Health Insurance Notes Chapters (17 to 21)

Definition of Health Insurance : It is defined as a contract between Insurer and

Insured where the insurer agrees to pay the hospitalisation expenses to the
extent of agreed Sum Insured in the event of an illness/injury

Important Terminologies

TPA : Third party administrator came into existence in 2001.Provides

administrative services to companies and hospital.
Network Provider : List of hospitals enlisted by the TPA and Insurer to provide
medical services by cashless facility.

Cashless Facility : where the payments, costs of treatment are directly paid to
the network provider by Insurer.
To avail this facility the insured has to approach the network hospital, by
showing the cashless card issued by the Insurer at the TPA counter.

Portability :Switching from one Insurer to another. It also transfers the credit
gained for pre -existing condition/time bound exclusions.

Pre existing conditions : Already existing physical condition or illness. This will
be covered after a waiting period.

Day care : Treatment which requires less than 24 hrs admission eg.
Cataract,Dialysis,Chemotheraphy etc

Inpatient Treatment: where a person undergoes treatment after getting

admitted in the hospital.
Outpatient Treatment : where a person undergoes Treatment without
admission into the hospital .e.g OP consultation, Diagnostic test etc.
Domicilary Treatment :Treatment taken from home subject to following
conditions
 Minimum of 3 days treatment of illness/injury
 Condition of the patient is v critical and cannot be moved to the
hospital.
 Cannot be admitted to hospital due to lack of accommodation. E.g when
epidemic like malaria,dengue strikes most hospitals are full.

Family Floater Policies :One policy for the entire family.It covers Husband,Wife
Children,Parents upto the extent of Sum Insured.It is economical as the
premium is based on the eldest members age.
Hospital – Definition : An Institution for Inpatient/Daycare treatment of
illness/injury registered with Local authorities under Clinical Establishment Act
2010.
It should also have the following criteria.
 Must have nursing staff round the clock.
 Atleast 10 in-patient beds in cities with population of less than 10 lakhs
and 15 in-patient beds in cities with population of more than 10 lakhs.
 Doctors round the clock
 Fully equipped operation theatre
 Maintains daily records of patients.

Coverage :Pre hospitalisation upto 30 days and Post Hospitalisation upto 60

days are included in a health insurance policy.The expenses include cost of
room/bed charges,boarding exps,Nursing exps,Doctors fees,Diagnostic
test,operation theatre charges,expenses relating to surgical appliances etc

Waiting Period (specific) is applicable for conditions where treatment can be

postponed like cataract,Hernia,Hysterectomy etc
Maternity expenses are covered after a waiting period of 2 years.
No claim bonus ,ambulance charges,free medical checkups are given in case of
claim free years.

Some permanent exclusions in health insurance

Cosmetic surgery,Plastic surgery,Routine helath checks,Dental treatment,
Asthetic treatment etc.

Two types of claims in Health Insurance.

Cashless and Reimbursement.
Income Tax benefit u/s 80 D can be availed.
A regular hospitalisation indemnity policy covers expenses if the duration of
stay is 24 hours or more.
Conditions and Warranties :
Condition is a provision in an insurance contract which forms the basis of the
agreement.
e.g Claim intimation condition may state that a claim should be filed within
certain number of days from date of discharge.
Warranties are used in a contract to limit the liability of the insurer under
certain circumstances or to reduce the hazard.it plays an important role in
managing the risk for the insurer.
e.g in a condition of curfew the citizens should not move in groups as per law .

Importance of Health Insurance

Providing financial assistance to pay medical facilities.
Preserving the savings of an individual.