of
Renewal. Prorata premium shall be charged for such inclusion during the currency of the
policy for the unexpired period.
3) Sum Insured:
Minimum sum insured shall be Rs 50,000/- and can be increased in multiples of Rs 25,000/-
upto Rs 5 lacs. The sum insured must be identical for primary insured and the dependents.
However, the children may be covered for 50% Sum Insured as per item no. 2 above.
4) TPA option:
The premium includes cashless facility through TPA. If the policyholder does not require
cashless facility then 6% discount on premium may be given.
5) Pre -Acceptance Mediclaim Checkup:
Pre acceptance Mediclaim check-up is mandatory when age is 50 years and above and he/she
is seeking insurance cover for the first time as an individual or as member of a family where
there is break in Insurance increase in sum insured on renewal. Propose/Insured Person will
be required to undergo the following Medical Check-up or any other medical test as required
by the Company either on his/her own or from its authorized Network Diagnostic Centre in
prescribed format. The cost shall be borne by the insured.
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If the insured was covered under any Mediclaim Insurance Policy of National
uninterruptedly for Preceding 3 years, no pre-acceptance Medical check up is required.
4. Exclusions
The most important exclusion relates to pre-existing illness. If the insuring person had a
Mediclaim condition, existing prior to taking the policy, which required medical treatment,
the same gets automatically excluded in the policy. To ensure that in subsequent renewals
medical conditions
Incepting since the policy was taken do not get excluded, the insuring person must renew the
policy without break. The other exclusions for illustrative purposes are:-
EXCLUSION 4.a, 4.b & 4.c have been amended. Pre-existing diseases shall be covered
after 4 continuous claims free Policy years with National. However, in case of exclusion
4.3, for renewals, Existing condition shall apply, i.e. the one year exclusion applicable earlier
shall be valid.
Benefits of mediclaim
Benefits of a Mediclaim policy are many. Some of which are listed below.
First and foremost the Mediclaim policy offers you a chance to get your medical expenses
covered under a policy. Thus it takes care of the hospitalization fees. Protects the person or
family (in case of family plan) for hospitalization expenses as a result of any specific injury
or illness which has taken place during the period of insurance and on the advice of a doctor
requires hospitalization.
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Pre hospitalization expenses for the person or the insurer and also to go with it Post-
Hospitalization Expenses: Post Hospitalization expenses are medical expenses incurred
during a period up to a specific number of days after hospitalization for the particular ailment
disease or injury is over but still needs expenditures in order to completely become normal. If
you have a Mediclaim insurance policy that supports cashless Mediclaim, it means that you
can get medical treatment just by displaying your insurance card without paying any cash to
the hospital. Most Mediclaim insurance companies offer this benefit. Some times the benefits
may be applicable only to a certain number of hospitals or medical centers. Some of the
insurance policies also provide tax benefits. These tax benefits are provided to the person
under the name of whom the insurance policy has been assigned. Under the Section 80D, tax
benefits are provided to people who get a Mediclaim policy done in their n
New Delhi: With assembly elections in six states and general elections just months away, the
government is planning to expand the scope of its Mediclaim insurance schemes for the poor.
At a marginal premium, families above poverty line (ALP) could also get the benefit of
insurance cover if the proposal goes through. The Mediclaim ministry is planning to modify
the scope of its yet-to take-off Rs 8,000-crore National Urban Mediclaim Mission (NUHM)
for the urban poor to cover services like outpatient care, which are not covered by the
Rashtriya Swasthya Bima Yojana (RSBY). Mediclaim secretary Naresh Dayal told ET that
his ministry was exploring the option of modifying the proposed insurance scheme under
NUHM so that the urban poor can get additional benefits. The government is also examining
the possibility of raising the cover from Rs 30,000 initially proposed. These suggestions came
up at a meeting of senior government officials last week. APL families are not covered under
RSBY. NUHM was announced in March this year by Mediclaim minister Anbumani
Ramadoss and was to be launched in four months. However, in April, the labour ministry
operationalised RSBYannounced last year for workers in the unorganized sector. Now,
the Mediclaim ministry, which was all set to kick start NUHM on the lines of the National
Rural Mediclaim Mission, is thinking of re-designing the insurance component of this
ambitious programmed. We are looking at a variety of options. We may either launch the
programmed with better reach and coverage or will modify it and cover those areas that have
been left out by the labor ministry. Once things get finalized, we will take it to the Cabinet for
approval. All this may take 3-4 months, Mr Dayal told ET.
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General Insurance Corporation through its four subsidiaries: Oriental Insurance, New India
Assurance, National Insurance Company, United India Insurance.
Age:
Between 5 - 80 years.
Children between 3 months and 5 years can be covered provided one or both parents are also
covered.
Coverage:
Insures against any hospitalization expenses that may arise in future. The scheme reimburses
hospitalization expenses for illness, diseases or injury sustained, excludes any disease
existing before taking the policy.
Cost:
Sum insured can be anywhere between Rs 15,000 - Rs 500,000. Rate of premium ranges
between Rs 175 per year to Rs 2,500 per year depending on the age and capital sum insured.
Amount:
Compensation up to the extent of sum insured.
DOCUMENTS REQUIRED
Given below is a general list of documents that are required in case of a claim.
2. Original bills, receipts and discharge certificate / card from the hospital.
4. Investigation test reports and payment receipts, supported by the note from attending
medical practitioner / surgeon prescribing the test.
We would like to observe that keeping in view the role played by the insurance companies,
it is essential that the regulatory authority must lay down clear guidelines by way of
regulations or otherwise. No doubt, the regulations would be applicable to all the players in
the field... the court said. The duties and functions of the regulatory authority, however, are
to see that the service provider must render their services keeping in view the nature thereof.
It will be appropriate if the central government or the general insurance companies also issue
requisite circulars, the court said.
It further said, We would request the IRDA to consider the matter in depth and undertake a
scrutiny of such claims so that in the event it is found that the insurance companies are taking
recourse to arbitrary methodologies in the matter of entering into contracts of insurance or
renewal thereof, appropriate steps on that behalf may be taken.
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There are a host of benefits for having a claim-free policy, the most important being
additional cover at the same premium, but the whole purpose of Mediclaim insurance is to
provide for your medical expenses. However, you must make your claims prudently. So, you
should not make small claims. To choose which claims are worth making, get the numbers
right! Check if by making a claim, the no-claim bonus you forfeit and the 10 per cent of
cumulative bonus cover you lose will exceed the compensation you get. If it does, it makes
sense not to make a claim but pay for the expenses you? Claim only if the amount is on the
higher side and you it makes sense to forfeit the no claim bonus. Also keep in mind that in the
long term, it will reflect on your records and will the insurer will penalize you with an extra
load on your premiums.
1. Select a hospital from your service provider's network hospital tie-ups. Check the Network
Hospitals booklet mailed to you or visits your service provider's website. However, do note
that the hospital booklet might not be updated. Your provider may include or exclude
hospitals without giving prior information. It is advisable to check the updated list from the
website or contact them directly for information.
2. Produce your cashless card in the chosen hospital prior hospitalization.
3. Fill in the Pre-authorization form with the insurance details. The hospital shall fill in
information regarding the diagnosis, treatment plan, past history and the expected of the cost
of treatment. The pre-authorization form can be availed at the hospital or downloaded from
the service provider's website.
4. The hospital shall then fax the signed and stamped form to the service provider.
5. The service provider then evaluates the documents and classifies the case as Approved,
Queried or Rejected. Accordingly, the Authorization form would be faxed to the hospital.
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6. It is advisable to follow the above procedure and get the Authorization Letter before getting
admitted to avoid any disappointments. However, in case of an Emergency Hospitalization,
the authorization form can be obtained after admission.
7. Note that the Cashless Authorization does not cover: Attendant/Visitor pass charges
Emergency treatment is not covered. Once your condition has been stabilized and if your
consultant agrees, you can be transferred (with our prior approval) to private facilities or
become a private patient within the NHS
All claims made in the first year of the policy will be referred to our Chief Medical Officer
If a claim can be paid under another insurance policy or by anyone else, we will only pay
the proper share.
The main reasons for claim not being passed in full are
Insured has preexisting disease and it was already mentioned in policy document as
exclusion.
Disease is a preexisting disease and it was not revealed by the insured at the time of
issue of policy.
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Some of the tests conducted/treatment were not relevant to the disease for which
patient was admitted.
Some costs like consumables are not payable by the insurance company. Examples
are :-
With a view to cover some of these payments some TPA's insist that 5% of the hospital bill
will be paid by the patient. You should not be surprised if you are asked to pay 5% of the bill
even if you are covered under cashless scheme. In the event of consumables are not 5% or
more than 5% there is good possibility that you may get part of this paid to you at time of
finalization of their claim.
As a customer you should see that information being given at time of admission into
the hospital, discharge certificate, claim form is consistent. Any follow up letter being
sent to the insurance company should be well drafted and consistent to the claim
lodged.
I heard a story recently from an acquaintance of mine who has no medical insurance. She
never expected to use such a thing. Sure, maybe dental on occasion, but never medical. I
mean come on, the girl's only 23 years old. What could happen? Well, this is what happened.
She manages a truck stop, and while conversing with an employee one night, a brute strolls in
with a nasty temper. Before she knew it, the employee she was conversing with is being
attacked by the brute. Now, when she decided to intervene and be the hero, she was stabbed
in the shoulder. Wow, what a reality check. You try and do the right thing, and life smacks
you in the face. Now comes the problem with having no medical insurance. After being
hospitalized for a couple weeks, her medical bills are now around 30 grand. However, this is
not the end of it. She still has to go through physical therapy; not to mention the mental
anguish of almost dying. How much will the psychiatrist charge? The point is, you simply
can't know what's in store for you. Life is so random for us all. I wanted to use this girl's
recent story as an example because it's true. Sure it's sad, but still reality.
These days, no medical insurance equals trouble down the road. Even a minor hospitalization
can set you back for a long while. The problem is that most of us don't believe that we will
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ever use it. Get rid of your fantasies and purchase a decent medical insurance plan today.
Don't end up in the emergency room with no medical insurance. If nothing else, insurance
offers you piece of mind. Although I have not used my medical insurance yet, I understand I
may need it in the future. I choose to be prepared for what lies ahead.
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Judicial reforms that clearly link compensation along with avoidable errors.
State and local support for further uniformity in model regulations and rules.
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Hyderabad: Senior citizens have good chances of getting a Mediclaim cover even after they
turn 65. Insurance regulator IRDA is vetting a proposal to make Mediclaim cover affordable
to all senior citizens. A final view will be taken on providing guaranteed access to Mediclaim
insurance for this segment by the end of this year, said a top official of the regulatory body.
The proposal is based on the recommendations of an expert panel on Mediclaim insurance
last year. The panel recommended allowing senior citizens to enter the Mediclaim insurance
system up to 65 years of age or higher at the discretion of the insurer.
If they do so, they should be given guaranteed renewal of their insurance without any upper
age limit. As a transitional measure since guaranteed access is being provided to senior
citizens for the first time there should be no upper age limit for entry or renewal for a
period of three years from the date the IRDA issues the regulations, the panel had said. It
had made out a case for insurers to fix a base price of Rs 3,000 every year for a sum
insured of Rs 1,00,000 (at 50 years). We are examining these recommendations of the panel
we reckon that Mediclaim insurance should be made affordable, given the mounting
Mediclaim care-costs, said DVS Sastry, director general, IRDA at a seminar on effective
cross selling of insurance and mutual fund products organized by Watson Wyatt and the
Indian Institute of Banking and Finance here. Several senior citizens have registered
complaints with the regulator about insurance companies denying renewals. Industry experts,
however, reckon that people should enter Mediclaim insurance schemes at an early age to
enable insurance companies distribute their risks better. Currently, Mediclaim insurance
penetration is minuscule in India. The total premium from Mediclaim insurance stood at Rs
4,970 crore in FY 08, marking a 55% growth over FY07. Currently, there are only two
standalone Mediclaim insurance companies Star Mediclaim and Allied Insurance and
Apollo DKV offering pure Mediclaim products. The government is looking at raising the
cap on foreign direct investment (FDI) in insurance from 26% to 49%. It is also considering a
minimum capital requirement of Rs 50 crore for Mediclaim insurance companies to make it
attractive for new-entrants. Consumers are expected to get a better deal in terms of pricing
when competition intensifies among these players.
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Deduction U/s 80D for mediclaim premium available to individual HUF and senior
citizen
1. Premium based on Age: - As in term insurance, the premium rates will vary among the
insurers and will also depend on your age. The older you are, the heftier the premium. For
instance, Mediclaim policy from General Insurance Corporation has a fixed premium till 35
years and then it changes in 10-year slabs.
Note
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3. Entry Age: This insurance is available to a person between the age of 18 to 59 years.
However, the Policy can be renewed upto the age of 80 years.
a) Children above the age of 3 months can be covered provided parents are covered
concurrently and suitable premium is paid. If the child above 18 years is employed or if the
girl child is married, he or she shall cease to be covered under the policy. However male child
can be covered upto the age of 25 years if he is a bonafide regular student and fully
dependent on primary insured. Female child can be covered upto the time, she is unmarried.
b) If the insured has taken continuous Mediclaim insurance policy with us for at least 5 years
prior to attaining the age of 80 years the policy can be renewed beyond the age of 80 upto
the age of 90 years as a special case with the approval of Regional Incharge on case to case
basis. The premium chargeable shall be 10% of the premium for 75-80 years age slabs for
proposers above 85 and 20% of the premium for 75-80 age slabs for proposers above 90.
c) No inclusion of family member during currency of policy is permissible except for a new
born child between the ages of 3 months to 6 months and newly married spouse within 60
days of marriage. Otherwise inclusion of family member shall be allowed only at the time of
renewal. Prorata premium shall be charged for such inclusion during the currency of the
policy for the unexpired period.
4. Sum Insured: Minimum sum insured shall be Rs 50,000/- and can be increased in
multiples of Rs 25,000/-upto Rs 5 lacs. The sum insured must be identical for primary
insured and the dependents. However, the children may be covered for 50% Sum Insured as
per 4 above.
5. Payment of Mediclaim Premium out of taxable Income:- The amount must have been
paid using the taxpayers income chargeable to tax.
7. Partly contribution: If part payment is done by you and part payment by the parent, both
can claim deduction to the extent of their contribution subject to maximum allowed but
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amount should be paid directly to insurance company and paid through mode other than by
cash.
8. Mode of payment: The premium may be paid by any mode of payment other than cash.
Note prior to 1st April 2009, premium payment was required to be done only by
cheque. Credit card or other online payment mechanism where not allowed. Now all payment
modes except cash payment are accepted.
For Individual
Basic deduction: Mediclaim premium paid for Self, Spouse or dependant children.
Maximum deduction Rs 15,000. In case any of the persons specified above is a senior
citizen (i.e. 65 years or more as of end of the year) and Mediclaim Insurance premium
is paid for such senior citizen, deduction amount is enhanced to Rs. 20,000.
Additional deduction: Mediclaim premium paid for parents. Maximum deduction Rs
15,000. In case any of the parents covered by the Mediclaim policy is a senior citizen,
deduction amount is enhanced to Rs. 20,000.
For HUF
Mediclaim premium paid for any member of the HUF. Maximum deduction Rs
15,000. In case any member of the HUF covered by the Mediclaim policy is a senior
citizen, deduction amount is enhanced to Rs. 20,000.
Senior citizen: means who is at least of 65 year of age or more at any time during the
previous year.
EXAMPLE- 1
1. An individual assessee pays (through any mode other than cash) during the previous
year medical insurance premium out of his taxable income, as under:
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(i) Rs 12,000/- to keep in force an insurance policy on his Mediclaim and on the Mediclaim
of his wife and dependent children;
(ii) Rs 17,000/- to keep in force an insurance policy on the Mediclaim of his parents.
Under the new provisions he will be allowed a deduction of Rs 27,000/- (Rs. 12,000/- + Rs.
15,000/-) if neither of his parents is a senior citizen. However, if any of his parents is a senior
citizen, he will be allowed a deduction of Rs 29,000/- (Rs.12,000/- + Rs.17,000/). Whether
the parents are dependent or not, is not a consideration for deciding the deduction under the
new provisions.
Further, in the above example, if cost of insurance on the Mediclaim of the parents is Rs
30,000/-, out of which Rs 17,000/- is paid (by any non-cash mode) by the son and Rs
13,000/- by the father ( who is a senior citizen), out of their respective taxable income, the
son will get a deduction of Rs 17,000/- ( in addition to the deduction of Rs 12,000/- for
the medical insurance on self and family) and the father will get adeduction of Rs 13,000/-.
EXAMPLE 2
An individual assessee pays through credit card during the previous year Mediclaim
insurance premium as under:
1. Rs. 12,000 to keep in force an insurance policy on his Mediclaim and on the
Mediclaim of his wife and children
2. Rs. 17,000 to keep in force an insurance policy on the Mediclaim of his parents.
Under the proposed new provisions, he will be allowed a deduction of Rs. 27,000 (Rs. 12,000
+ Rs. 15,000) if neither of his parents is a senior citizen. However, if any of his parents is a
senior citizen, he will be allowed a deduction of Rs. 29,000 (Rs. 12,000 + Rs. 17,000).
Whether the parents are dependent or not, is not a consideration for deciding the deduction
under Section 80D.
EXAMPLE- 3
Question:- In the last budget, the finance minister announced exemptions for Mediclaim
charges paid for senior citizens. However, I am not sure if it has yet been notified and
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effective. I need to take medical insurance for both my parents, who are senior citizens. I
would appreciate if you can let me know.
Answer:- Earlier Sec 80D deduction in respect of medical insurance premium was Rs 15,000
for an individual and Rs 20,000 for a senior citizen. However, from this year, if someone
were to buy medical insurance for his parent/s, an additional deduction of Rs 15,000 (over
and above Rs 15,000) will be available. If such parent/s were senior citizen, the additional
deduction would be Rs 20,000. So a person insuring himself, his spouse, children and parents
could potentially get a deduction of Rs 35,000. This provision is effective from 1.4.08.
80D. (1) In computing the total income of an assessee, being an individual or a Hindu
undivided family, there shall be deducted such sum, as specified in sub-section (2) or sub-
section (3), payment of which is made by any mode, other than cash, in the previous year out
of his income chargeable to tax.
(2) Where the assessee is an individual, the sum referred to in sub-section (1) shall be the
aggregate of the following, namely:
(a) the whole of the amount paid to effect or to keep in force an insurance on the Mediclaim
of the assessee or his family as does not exceed in the aggregate fifteen thousand rupees; and
(b) the whole of the amount paid to effect or to keep in force an insurance on the Mediclaim
of the parent or parents of the assessee as does not exceed in the aggregate fifteen thousand
rupees.
Explanation.For the purposes of clause (a), family means the spouse and dependant children
of the assessee.
(3) Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1)
shall be the whole of the amount paid to effect or to keep in force an insurance on the
Mediclaim of any member of that Hindu undivided family as does not exceed in the
aggregate fifteen thousand rupees.
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(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) or in sub-section (3)
is paid to effect or keep in force an insurance on the Mediclaim of any person specified
therein, and who is a senior citizen, the provisions of this section shall have effect as if for the
words fifteen thousand rupees, the words twenty thousand rupees had been substituted.
Explanation. For the purposes of this sub-section, senior citizen means an individual resident
in India who is of the age of sixty-five years or more at any time during the relevant previous
year.
(5) The insurance referred to in this section shall be in accordance with a scheme made in this
behalf by
(a) the General Insurance Corporation of India formed under section 9 of the General
Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central
Government in this behalf; or
(b) any other insurer and approved by the Insurance Regulatory and Development Authority
established under sub-section (1) of section 3 of the Insurance Regulatory and Development
Authority Act, 1999 (41 of 1999).]
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In private insurance, buyers are willing to pay premium to an insurance company that pools
people with similar risks and insures them for Mediclaim expenses. The key distinction is
that the premiums are set at a level, which provides a profit to third party and provider
institutions. Premiums are based on an assessment of the risk status of the consumer (or of
the group of employees) and the level of benefits provided, rather than as a proportion of the
consumers income.
In the public sector, the General Insurance Corporation (GIC) and its four subsidiary
companies (National Insurance Corporation, New India Assurance Company, Oriental
Insurance Company and United Insurance Company) and the Life Insurance Corporation
(LIC) of India provide voluntary insurance schemes. The Life Insurance Corporation offers
Ashadeep Plan II and Jeevan Asha Plan II. The General Insurance Corporation offers
Personal Accident policy, Jan Arogya policy, Raj Rajeshwari policy, Mediclaim policy,
Overseas Mediclaim policy, Cancer Insurance policy, Bhavishya Arogya policy
and Dreaded Disease policy (Srivastava 1999 as quoted in Bhat R & Malvankar D, 2000)
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Of the various schemes offered, Mediclaim is the main product of the GIC. The Medical
Insurance Scheme or Mediclaim was introduced in November 1986 and it covers individuals
and groups with persons aged 5 80 yrs. Children (3 months 5 yrs) are covered with their
parents. This scheme provides for reimbursement of medical expenses (now offers cashless
scheme) by an individual towards hospitalization and domiciliary hospitalization as per the
sum insured. There are exclusions and pre-existing disease clauses. Premiums are calculated
based on age and the sum insured, which in turn varies from Rs 15 000 to Rs 5 00 000. In
1995/96 about half a million Mediclaim policies were issued with about 1.8 million
beneficiaries (Krause Patrick 2000). The coverage for the year 2000-01 was around 7.2
million.
Another scheme, namely the Jan Arogya Bima policy specifically targets the poor population
groups. It also covers reimbursement of hospitalization costs up to Rs 5 000 annually for an
individual premium of Rs 100 a year. The same exclusion mechanisms apply for this scheme
as those under the Mediclaim policy. A family discount of 30% is granted, but there is no
group discount or agent commission. However, like the Mediclaim, this policy too has had
only limited success. The Jan Arogya Bima Scheme had only covered 400 000 individuals by
1997.
The year 1999 marked the beginning of a new era for Mediclaim insurance in the Indian
context. With the passing of the Insurance Regulatory Development Authority Bill (IRDA)
the insurance sector was opened to private and foreign participation, thereby paving the way
for the entry of private Mediclaim insurance companies. The Bill also facilitated the
establishment of an authority to protect the interests of the insurance holders by regulating,
promoting and ensuring orderly growth of the insurance industry. The bill allows foreign
promoters to hold paid up capital of up to 26 percent in an Indian company and requires them
to have a capital of Rs 100 crore along with a business plan to begin its operations.Currently,
a few companies such as Bajaj Alliance, ICICI, Royal Sundaram, and Cholamandalam
among others are offering Mediclaim insurance schemes. The nature of schemes offered by
these companies is described briefly.
Bajaj Allianz: Bajaj Alliance offers three Mediclaim insurance schemes namely,
Mediclaim Guard, Critical Illness Policy and Hospital Cash Daily Allowance Policy.
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- The Mediclaim Guard scheme is available to those aged 5 to 75 years (not allowing entry
for those over 55 years of age), with the sum assured ranging from Rs 100 0000 to 500 000. It
offers cashless benefit and medical reimbursement for hospitalization expenses (pre-and post-
hospitalization) at various hospitals across India (subject to exclusions and conditions). In
case the member opts for hospitals besides the empanelled ones, the expenses incurred by
him are reimbursed within 14 working days from submission of all the documents. While
pre-existing diseases are excluded at the time of taking the policy, they are covered from the
5th year onwards if the policy is continuously renewed for four years and the same has been
declared while taking the policy for the first time. Other discounts and benefits like tax
exemption, Mediclaim check-up at end of four claims free year, etc. can be availed of by the
insured.
- The Critical Illness policy pays benefits in case the insured is diagnosed as suffering from
any of the listed critical events and survives for minimum of 30 days from the date of
diagnosis. The illnesses covered include: first heart attack; Coronary artery disease
requiring surgery: stroke; cancer; kidney failure; major organ transplantation; multiple
sclerosis; surgery on aorta; primary pulmonary arterial hypertension, and paralysis. While
exclusion clauses apply, premium rates are competitive and high-sum insurance
can be opted for by the insured.
- The Hospital Cash Daily Allowance Policy provides cash benefit for each and every
completed day of hospitalization, due to sickness or accident. The amount payable per day is
dependant on the selected scheme. Dependant spouse and children (aged 3 months 21years)
can also be covered under the Policy. The benefits payable to the
dependants are linked to that of insured. The Policy pays for a maximum single
hospitalization period of 30 days and an overall hospitalization period of 30/60 completed
days per policy period per person regardless of the number of confinements to
hospital/nursing home per policy period.
ICICI Lombard: ICICI Lombard offers Group Mediclaim Insurance Policy. This
policy is available to those aged 5 80 years, (with children being covered with their
parents) and is given to corporate bodies, institutions, and associations. The sum
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Max New York Life Insurance: The leading private life insurance company - Max
New York Life Insurance Company Ltd. has launched 'lifeline' - a Mediclaim
insurance product on Wednesday, 5th March 2008, across India. Now, the company
can boast of offering complete Mediclaim and life insurance products across ll regions
in India. This newly launched Mediclaim insurance product of Max New York Life
Insurance Company offers three groups of heath insurance solutions. The Director
Marketing Product Management and Corporate Affairs of Max New York Life
Insurance said that these three distinct heath insurance products are meant to cover
eventualities like hospitalization, surgery and critical illness of the insured. He points
out that these plans have been structured with features like coverage for a wide range
of ailments, no claim discount on revised premium for a Mediclaimy life, a fixed
premium for a five-year term, free second opinion from the best Mediclaim care
institutions of India on detection of illness. Further, it also has provision for a free
telephonic medical helpline across India. The hospitalization - is covered by
"Medicash plan", which is meant to provide a fixed amount of cash benefit on a day-
to-day basis during the entire period of hospitalization of the insured. The Medicash
plan would also cover expenses for admission in ICU, lump sum benefits against an
unlimited number of surgeries and recuperation benefits. The second plan of the
newly launched Mediclaim insurance of Max New York Life Insurance, is the
"Wellness Plan", which is a more attractive one and covers 'critical illness' like
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cancer, alzheimers, heart ailments, liver disease, deafness, permanent disability, etc.
The Wellness plan covers thirty eight critical illnesses, which is the highest number of
illness covered under one insurance plan in India by any insurance company. The
third Mediclaim insurance policy of Max New York Life Insurance is a term plus
Mediclaim protection plan known as "Safety Net". This provides coverage to the
insured person for any losses incurred by him/her in eventualities like critical illness,
accident, disability and death.
With 21 lakh life insurance policies and with an assured sum of Rs 62,000 crores in
its kitty Max Life Insurance wishes to achieve business at least five percent higher
than it did in the last financial year. The company also announced that it would go for
an expansion drive and would also increase the number of branch offices in Tamil
Nadu within the fiscal year 2008-2009. Max New York Life Insurance Company is
one of the fastest growing life insurance companies in India and is the first life
insurance company of India to be awarded with ISO 9001:2000 certification. This Rs
907.4 crores insurance company is one of the most respected companies in India.
After making strong inroads into the Indian life insurance market with a strong
product portfolio the company is expected to do well with its new product line in the
Indian Mediclaim insurance sector as well.
Royal Sundaram Group: The Shakthi Mediclaim Shield policy offered by the Royal
Sundaram group can be availed by members of the womens group, their spouses and
dependent children. No age limits apply. The premium for adults aged up to 45 years
is Rs 125 per year, for those aged more than 45 years is Rs 175 per year. Children are
covered at Rs 65 per year. Under this policy, hospital benefits up to Rs 7 000 per
annum can be availed, with a limit per claim of Rs 5 000. Other benefits include
maternity benefit of Rs 3 000 subject to waiting period of nine months after first
enrolment and for first two children only. Exclusion clauses apply (Ranson K &
Jowett M, 2003)
Cholamandalam General Insurance: The benefits offered (in association with the
Paramount Mediclaim Care, a re-insurer) in case of an illness or accident resulting in
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hospitalization, are cash-free hospitalization in more than 1 400 hospitals across India,
reimbursement of the expenses during pre- hospitalization (60 days prior to
hospitalization) and post- hospitalization (90 days after discharge) stages of treatment.
Over 130 minor surgeries that require less than 24 hours hospitalization under day
care procedure are also covered. Extra Mediclaim covers like general Mediclaim and
eye examination, local ambulance service, hospital daily allowance, and 24 hours
assistance can be availed of.Exclusion clauses apply.
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covers 7 000 people in three villages and outpatient and inpatient Mediclaim care are
directly provided.
The Voluntary Mediclaim Services (VHS), Chennai, Tamil Nadu was established in
1963. It offers sliding premium with free care to the poorest. The benefits include
discounted rates on both outpatient and inpatient care, with the VHS functioning as
both insurer and Mediclaim care provider. In 1995, its membership was 124 715.
However, this scheme suffers from low levels of cost recovery due to problems of
adverse selection.
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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 Mediclaim care (as only 80% of cost is reimbursed if referral is made to
private facility when such facilities are not available with the CGHS).
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Mediclaim education. Medical care is also provided to employees and their family members
without fee for service. Originally, the ESIS scheme covered all
power-using non-seasonal factories employing 10 or more people. Later, it was extended to
cover employees working in all non-power using factories with 20 or more persons. While
persons working in mines and plantations, or an organization offering Mediclaim benefits as
good as or better than ESIS, are specifically excluded. Service establishments like shops,
hotels, restaurants, cinema houses, road transport and news papers printing are now covered.
The monthly wage limit for enrolment in the ESIS is Rs. 6 500, with a prepayment
contribution in the form of a payroll tax of 1.75% by employees, 4.75% of employees' wages
to be paid by the employers, and 12.5% of the
total expenses are borne by the state governments. The number of beneficiaries is over 33
million spread over 620 ESI centres across states. Under the ESIS, there were 125 hospitals,
42 annexes and 1 450 dispensaries with over 23 000 beds facilities. The scheme is managed
and financed by the Employees State Insurance Corporation (a public undertaking) through
the state governments, with total expenditure of Rs 3 300 million or Rs 400/- per capita
insured person.
The ESIS programme has attracted considerable criticism. A report based on patient surveys
conducted in Gujarat (Shariff, 1994 as quoted in Ellis R et a, 2000) found that over half of
those covered did not seek care from ESIS facilities. Unsatisfactory nature of ESIS services,
low quality drugs, long waiting periods, impudent behaviour of personnel, lack of interest or
low interest on part of employees and low awareness of ESI procedures, were some of the
reasons cited.
The Government of India has also undertaken initiatives to address issues relating to access to
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public Mediclaim systems especially for the vulnerable sections of the society. The National
Mediclaim Policy 2002 acknowledges this and aims to evolve a policy structure, which
reduces such inequities and allows the disadvantaged sections of the population a fairer
access to public Mediclaim services. Ensuring more equitable access to Mediclaim services
across the social and geographical expanse of the country is the main objective of the
policy. It also seeks to increase the aggregate public Mediclaim investment through increased
contribution from the Central as well as state governments and encourages the setting up of
private insurance instruments for increasing the scope of coverage of the secondary and
tertiary sector under private Mediclaim insurance packages. The government envisages an
increase in Mediclaim expenditure as a % of GDP from existing 0.9% to 2.0 % by 2010 and
an increase in the share of central grants from the existing 15% to constitute at least 25% of
total public Mediclaim spending by 2010. The State government spending for Mediclaim in
turn would increase from 5.5% to 7% of the budget by 2005, to be further increased to 8% by
2010.
The National Population Policy (NPP) 2000, envisages the establishment of a family welfare-
linked Mediclaim insurance plan. As per this plan, couples living below the poverty line who
undergo sterilization with not more than two living children would be eligible for insurance.
Under this scheme, the couple along with their children would be covered for hospitalization
not exceeding Rs 5 000 and a personal accident insurance cover for the spouse undergoing
sterilization. The Institute of Mediclaim Systems (IHS), Hyderabad has been entrusted the
responsibility of operationalizing the mandate of the NPP 2000. The initial scheme proposed
by the HIS was discussed at a workshop in June 2003. The consensus at the meeting was that
the scheme, needed further improvement prior to its implementation even as a pilot project.
In keeping with the recommendations of the Tenth Five Year Plan and the National
Mediclaim Policy (NHP) 2002, the Department of Family Welfare is also proposing to
commission studies in eight states covering eight districts, to generate district-specific data,
which is essential for conceptualization of a reasonable and financially viable insurance
scheme.
The current plan the Tenth Five Year Plan (2002-07) - also focuses on exploring alternative
systems of Mediclaim care financing including Mediclaim insurance so that essential, need-
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based and affordable Mediclaim care is available to all. The urgent need to evolve, implement
and evaluate an appropriate scheme for Mediclaim financing for different income groups is
acknowledged. In the past, the government has tried to ensure that the poor get access to
private Mediclaim facilities through subsidy in the form of duty exemptions and other such
benefits. Social Mediclaim insurance for families living below the poverty line has been
suggested as a mechanism for reducing the adverse economic consequences of hospitalization
and treatment for chronic ailments requiring expensive and continuous care.
In the budget for the year 2002-2003, an insurance scheme called Janraskha was introduced,
with the aim of providing protection to the needy population. With a premium of Re 1/- per
day, it ensured indoor treatment up to Rs 3 000 per year at selected and designated hospitals
and outpatient treatment up to Rs 2 000 per year at designated clinics, including civil
hospitals, medical colleges, private trust hospitals and other NGO-run institutions. A few
states have started implementing this scheme under pilot phase.
In the budget for the period 2003-2004, another initiative of community-based Mediclaim
insurance has been announced. This scheme aims to enable easy access of less advantaged
citizens to good Mediclaim services, and to offer Mediclaim protection to them. This policy
covers people between the age of three months to 65 years. Under this scheme, a premium
equivalent to Re 1 per day (or Rs 365 per year) for an individual, Rs 1.50 per day for a family
of five (or Rs 548 per year), and Rs 2 per day for a family of seven (or Rs 730 per year),
would entitle them to get reimbursement of medical expenses up to
Rs 30 000 towards hospitalization, a cover for death due to accident for Rs 25000 and
compensation due to loss of earning at the rate of Rs 50 per day up to a maximum of 15 days.
The government would contribute Rs 100 per year towards the annual premium, so as to
ensure the affordability of the scheme to families living below the poverty line. The
implementation of this scheme rests with the four public sector insurance companies.
The government also offers assistance by way of Illness Assistance Funds, which have been
set up by the Ministry of Mediclaim and Family Welfare at the national level and in a few
states. State Illness Assistance Funds exist in Andhra Pradesh, Bihar, Goa, Gujarat, Himachal
Pradesh, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Mizoram,
Rajasthan, Sikkim, Tamil Nadu, Tripura, West Bengal, NCT of Delhi and UT of Pondicherry.
A National Illness Assistance Fund (NIAF) was set up in 1997, with the scheme being
reviewed in January 1998. Through this, three Central
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The Government of Goa along with the New India Assurance Company in 1988 developed a
medical reimbursement mechanism. 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 Mediclaim Services. The overall limit is Rs
30 000 for the insured person for a period of one year.
A pilot project on Mediclaim insurance was launched by the Government of Karnataka and
the UNDP in two blocks since October 2002. The aim of the project was to develop and test a
model of community Mediclaim 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
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CHAPTER II
Literature Review
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CHAPTERI V
1. Your age ? ( one box)
[1] < 30 years
[2] 3039years
[3] 4049years
[4] 50 and over years
120
100
80
60 Series1
40
20
0
yes no
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Project on Mediclaim Insurance
3. The question was asked to the respondents to know how many of the respondents
had a Shop insurance policy.?
90
80
70
60
50
Series1
40
30
20
10
0
yes no
From the survey it was found out that 65% of the respondents had a Medi claim insurance
policy whereas 35% of the respondents didnt had a Medi Claiminsurance policy
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Project on Mediclaim Insurance
80
70
60
50
40 Series1
30
20
10
0
bajaj oriental national others
The finding which came out from the survey was that 55.83% of the respondents who have a
insurance cover bought Medi claim insurance from National Insurance Company Ltd.
National Insurance Company is the most preferred brand in the insurance industry because it
is the only government company which offers insurance. People prefer to buy insurance from
National Insurance Company
because of the security being one of the prime factors. In the figure we can also see that
nowadays people mindset have changed towards insurance and are opting for private
company for insurance cover or policy.
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Project on Mediclaim Insurance
After the survey it was found that most of the respondents took policy or shop insurance
cover from the suggestions of their friends or family.And only 23 respondents took policy on
the recommendation of the agents.Other sources like banks, corporate tie-ups and etc. plays a
minute role in reaching out people for insurance policies.
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Project on Mediclaim Insurance
Number
140
120
100
80
Number
60
40
20
0
Fire Motor Burglary Others
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Project on Mediclaim Insurance
Number
90
80
70
60
50
Number
40
30
20
10
0
Yes No
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Project on Mediclaim Insurance
Number
60
50
40
30 Number
20
10
0
Better Services More Options Better claim handling Others
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Project on Mediclaim Insurance
Number
140
120
100
80
Number
60
40
20
0
Burglary
Public Liability
Theft
Fire
Office
Neon sign
Glass Plate
Compensation
Workmens
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Project on Mediclaim Insurance
Number
120
100
80
60 Number
40
20
0
Safety Tax Rebate Compulsary by law Market Trend
Page 60