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Health Insurance

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Health insurance is a form of insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. One of the major reasons why Health Insurance is becoming admired in India is the swelling cost of medical treatment today, which is beyond the reach of the common man in India. Health insurance policies are annual contracts and are subject to renewal by the same or any other insurer transacting general insurance business, on the same or fresh terms and conditions depending on the claims experience under a particular policy.

Health insurance works by estimating the overall risk of healthcare expenses and developing a routine finance structure (like a monthly premium or an annual payment) that will ensure that money is available to pay for the healthcare benefits specified in the insurance agreement. Health insurance claims are settled by the authorities constituted for the said purposes under a license granted by the Insurance Regulatory and Development Authority (IRDA). These authorities are called the ‘Third Party Administrators’ (TPAs).

The health insurance has so far not gained that much popularity among the public. However, the rising cost in the medical treatment and the change in the social pattern of life are leading to a lot many serious illnesses; this branch of insurance is slowly gaining importance. Some of the state governments are taking positive steps to cover all their employees under the health insurance. It has almost become mandatory for the corporates to cover their employees under the health insurance scheme. In each case, the covered groups or individuals pay premiums or taxes to help protect themselves from high or unexpected healthcare expenses.

The government of India has, in coordination with one of the public sector companies, introduced a health insurance scheme for the families below poverty line called, ‘Universal Health Insurance Policy’, in South India and the policy was issued by United India Insurance Company, which has its registered office in Chennai. The premium, which was subsidized by the government and the issuance of policy and settlement of claims were managed by the insurance ceamompany mentioned above. The other three govt. companies were co-insurers with the principal insurer.

Similarly, LIC of India introduced a policy called ‘Varishta Bima Yojana’, which was a pension scheme for the employees of LIC, who were above 60 years of age, where the interested persons had to deposit around Rs. 2,60,000 and they would be entitled to receive a sum of Rs.2000 monthly.

In addition to the Mediclaim policies, the companies also grant ‘Personal Accident Policies’ for individuals as also a group of persons. These policies grant relief to the insured when he/she meets with an accident and suffers death or bodily injuries in an accident. The cover would vary from 24 h cover or for  limited hours cover. The compensation payable is predetermined and the same would be paid to the insured/or his/her legal representatives in the event of death or injuries as the case may be. The amount payable in injury cases would depend on the severity of the injuries and the extent of disablement suffered.

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Written by: healthplus24.com team

Date last updated: February 02, 2015

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