Assignment of Subject titled “Health Insurance”

By-Tarun Arora

Roll Number-1920983084

Q1-How much % of FDI(Foreign Direct Investment) is being allowed in insurance sector in other
countries(Like in India it is 49%).Present your view in support or against the FDI in Health Insurance
and Health Care?(200 Words)

Ans1-

Healthcare Spend By Other Countries

Country Healthcare Spend (As a % of GDP)

China 4.5
Brazil 8.4
USA 15.7
UK 8.4
Global 9.7

FDI in Health Insurance and Healthcare(In Favour)

 Advantages of FDI In insurance sector-

1. Capital for Expansion-
FDI has the capacity to satisfy India’s long term capital requirements to fund the
building of infrastructures that is important for the development of the US.
Infrastructure has been the most important aspect which has restricted the
progress of the Indian Economic system. Insurance Quarter has the functionality
of elevating long term capital from the loads as it is the only
street in which humans installed money for as long as 30 years even greater.
An increase in FDI in insurance could not directly be a boon for the Indian
economic system, the investment not withstanding but by means of making
extra human beings invest in long term finances to fuel the growth of the Indian
Economy.
2. Wider Scope for Growth-
FDI in insurance might boom the penetration of insurance in India, wherein the
penetration of insurance is abysmally low with insurance premium at
approximately 3% of GDP towards about 8% global average. This would be
higher via advertising and marketing attempt by means of MNCs, better
product innovation, client education and many others.
3. Moving Towards Global Practices-
India’s insurance marketplace lags in the back of other economies in the
baseline degree of coverage penetration. At the most effective three.1%.

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 India is nicely behind the 12.five% for the United Kingdom,10.5% for
japan,10.3% for Korea and nine.2% for America. Currently represents only
Rs.827 crore of the Rs.3179 crores capitalizations of private existence coverage
organisations.
4. Provide Customers with Competitive Products, More Options and Better
Service Levels-
Opening the FDI inside the insurance area would be proper for the clients, in a
variety of methods. Increasing FDI will effect on a lot of industries in a fantastic.

Q2- How Principle of Insurance can be applied in Health Insurance? Please state examples. (3-4
Examples)

Ans2- 1) Utmost good faith- In other words, it states that the transparency should be maintained that is
the type and the amount of healthcare costs that will be covered by the health insurance company are
specified in advance in the member contract or “Evidence of Coverage” or booklet.

For Example- If a person is going to multispeciality hospital for any treatment and has advised any
surgical procedure to be done then if he or she wish to pay the bill by using the insurance cover. He will
only be able to pay via health insurance premium only if it is known to him or her at the time of signing
the policy documents that what type of treatment will be covered and upto what amount the bill will be
paid in advance to avoid any inconvenience. Therefore, transparency should be maintained.

2) Insurable Interest- Insured must have insurable interest in the subject matter of the insurance.

For Example- The owner of a taxicab has insurable interest in the taxicab because he is getting income
from it. But, if he sells it, he will not have an insurable interest left in that taxicab.

3) Principle of Indemnity- Indemnity means security, protection and compensation given against
damage, loss or injury.

For Example- If a person has car insurance and has a health insurance also got injured badly in an
accident then he will get the two compensations i e- that is for the damage of the car happened in the
accident as the part of the car insurance which he had done earlier therefore he will also get the claim
from the health insurance company also as the part of the expenses which he had made during his
hospitalization for his treatment also.

Q3- Should Health Insurance be mandatory on line of motor Insurance? Countries where it is
mandatory? How they are benifitting out of it?

Ans3- Yes, Health Insurance be mandatory on the line of motor insurance because In our Country like
India it is not possible for everyone to pay the expenses for hospitalization which will be in lakhs in many
multispeciality hospital because it is possible to pay in cash easily that it is not been able to save from
the salary despite of many expenses in that case health insurance is beneficial. Countries where the
health insurance is mandatory are-

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1) France

2) Dubai

3) United States

4) Oman

5) Switzerland

How they are benifitting from it?

1) In the time of any pandemic they are able to get the same quality of treatment inspite of
rationalization on the basis of the cost that he is paying that is the cost of treatment is covered by the
insurance company.

2) In the case of any hospitalization they are able to get the cost effective treatment easily only because
of compulsory health insurance policy norms laid by the country.

3) It increases the life expectancy of a person upto many years.

4) They protect the individual from the pressure of being in debt for paying the expenditure related to
health or it lays emphasis on universal health coverage which is beneficial inspite of paying huge amount
of money.

5) It prevents anyone from poverty.