Health Insurance : Myths and Facts

Health Insurance: Myths & Facts

All of us know very well about the importance of health insurance. Today, everyone realize the benefit and need of having health insurance. For sales points of view it is very easy product which can be offer to the clients by the non life insurer. I have also written many blogs about it. Yesterday, I came across very useful information in the news paper which I want to share with all of you. A very well known insurer called ICICI Lombard has conducted the survey about health insurance. According to this survey that people have many misconceptions about health insurance which we will be discuss in today’s blog.

Myth1:

52% people believe that health insurance policies settle the claim only in case of hospitalization.

Reality:

9 out of 22 non life insurance companies offer OPD benefits, including dental treatment, diagnostic test expenses, vaccinations, hearing aid, eye check up, spectacles and preventive health care services.

Myth2:

27% people said I don’t need health insurance if I am fit.

Reality:

Many illnesses like dengue, malaria, food poising and critical illness can happen in healthy people due to hectic life style and pollution. Health insurance also covers injuries due to accident or violence.

Myth3:

29% people said that they have group health cover. So they don’t need a separate health insurance policy.

Reality:

Due to increasing medical cost day by day, group cover may not be enough in case of medical treatment. In case of job loss, you will need the cover. The group health insurance policies have some defined limits and constraint.

Myth4:

49% people was not sure in survey whether they can get health cover or not as they smoke or consume alcohol.

Reality:

Insurance companies offer health insurance to these types of people. In these cases loading increase the premium can be higher due to high risky habits.

Myth5:

26% people do not intend to cover their family as they think that only earning member need the health insurance cover.

Reality:

Unlike life insurance, health insurance should cover the entire family including children and parents of the customer.

Myth6:

Pre- existing diseases will be covered after waiting period so no need to declare in the proposal form.

Reality:

As per IRDA guidelines, any ailment not declared by a customer is considered an un-disclosed pre existing disease and it leads to claim rejection.

If you want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for seminar in your city just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

www.artofinvest.com

Insurance Sector Update - November 2013

Insurance Update – November, 2013

I am starting for now onward to simple update on insurance industry time to time. Insurance is very vital and critical part of any financial plan. It is our duty as an advisor and planner to inform our readers to update about this industry. A lot of regulatory activity is going on and companies come with new customized product. Every investor must know about this. Some recent update as given below:

• According to FICCI report, General insurance industry may touch gross written premium (GWP) 3 lakh crore by 2025 with a conservative growth rate of 13% CAGR. According to report that increased health insurance awareness would increase the opportunities in this sector.

• National Disaster Management Authority suggested that insurance should be mandatory for residential properties, malls, theaters, hospitals and hotels. It also be recommended that it should be applies on all urban property tax payers.

• Insurance regulator IRDA has increased investment limit in various category. Now general insurance companies are allowed to invest upto 1.50% or Rs, 3,500 crore in liquid mutual fund. It is for temporary time and can be reversed at a later stage.

• Life insurance companies now can invest upto 5% in FD schemes of promoter group bank. Earlier the limit was 3%. IRDA has also increased  invest limit to invest in information technology and industrial sector from existing 15% to 20%.
• Reliance life insurance has launched policy revival drive. In this campaign lapse policyholder can revive their lapse insurance policy without any penalty and medical tests subject to conditions. This offer will available till 30^th November, 2013 for all reliance insurance products.

• IRDA wants insures to stop giving high incentives to auto dealers. For pushing motor insurance policies sales, insurers offering high incentives to auto dealers and due to this policy holder are paying unreasonable premium.

• IRDS has also proposed to set up insurance clearing house. For smooth functioning of reinsurance and coinsurance business IRDA want to establish “Insurance Clearing House”. It would be promoted by Indian insurers, reinsurers and the authority.

For more detail and any other query related investment, you can contact me through my email

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

New guidelines for Health Insurance

IRDA has come up with momentous regulations which will change the health insurance industry workings if the draft is implemented without watering it down. TPAs' role will get marginalized and hence they may try to scuttle the implementation in its current form

Insurance Regulatory and Development Authority (IRDA) has finally issued draft health insurance regulations addressing several areas of concern. The draft covers product design, renewability, portability, file and use procedures, protection of policyholders' interest, servicing of health insurance policy, third party administrators (TPA), contract between insurer and hospitals and so on.

The important points in IRDA guidelines are related to following:

• Entry and exit age - All health insurance policies shall provide for entry age at least up to 65 years. All health insurance policies shall not have an exit age for renewal of the policies, once the proposal is accepted, provided the policy is continuously renewed without a break.
• Cumulative bonus to be mentioned in the policy document
• Mediclaim denial grounds to be given in writing
• Reward a favourable claim ratio
• Refund on pre-insurance med check-ups - A proposal resulting into a policy shall reimburse at least 50% of the medical exam cost.
• Separate grievance cell for senior citizens
• Increase in premium must be in writing and must be justified
• Claims independent of multiple fixed benefit policies - The insurer shall make the claim payments independent of payments received under other similar polices.
• If two or more policies are taken by  an insured during a period from one or  more  insurers,  where the  purpose  of  such  policies  is  to  indemnify  the  treatment costs, the insurer shall not apply the contribution clause but the  policyholder shall have an option to chose insurer with whom the claim is to  be settled. In all such cases, the insurer shall be obliged to settle the claim without insisting for contribution clause.
• Insurers  may  provide  coverage  to  non-allopathic  treatments  provided  the treatment has been undergone in a government hospital or in any institute recognized  by  the government.
• Any  product  that  is  being  offered  in  the  market  by  insurance  companies shall not be allowed to be withdrawn  in respect of the existing customers of  the  product,  unless,  the  existing  customers  are  given  an  option  to switch to a similar product under specific written consent.
• Uncomplicated one page customer information sheet to cover key benefits, exclusions and grievance mechanisms.
• Renewal cannot be denied randomly
• Waiting period for pre-existing diseases (PED) be clearly specified
• Claim settlement within 30 days
• Insurer to make direct payment to the hospital and policyholder (not through TPA). Cheques will have to be written by the insurance company and send to hospital (for cashless) and policyholder (for reimbursement). It means that cheques cannot be held by TPAs as a float.
• ID card to have logo of the insurance company. In  case  the  policy  is  renewed,  provisions  to  be  established  by the  insurer  to  ensure  there  shall  not  be  any  need  for  re-issue  of  fresh cards provided there is no change in the details of the policyholder. It means auto-renewal of same ID cards.
• Agreement between the TPA and insurance company to be registered with IRDA
• Seamless transfer of policies services by an existing TPA to the new TPA
• Claim settlement - Specific ground of settlement and denial of claim must be mentioned
• All insurers shall have an agreement directly with the hospitals to establish the list of network providers. The insurer  shall  be  responsible  for  carrying  out  an empanelment  process  of  hospitals  or  health  care  providers  to  provide  cashless facility to the policyholder. The TPA role is effectively marginalised.

Regards,

Arvind Trivedi

Certified Financial Planner