CHAPTER 19

Health Insurance Products

Key Points:
This chapter provide overall insight into the various health insurance products
offered by insurance companies in India. From just one product – Mediclaim to
hundreds of products of different kinds, the customer has a wide range to choose
appropriate cover. The chapter explains the features of various health products that
can cover individuals, family and group
1. A health insurance policy provides financial protection to the insured person in
the event of an unforeseen and sudden accident / illness leading to
hospitalization.

2. Health insurance products can be classified on the basis of number of people

covered under the policy: individual policy, family floater policy, group policy. It

also classified on the basis of type of policy: Indemnity Covers, Fixed Benefit
covers, Critical illness Covers

3. Based on common understanding , IRDA issued guidelines on standardization

in Health Insurance in 2013

4. A hospitalization expenses policy or Mediclaim reimburses the cost of

hospitalization expenses incurred on account of illness / accident.

5. IRDA Health Insurance Standardization guidelines define Pre-hospital

expenses as “Medical expenses incurred immediately before the insured
person is hospitalized, provided that such Medical Expenses are incurred for
the same condition for which the Insured Person's Hospitalization was
required, and the In-patient Hospitalization claim for such Hospitalization is
admissible by the Insurance Company” eg tests, medicines, doctors’ fees etc.
Hospitalization could be either emergency hospitalization or planned. If
planned surgery, there would be expenses incurred by him prior to the
hospitalization.

6. Pre hospitalization expenses would be relevant medical expenses incurred

during period up to the defined number of days (generally 30 days) prior to
hospitalization and will be considered as part of claim.

7. Post hospitalization expenses defined as Medical Expenses incurred

immediately after the Insured Person is discharged from hospital, provided
that such Medical Expenses are incurred for the same condition for which the
Insured Person's Hospitalization was required, and the In-patient
Hospitalization claim for such Hospitalization is admissible by the Insurance
Company. Such expenses have to be related to the treatment taken in the
hospital & are covered under the health policies such as expenses for
medicines, drugs, review by doctors etc. after discharge from hospital.
8. Post hospitalization expenses would be relevant medical expenses incurred
during period up to the defined number of days (generally 60 days) after
hospitalization and will be considered as part of claim.

9. Domiciliary Hospitalization means an individual health policy also has a

provision to take care of expenses incurred for medical treatment taken at
home without being admitted to a hospital for 3 to 5 days

10. Based on coverage option two types of Hospitalization indemnity Product-

Individual Coverage as well as Family Floater
11. Individual Coverage: An individual insured can cover himself along with family
members such as spouse, dependent children, dependent parents,
dependent parents in law, dependent siblings etc. under a single policy with a
separate sum insured chosen for each insured person .Premium will be
charged for each individual insured according to his age and sum insured
chosen and any other rating factor
12. In a family floater policy, the family consisting of spouse, dependent children
and dependent parents are offered a single sum insured which floats over the
entire family.
13. Top-up covers or high deductible insurance plans works along with a basic
health cover having a low sum insured and comes at a comparatively
reasonable premium.
14. IRDAI has mandated special provisions for insured persons who are Senior
Citizens( people over 60 years of age)
15. A hospital daily cash policy provides a fixed sum to the insured person for
each day of hospitalization. The fixed benefits cover provides adequate cover
to the insured person and also helps the insurer to effectively price his policy
16. Critical illness policy is a benefit policy with a provision to pay a lump sum
amount on diagnosis of certain named critical illness. It is available for age
group of 21 years to 65 years
17. There are 2 types of Long term care insurance, one is Pre-funded plans and

other one is immediate need plans. Bhavishya Arogya policy is an Deferred

Mediclaim policy
18. Combi product offer the combination of a life insurance cover of a life
insurance company and a health insurance cover offered by non-life and/or
standalone health insurance Company. The products are jointly designed by
the two (approved tied-up) insurers and marketed through the distribution

channels of both insurers. The product may be offered both as individual

insurance policy and on group insurance basis.
19. A Personal Accident (PA) Cover provides compensation in the form of death
and disability benefits due to unforeseen accidents. It also provide some form
of medical cover along with the accident benefit .Out-patient covers provide
for medical expenses like dental treatments, vision care expenses, routine
medical examinations and tests etc. that do not require hospitalization.
20. Package policies are umbrella covers give, under a single document, a
combination of covers.
21. Micro insurance and health insurance for poorer sections are available based
on IRDA (Micro-Insurance) Regulations 2005.Insurance to Low Income

Groups & informal sector.ex- Jan Arogya Bima Policy, Universal Health

Insurance Scheme (UHIS). Rashtriya Swasthya Bima Yojana(RSBY), and

Pradhan Mantri Suraksha Bima Yojana has been launched by the Ministry of
Labour and Employment, Government of India, to provide health insurance
coverage for the below poverty line (BPL) families
22. To Aimed at including maximum number of people in the banking mainstream

Govt of India launched Pradhan Mantri Jan Dhan Yojana on 28 th August 2014.
It is a ZERO balance Ac with lot of special benefits under this scheme
23. Overseas travel insurance – People are exposed to the risk of accident, injury
and sickness during his stay overseas. This policy primarily meant for
accident and sickness benefits but some plans can also cover other important
benefits also.
24. Group policy is taken by a group owner who could be an employer, an
association, a bank's credit card division, where a single policy covers the
entire group of individuals. A group policy is taken by a group owner who
could be an employer, an association, a bank’s credit card division, where a
single policy covers the entire group of individuals. Here Term is just 1 year
only. There are 2 types, one is Group Health Cover and other one is
Corporate buffer/Floater policy
25. Disease specific covers (5-20 Year term) like cancer, diabetes etc. & wellness
have been introduced in the Indian market, mostly by life insurer. Product
designed to cover diabetic persons are also a special products .It can be
taken from age 26 to 65 years and is renewable up to 70 years.SA is basically
from Rs 50,000 to 5,00,000.Room Capping on Room rent is applicable
26. Corporate Floater or Buffer Cover amount helps meet excess expenses over
and above the family sum insured. Corporate Frequent Travellers‟ Plan is an
annual policy whereby a corporate takes individual policies for its executives
who frequently make trips outside India.
a. Many terms used in health insurance have been standardized by IRDA
by regulation to avoid confusion especially for the insured.

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