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Introduction to Insurance - 1
Insurance: in simple language it means to TRANSFER OF RISK to someone who is capable of
handling it generally to insurer (Insurance company).
A) Life Insurance history and evolution:
Insurance Origin London’s Lloyd coffee house
1st Life insurance company to
be set up in India Oriental Life Insurance company
1st Non Life Insurance company
established in India Triton Insurance Company Ltd
1st Indian insurance co. Bombay Mutual Assurance society ltd. Found in 1870 in Mumbai
National Insurance company ltd oldest insurance company founded in 1906
The Insurance Act 1938 first legislation enacted to regulate the conduct of insurance companies in India.

-Life Insurance Business was nationalized on 1St September 1956 by merging 170 insurance
companies and 75 prov. fund Societies & Life Insurance Corporation of India (LIC) was formed.
-Non – Life insurance business was nationalized in 1972 by amalgamating 106 insurers, General
Insurance Corporation of India(GIC) and its 4 subsidiaries was formed.
-Malhotra Committee and IRDA : Malhotra committee – setup in 1993 to explore and recommend
changes for development and it submitted the report in 1994.
-IRDAI – Insurance Regulatory and Development authority of India was setup by an act IRDA Act
1999 as a statutory regulatory body for both life and nonlife.

Risk management technique: These various types of techniques that can be used to manage risk
are ;-- Risk Avoidance: Controlling risk by avoiding a loss situation.
Risk Retention: One tries to manage the impact to risk and divides to bear the risk and its
effects by oneself.
INSURANCE IS A RISK TRANSFER MECHANISM.
Insurance as a tool for managing risk:
 Don’t risk a lot for a little. E.g there is no need to insure a ball pen as its cost is not high.
Role of Insurance in society:
The money raised from premium is invested in to the development of infrastructure needs.

Govt. Sponsored Insurance schemes: Employees state insurance corporation, crop insurance
scheme (RKBY), Rural insurance schemes.
Run by insurer and not supported by Govt. schemes: Janata Personal Accident, Jan Arogya.

CUSTOMER SERVICE – 2
Insurance is a service. Insurance is an Intangible good.
Insurance agent’s role in providing great customer service
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-Point of Sale – the 1 point for service is the point of sale. The agent should be able to
understand the needs and suggest products whose benefit features are best suitable. The role of
an agent is like a personal financial planner and advisor.
-Proposal Stage – the agent has to help customers in filling the proposal form. It is important
that the agent explains and clarifies the proposers doubt while filling the form.
-Acceptance stage – the promptness of agent in handling over FPR to customer develop surety in
customers mind. Delivery of policy bond is another major opportunity.
-Premium Payment – agents can be in continuous touch with their customers through reminder
calls for premium due’s in order to avoid lapsation of policy.
-Claim Settlement – agents play crucial role during claim settlement by providing policy holder
details required during investigation stage.

Elements of effective listening – Paying attention, providing feedback, responding appropriately,

empathetic listening and not being judgemental.
Non Verbal Communication:
Listening skills: Active Listening: Is where we consciously try to hear not only the words but
also, more importantly, try to understand the complete message being sent by another.
i. Paying attention
ii. Demonstrating that you are listening – Use of body language plays an important role .
iii. Provide feedback
iv. Not being Judgmental – Such judgmental approach can result in the listener being
unwilling allow the speaker to continue speaking, considering it a waste of time.
v. Responding appropriately
vi. Empathetic Listening – Being empathetic literally means putting yourself in the other
and feeling his or her experience as he or she would feel it.

GRIEVANCE REDRESSAL MECHANISM – 3

Grievance Redressal Machanism – IRDAI has various regulations in order to render the
consumers grievances/ complaints which come under prediction of policy holder’s interests’
regulations 2002.
Integrated grievance management system (IGMS) – IRDAI has launched an integrated grievance
management system (IGMS) which acts as a central repository of insurance grievance data and as
a tool for monitoring grievances in the industry. Policy holders can register on this system with
their policy details. Complaints are then forwarded to the respective insurance company.
The Consumer Protection Act 1986 – the act was passed “ to provide for better protection of the
interest of consumers and to make provision for the establishment of consumer’s disputes”.
Ombudsman : Total offices of ombudsman in India – 12.
The ombudsman power is restricted to the value not exceeding Rs.20 lacs.
Recommendation should be made within 1 month of the receipt of a complaint.
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The complainant has to accept the recommendation in writing within 15 days of receipt of
such recommendation.
The insurance companies are required to honor the AWARDS passed by Ombudsman within 15
days.
If the dispute is not settled, the Ombudsman will pass an award to the insured within 3
months/ 90 days from the date of receipt of the complaint. The insured should acknowledge
within 1 month of receipt of such award.

Judicial Channels :

Consumer Forum
National Commission –Complaints of Claims value exceeding Rs. 1 crore
State Commission Complaints of Claims value Rs. 20 lakhs to Rs. 100 lakhs
District forum - Complaints of Claims value upto Rs. 20 lakhs.
4. Important days :
a. 10 days – Insurer has to communicate the policy holder on any inquery.
b. 15 days/ Free Look /Cooling Off period – Customer can cancel the contract within 15 days of
receiving the policy bond.
c. 15 days – Insurer has to convey the policy holder about acceptance or rejection of proposal.
d. 15 days – In case of claim insurer can ask for additional documents within 15 days of receiving
the claim documents.
e. 15 days – Insurer has to honor the Award passed by the Ombudsman within 15 days .
f. 15 days – Grace period in case on monthly mode of premium payment.
g. 31 days or one month – Grace period in case of Quarterly / Half Yearly / Annual mode.
h. 30 days – Ombudsman has to pass recommendation.
i. 30 days – Insurer has to settle the claim within 30 days after receiving the claim document.
j. 90 days – Ombudsman has to pass an award within 90 days.
k. 180 days – maximum time to complete investigation in case of disputed claims.

REGULATORY ASPECTS OF INSURANCE AGENTS – 4

- An application seeking appointment as an insurance agent of an insurer shall submit as
application in Form I –A to the Designated Official of the insurer.
LEGAL PRINCIPLES OF AN INSURANCE CONTRACT – 5
Insurance Contract – An insurance policy is a contract between 2 parties – Insurer (Insurance
Company) and Insured (Policy Holder) as per Indian Contract Act 1872.
Uberrima Fides or Utmost Good Faith – it means that every party to contract must disclose all
material facts relating to the subject matter of insurance whether asked or not.
Material facts/Information – Proposer family history, medical history, financial details,
occupational details, illness if any , habits etc. are known as material facts.
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Breach of Utmost Good Faith –
- Non- Disclosure – not informing certain details.
- Concealment – intentionally not giving details.
- Misrepresentation – a) Innocent – Bu mistake giving wrong information.
b) Fraudulent – intentionally giving wrong information.
3) Insurable Interest – it is the financial interest the proposer has in his belongings i.e., Self,
spouse, parents, house, car etc is termed as insurable interest.
In Life Insurance – Insurable interest should be present at the start of the policy.
In Non-Life Insurance – Insurable interest should be present both at the start and during claim.
In Marine Insurance – Insurable interest should be present at the time of claim.
4)Proximate Cause – Proximate cause is defined as the active and efficient cause that sets in
motion a chain of events which brings about a result, without the intervention of any force
started and working actively from a new and independent source.
6)Indemnity It means that the policyholder, who suffers a loss, is compensated so as to put
him or her in the same financial position as he or she was before the occurrence of the loss event.

WHAT LIFE INSURANCE INVOLVES – 6

Life Insurance Business Components
Every human being has a value which can be determined and is termed as Human Life
Value (HLV). HLV helps to determine how much insurance one should have for full
protection.
E.g. Mr. Mahesh earns Rs. 120000 per annum and spends Rs. 24000 on himself. Therefore
net earnings for family in case of Mr. Mahesh’s death is Rs.96000 per annum.
Suppose rate of interest is 8% then HLV = 96000/0.08 = 12,00,000.
Indemnity – in the occurrence of an event, the procedure to assess the loss and pay the
compensation for this loss is known as Indemnity.
Principle of Risk Pooling – it works on the principle of mutuality. Here premium collected from
various people is collected in same pool for same risk and used for same kind of risk – claim.
Under no circumstances money collected under one risk pool is used for another pool.

FINANCIAL PLANNING – 7
Financial products – for above needs to be fulfilled following products can be used
Transactional product – Bank deposits can be used for cash requirements.
Contingency product – Insurance can be used to protect against unforeseen events.
Wealth accumulation product – shares, bonds can be used to invest for wealth creation.
The right time to start financial planning is when one starts receiving his 1st salary.

LIFE INSURANCE PRODUCTS –( I ) – 8

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Products may be >Tangible or > Intangible
Life Insurance is a product that is intangible.
Traditional Life Insurance Products
-Term Insurance Plans
-Whole Life Insurance Plans
-Endowment Insurance Plans
Variants of Term Assurance
-Decreasing term Insurance
-Increasing term insurance
-Term assurance with return of premiums

Whole Life Insurance There is no fixed term of cover but the insurer offers to pay the agreed
upon, death benefit when the insured dies, no matter whenever the death might occur.
Term Insurance policy A term insurance policy comes handy as an income replacement plan.
The unique selling proposition (USP) of term assurance is its low price, enabling one to buy
relatively large amounts of life insurance on a limited budget.
Money Back Plan It is typically an endowment plan with the provision for return of a part of the
sum assured in periodic installments during the term and balance of sum assured at the end of
the term,.
LIFE INSURANCE PRODUCTS (II) – 9
Non-traditional life insurance products Universal Life Insurance
Universal Life Policy was first introduced in the USA.
Universal life insurance is a form of Permanent life insurance characterized by its flexible
premiums, flexible face amount and death benefit amounts, and the unbundling of its pricing
factors.
Non-traditional life insurance products in India
-Variable insurance plans (UK) -Unit Linked Insurance Plans
Break-up of ULIP Premium
-Expenses -Mortality -Investment
Investment fund options offered by ULIP Equity Fund:
This fund invests major portion of the money in equity and equity related instruments
Equity fund: Invests major portion of the money in equity and equity related instruments.
Debt Fund: Invests major portion of the money in Govt. Bonds, Corporate Bonds, Fixed deposits
etc.
Balanced Fund: Invests in a mix of equity and debt instruments
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Money Market Fund: Invests money mainly in instruments such as treasury bills, certificate of
deposit, commercial paper etc.
Variable Life Insurance:
This policy was first introduced in the United States in 1977. Variable life insurance is a kind of
“Whole Life” policy where the death benefit and cash value of the policy fluctuates according to
the investment performance of a special investment account into which premiums are credited.
Theoretically the cash value can go down to zero, in which case the policy would terminate.
Unit Linked Insurance: Unit Linked plans, also known as ULIP’s emerged as one of the most
popular and significant products, displacing traditional plans in many markets.
APPLICATIONS OF LIFE INSURANCE -10
Married Women’s Property Act: Section 6 of the Married Women’s Property Act, 1874
provides for security of benefits under a life insurance policy to the wife and children. Section 6 of
the Married Women’s Property Act, 1874 also provides for creation of a Trust.
Beneficiaries under Section 6 of MWP Act:
-Wife alone -Wife and one or more children jointly -One or more children
Features of a policy under the MWP Act:
I. The claim money shall be paid to the trustees.
II. The policy cannot be surrendered and neither nomination nor assignment is allowed.
III. If the policyholder does not appoint a special trustee to receive and administer the
benefits under the policy, the sum secured under the policy becomes payable to the
official trustee of the State in which the office at which the insurance was effected is
situated.
Key Man insurance: It can be described as an insurance policy taken out by a business to
compensate that business for financial losses that would arise from the death or extended
incapacity of an important member of the business.
Keyman is a term insurance policy where the sum assured is linked to the profitability of the
company rather than the Key person’s own income. The premium is paid by the company. This is
a tax efficient as the entire premium is treated as business expense. In case the key person dies,
the benefit is paid to the company. Unlike individual insurance policies, the death benefit in
keyman insurance is taxed as income.
a) Who can be a KEYMAN? A key person can be anyone directly associated with the
business whose loss can cause financial strain to the business. For example, the person
could be a director of the company, a partner, a key sales person, key project manager, or
someone with specific skills or knowledge which is especially valuable to the company.
Mortgage Redemption Insurance (MRI): It is an insurance policy that provides financial
protection for home loan borrowers. It is basically a decreasing term life insurance policy taken
by a mortgager to repay the balance on a mortgage loan if he/she dies before its full repayment.
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PRICING AND VALUATION OF LIFE INSURANCE – 11
 Premium : Price for insurance

a. Net Premium: The interest earned is also considered for the premium calculation.
b. Net Premium = Premium – Interest earning
c. Higher the interest rate assumed, lower the premium.

1. Surplus = Assets – Liabilities

2. Bonus: Bonus is paid as an addition to the basic benefit payable under a contract.
Types of Reversionary bonus:
 Simple Reversionary Bonus: Insurer declares bonus on the sum assured.
 Compound Bonus: Bonus will be given on bonus declared in earlier years.
 Terminal Bonus: as incentives to the insured to continue with the company for long
term. It increases as the duration increases.

DOCUMENTATION – PROPOSAL STAGE – 12

a) Proposal stage documentation:
Prospectus – It is a formal legal document used by insurer that provides details about the
product. It states the terms and conditions, Scope of benefits – guaranteed- non-guaranteed,
entitlements, exception.
Proposal form – it is a form to be filled by the proposer for giving all material required by
insurer in order to decide catheter the risk of the proposer to be acetated or rejected.
Agent Report – Agent is primary underwriter. All material facts and particulars about the
proposer such as health, habits, occupation, income, family etc.
Medical Examiners report – the medical examiner’s report is required typically when the
proposal cannot be considered under normal condition i.e. Sum proposed is high or age is high
or there are certain characteristics which call for examination and report by medical examiner.
Moral hazard report - it is the likelihood that a client’s behavior might change as report of
purchasing a life insurance policy and such a change would increase the chance of loss.

i. Valid Age proofs:

Standard age proofs . School or college certificate. Passport, PAN card, Service
Register, Certificate of Baptism, Certified extract from a family bible if it contains the date of
birth, Identity card in case of defense personnel, Marriage certificate issued by a Roman
Catholic Church
Non standard age proof
-Horoscope -Ration Card -An affidavit by way of self declaration -Certificate from village
panchayat
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Anti –Money Laundering (AML) – the prevention of money laundering is the process of bringing
illegal money into economy by hiding its illegal origin. The act to curtail was paned in 2002 and
person found guilty is perishable for 3-7 years imprisonment and fine unto 5 lakhs.
Know Your Customer (KYC) – It is the process used to verify the identity of their clients. The
objective is to prevent financial institutions from being used by criminal elements for money
laundering activities.
KYC Procedure: Photographs Age Proof
 Proof of Address – driving license, passport, telephone bill, electricity bill, bank passbook
etc.
 Proof of Identity – driving license, passport, voter ID card, PAN card etc.
 Income Proof Documents in case of high value transactions
DOCUMENTATION – POLICY CONDITION -13
First Premium Receipt (FPR):
An insurance contract commences when the life insurance company issues a FPR. The FPR is the
evidence that the policy contract has begun.
Policy Document:
It is the evidence of the contract between the assured and the insurance company.
It has to be signed by competent authority and stamped according to Indian Stamp Act.
Policy Document Components:
Policy Schedule :- It contains Policy owner’s name and address, DOB, Age, Plan and Term,
Whether the policy is Par/Non Par, Mode of premium, Policy No., DOC, DOM, SA, Premium paid,
nominee, details of riders etc.
Standard Provisions:- These are normally present in all LI contracts. These provisions define the
rights and privileges and other conditions viz; days of grace, non-forfeiture in case of Lapse.
Specific Policy Provisions:- These may be printed on the face of the document or inserted
separately in the form of an attachment.
E.g. A clause precluding death due to pregnancy for a lady who is expecting at the time of
writing the contract

DOCUMENTATION – POLICY CONDITION –II --- 14

Grace Period: The “Grace Period” Clause grants the policyholder an additional period of time to
pay the premium after it has become due.
The Standard length of the grace period is one month or 31 days computed from next day after
due date.
The premium however remains due and if the policyholder dies during this period, the insurer
may deduct the premium from the death benefit.
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Lapse: If the policy premium has not been paid even during days of grace, the policy is deemed
to be lapsed.
Reinstatement / Revival: Reinstatement is the process by which a life insurance company puts
back into force a policy that has either been terminated because of non-payment of premiums or
has been continued under one of the non-forfeiture provisions.
Conditions of Policy Revival:
 Payment of outstanding premium with interest. - Fee for reinstatement.
 Proof of continued good health and income. -No increase in Risk Cover
 Within time frame – in India within 5 years from the date of lapse
 Payment of outstanding loan. -Fresh medical examination may be
required if SA is large.
Revival is more often advantageous because buying a new policy would call for a higher premium
based on age on the date of revival.
1. Policy Revival Measures:

Ordinary Revival: Involves payment of arrears of premium with interest. When the policy
has acquired surrender value.
Non-Forfeiture Provision: If premiums have been paid for 3 consecutive years, the accrued
Surrender value will be paid.
Policy Loan: When a policy acquires a cash value, policyholder can borrow money (loan) while
keeping the insurance alive. It is usually limited to a percentage of Surrender Value (say 90%)
 The policy has to be assigned in favor of insurer. Insurers charge interest on policy loans
5 . Nomination:It is the process of life insured proposing the name of the person (s) to whom the
sum insured should be paid by the insurance company after his/her death.
a. A nominee does not have any right to whole (or part) of the claim.
b. For an insurance policy nomination is allowed under Section 39 of the insurance Act 1938.
Provisions of Section 39: Nomination can be made when the policy is bought or thereafter
 Assignment cancels nomination.
 Addition, change or cancellation of nomination is allowed
 Where the nominee is minor, an Appointee needs to be appointed by policy holder
6 . Assignment: Transfer the rights of the property (Policy)
Conditional Assignment: provides that the policy shall revert back to the life assured on his or her
surviving the date of maturity or on death of assignee.
Absolute Assignment: Provides that rights, title and interest of the assignor in the policy are
transferred to the assignee without reversion.

8. On assignment, nomination is cancelled, except when assignment is made to insurance

company for a policy loan
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9. Basis of difference Nomination Assignment
What is Nomination Nomination is process of Assignment is the process of
or Assignment appointment of a person to transferring the title of the insurance
receive the death claim policy to another person or institution
In case of minor: In case the nominee is a minor, In case the assignee is a minor, a
appointee has to be appointed guardian has to be appointed.
Duplicate Policy:
 If the insured person loses the original life insurance policy document, the insurance
company will issue a duplicate policy without making any changes to the contract.
 The claim may be settled on furnishing an indemnity bond with or without surety.

UNDERWRITING – 15
Underwriting :- basic concepts The purpose of insurers to decide whether the proposal to be
accepted or rejected depending from the proposal information and insurers requirements and
procedure is known as underwriting.
Underwriting purpose – To prevent anti selection or selection against the insurer
To classify risks and ensure equity among risks. Equity among risks here refers to
those applicants who are exposed to similar degree of risk and are to be
grouped together and charged same premium.

Risk Classification –
Standard lives – those applicants / proposers whose mortality rate is considered to be as
per standard requirements
Preferred lives – those applicants/proposers whose mortality rate is significantly low and
hence can be charged lower premium.
Sub-standard lives – those applicants/ proposers whose mortality rate is higher than
standard lives but insurable. They are charged extra premium.
Declined lives – those applicants/ proposers whose mortality rate is very significantly high
and cannot be insured at affordable cost.

i) Underwriting decisions – the various options available to underwriter besides accepting or

rejecting the proposal are as follows:
Acceptance at ordinary rate (OR) – it is the most common decision where in the proposal
is accepted at same premium as it would apply for standard lives.
Acceptance at extra rate (ER) – it involves charging extra premium for sub-standard lives.
Acceptance with lien – it is kind of hold on sum assured amount. It implies if a policy is
accepted under lien and if the proposer dies within lien period then the nominee is
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rd
entitled to receive decreased sum assured. Lien is applicable normally for 1/3 period of
the total period.
a) Acceptance with restrictive clause – for certain kind of hazards or restrictive clause is
applied; if tomorrow claim arises due to such clause then full sum assured is not
payable.
b) Decline or postpone – if the proposer does not fit in any of the above conditions i.e.
They are very adverse and there is little chance of improvement then such cases are
declined or decision on them is postponed for certain time period.

PAYMENT UNDER A LIFE INSURANCE POLICY – 16

Claims: A claim is a demand that the insurer should make good the promise specified in the
contract.
A) Types of claims and claim procedure:-
1) Survival claim – claims payable even when the life insured is alive.
2) Death claim – claims payable on the death of the life assured.
A Claim event is said to have occurred when
 For Survival claim the vent has to be occurred as per stipulated conditions.
 Maturity claim and money back claims are given based on determined dates.
 Surrender value are claims to be given based on decision taken by insured.
 Critical illness claims are processed based on medical and other records provided.
Payments to be done during the policy term:-
i. Survival benefits payment – payments made at regular intervals by insurer at specified
time during the policy term.
ii. Maturity claim – a payment done by insurer at the end of the policy term, if the insured
survives the entire term of the policy. The insurance contract comes to an end after
maturity claim is paid.
iii. Death claim – if the insured expires during the term of the policy, accidentally or
otherwise, then the insurer pays the sum assured, etc. to nominee; assignee or legal heir.
Such payments are known as death claim. Contract comes to an end. Death claim can be
 Early Death claim – claim that arises within 3yrs from start of policy
 Non-early Death claim – claim that arises after 3yrs from start of policy
Forms to be submitted by nominee; assignee or legal heir on death are claim form; certificate of
burial or cremation; treating physicians certificate; hospital certificate; employers certificate;
certified court copies of police reports in case of accidental death; death certificate issued by
municipal authority.
B) Presumption of Death – the Indian Evidence act 1872 deals with presumption of death;
under this act if an individual has not been heard off or seen for 7yrs then they are
presumed to be dead. It is necessary that premiums should be paid till the court decrees
presumption of death.
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C) Claims procedure for Life insurance Policy –
 A claim is to be paid or be disputed giving all relevant reasons within 30 days
 In case of any dispute over the claim, it shall initiate and complete within 6 months
from the time lodging the claim
 Claim is ready for payment but cannot be done due to lack of proper identification,
the life insurer shall hold such amount and shall earn interest as per schedule banks
saving accounts rate (effective from 30 days following the submission of all papers
and information).
 On delay of payment of claim on its completion would earn an interest of 2% above
the prevalent rate of interest.

HEALTH INSURANCE CONCEPTS – 17-21

Types of Healthcare:
a.Primary Health Care: Primary health care refers to the services offered by the doctors, nurses
and other small clinics which are contacted first by the patient for any sickness, that is to say that
primary healthcare provider is the first point of contact for all patients within a health system.
Primary health care centre’s are set up both by Government and private players.
Government primary health care centre’s are established depending upon the population size
and are present right up to the village level in some form or the other.
b.Secondary Healthcare: Secondary healthcare refers to the healthcare services provided by
medical specialists and other professionals who generally do not have first contact with patient.
Most of the times, the patients are referred to the secondary care by primary health care
providers / primary physician.

c.Tertiary Healthcare: Tertiary healthcare is specialized consultative healthcare, usually for

inpatients and on referral from primary/ secondary care providers. e.g. Oncology (Cancer
treatment), Organ Transplant facilities, High risk pregnancy specialists etc.
Evolution of Health Insurance in India
a) Employee’s State Insurance Scheme:
b) Central Government Health Scheme:
c) Commercial health insurance:
G. Health Insurance Market:
A. Infrastructure:
1. Public Health Centre (PHC)
a. It operates in National level, State level, District level and Village level.
b. Anganwadi Workers: (1 of every 1000 population)
>For nutrition Supplementation programme and Integrated Child Development Service
Scheme
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c. The Trained Birth Attendants (TBA) and the Village Health guides (an earlier scheme of
health departments in states).
d. ASHA (Accredited Social Health Activist) volunteers, selected by the community under the
NRHM (National Rural Health Mission) programme.
Sub-centre’s: Established: 5000 population (Rural), 3000 population (Hilly, Tribal and backward
areas). One female worker and one male worker
Primary Health Centre’s: Referral units for about six sub-centre’s
 30,000 Population (rural), 20000 population (Hilly, Tribal, backward)
 Provides Outpatient services. 4-6 beds. 14 para medical workers. One medical officer
Community health centres: Referral units for 4 Primary health centre’s
 For 1 Lakh population. 30 beds
 One operation theatre. X Ray machine, Labor room and Laboratory
 Four specialists: One surgeon, Physician, Gynecologist, a pediatrician
Rural Hospitals have also been set up and includes the sub-district hospitals called as the sub-
divisional / Taluk hospitals / Specialty hospitals (estimated to be about 2000 in the country)
Specialty and teaching hospitals are fewer and these include the medical colleges (about 300 in
number presently) and other tertiary referral centres. These are mostly in district towns and
urban areas but some of them provide very specialized and advanced medical services.

D.Others Important Organizations:

-Insurance Regulatory and Development Authority of India (IRDAI). -General Insurance and Life
Insurance Councils. - Insurance Information Bureau of India.
Main features of Mediclaim policy:
1. Inpatient Hospitalization expenses: All expenses may not be payable and most products
define the expenses covered which normally include:
i.Room, boarding and nursing expenses as provided by the hospital/nursing home. This
includes nursing care, RMO charges, IV fluids / blood transfusion / injection administration
charges and similar expenses
ii.Intensive Care Unit (ICU) expenses. iii.Surgeon, anesthetist, medical practitioner,
consultants, specialists fees. iv.Medicine and drugs
v.Dialysis,chemotherapy, radiotherapy
vi.Anesthetic, blood, oxygen, operation theatre charges, surgical appliances
vii.Cost of prosthetic devices implanted during surgical procedure like pacemaker, orthopedic
implants, infra cardiac valve replacements, vascular stents
viii.Relevant laboratory and medical test
ix.Hospitalization expenses (excluding cost of organ) incurred on donor in respect or organ
transplant to the insured. Daycare procedures (Within 24 hrs of hospitalization) – Eye
surgery, Chemotherapy, dialysis
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2. Pre and Post hospitalization expenses: Pre Hospitalization expenses: Pre hospitalization
expenses could be in the form of tests, medicine , doctors fees etc. Such expenses relevant
and pertaining to the hospitalization are covered under the health policies
Post Hospitalization expenses: After stay in the hospital, in most cases there would be
expenses related to recovery and follow-up
a) Domiciliary Hospitalization This benefit is not commonly used by policyholders, 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
This cover usually carries an excess clause of three to five days meaning that treatment costs
for the first three to five days have to be borne by the insured
The cover also excludes domiciliary treatments for certain chronic or common ailments such
as Asthma, Bronchitis, Chronic Nephritis and Nephritic Syndrome, Diarrhea and all types of
Dysenteries including Gastroenteritis, Diabetes Mellitus Epilepsy, Hypertension, Influenza,
Cough and Cold, Fevers.
c)Common Exclusions:
1. Pre-existing diseases: “Any condition, ailment or injury or related condition(s) for which you
had signs or symptoms, and / or were diagnosed, and/or received medical advice/treatment
within 48 months prior to the first policy issued by the insurer”
Exclusions for Pre-existing disease – 48 months from the day of inception of the policy
Waiting Period: Depending on the product, waiting periods of one / two / four years apply for
diasease such as
2.Critical Illness Policy: 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 sold: As a standalone policy or
As an add-on cover to a few health policies or As an add-on cover in some life insurance
policies
Bhavishya Arogya Policy: -Introduced in the year 1990 -Age: 25 years to 55 years -This
scheme provides assignment. -This policy does not have the exclusions of pre-existing diseases

TPA -Third Party administrators: Service intermediaries known as Third Party Administrators,
who process health insurance claims.
Current Procedure Terminology (CPT)codes capture the procedures performed to treat the
illness.