IRDAI IC38 (Insurance Agent) Health Insurance Syllabus

Why does the principle of indemnity apply to Mediclaim but not to defined-benefit health plans?

Mediclaim reimburses actual expenses, so indemnity (no profit from loss) applies. Defined-benefit (and personal accident) plans pay a pre-agreed lump sum on a defined event regardless of actual cost; they are 'benefit policies' to which the strict principle of indemnity does not apply.

What is an 'individual' health insurance cover?

A policy where each insured person has their own separate sum insured. If a family is covered, every member has an independent sum insured that can be fully utilised by that member alone, irrespective of claims by others.

What is a 'family floater' health insurance policy?

A single policy covering the whole family under one shared sum insured that 'floats' over all insured members. Any one or more members can claim up to the total sum insured in a year. It is usually cheaper than separate individual covers.

State one key advantage and one disadvantage of a family floater versus individual covers.

Advantage: lower premium for the same total cover since one shared sum insured is used. Disadvantage: if one member has a large claim, the floater can be exhausted, leaving little for others; premium is usually based on the eldest member's age.

What is a 'defined-benefit' health insurance product? Give examples.

A product that pays a fixed, pre-agreed lump sum on the occurrence of a defined event, regardless of actual medical cost. Examples: critical illness policies (lump sum on diagnosis of a listed illness) and hospital cash/daily cash plans (fixed amount per day of hospitalisation).

How does a critical illness policy work?

It is a defined-benefit cover that pays the full sum insured as a lump sum on the first diagnosis of any listed critical illness (e.g. cancer, heart attack, stroke, kidney failure), usually after a survival period (commonly 30 days) and a waiting period. Payment is independent of hospitalisation costs.

What is a 'hospital cash' (daily cash benefit) policy?

A defined-benefit plan that pays a fixed cash amount for each day the insured is hospitalised, regardless of actual expenses. It supplements an indemnity policy by covering incidental costs and loss of income during hospital stay.

What special features do IRDAI norms require for senior citizen health policies?

Insurers offering senior citizen health policies must clearly disclose pricing rationale, cannot deny entry on age alone, must provide a separate grievance channel, and any co-payment or sub-limits must be transparently stated. Lifelong renewability also applies.

What is a disease-specific health policy? Give an example.

A policy designed to cover a particular disease or condition, such as a dedicated cancer care plan, a diabetes/hypertension-specific cover (often with day-one or reduced waiting for that condition), or Corona Kavach for COVID-19.

Name two major government-sponsored health insurance schemes in India.

Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY), providing cashless cover of Rs 5 lakh per family per year to poor/vulnerable families, and the earlier Rashtriya Swasthya Bima Yojana (RSBY) for below-poverty-line families.

What cover does Ayushman Bharat PM-JAY provide?

It provides health cover of up to Rs 5 lakh per eligible family per year on a family-floater basis for secondary and tertiary hospitalisation, cashless and paperless at empanelled public and private hospitals, targeting the bottom economically weaker households.

What is group health insurance and who typically takes it?

A single master policy covering a group of people under one contract, typically taken by an employer for employees, or by associations/banks for members. It offers lower per-head premium, often covers pre-existing diseases from day one, and may not require individual medical tests.

How does group health cover usually differ from an individual retail policy on pre-existing diseases?

Group (employer) policies often waive the pre-existing disease waiting period and initial waiting period, covering PEDs from day one, whereas individual retail policies impose initial, specific-disease and PED waiting periods.

What is the purpose of underwriting in health insurance?

To assess the health risk presented by a proposer, decide whether to accept the risk, and on what terms - standard rates, loading (extra premium), exclusions, sub-limits, or rejection - so that premium charged is commensurate with the level of risk.

What information sources do health underwriters use to assess risk?

The proposal form (declared age, health history, habits), the agent's confidential report, pre-policy medical examination reports, past medical records, and family medical history. These help classify the risk as standard, sub-standard, or declinable.

What is the proposal form and why is it central to health underwriting?

The proposal form is the basic document in which the proposer discloses personal, health, lifestyle and financial details. Being a contract of utmost good faith (uberrima fides), all material facts must be disclosed truthfully; non-disclosure can void the policy or lead to claim rejection.

How may an underwriter accept a health proposal on modified terms?

By applying a premium loading (extra charge for higher risk), imposing a permanent exclusion for a specific condition, adding a co-payment or sub-limit, deferring/postponing acceptance, or, in standard cases, accepting at ordinary rates. Severe risks may be declined.

What is a Third Party Administrator (TPA) in health insurance?

An IRDAI-licensed intermediary appointed by an insurer to provide health claim services - issuing health cards, maintaining the hospital network, processing and settling claims, and facilitating cashless treatment - acting as a link between the insurer, insured and hospitals.

List the main functions performed by a TPA.

Enrolment and issuing ID/health cards, maintaining a network of empanelled hospitals, providing 24-hour helpline, pre-authorisation for cashless claims, scrutiny and processing of claim documents, and arranging settlement. The insurer, however, remains liable for the claim decision and payment.

Does a TPA decide whether to accept or reject a claim?

No. The TPA processes and recommends, but the final decision to admit, repudiate or pay a claim rests with the insurer. The TPA also cannot reject a claim on its own; it facilitates the service while the insurer bears the liability.

What is a 'cashless' claim in health insurance?

A claim where the insured receives treatment at a network (empanelled) hospital without paying the covered amount upfront; the insurer/TPA settles the bill directly with the hospital after pre-authorisation. The insured pays only non-covered items, deductibles or co-pay.

What is a 'reimbursement' claim and when is it used?

A claim where the insured first pays the hospital bill, then submits original documents (bills, discharge summary, reports) to the insurer/TPA to get reimbursed up to the sum insured. It is used for treatment at non-network hospitals or where cashless was not availed.

What is 'pre-authorisation' in a cashless claim?

The process where the network hospital, before/at admission, sends the patient's details and estimated cost to the TPA/insurer, who approves the cashless facility and the sanctioned amount in advance, enabling treatment without upfront payment by the insured.

Compare cashless and reimbursement claims on two key points.

Cashless: only at network hospitals, no/minimal upfront payment, insurer pays hospital directly, needs pre-authorisation. Reimbursement: at any hospital (especially non-network), insured pays first and claims later with original documents, more paperwork and delay for the insured.

What is portability in health insurance?

The right of a policyholder to transfer their health policy from one insurer to another (or one plan to another of the same insurer) at renewal, while retaining accrued continuity benefits such as credit for waiting periods already served for pre-existing diseases and time-bound exclusions.

What is the key continuity benefit preserved on porting a health policy?

Credit for the waiting periods (initial, specific-disease and pre-existing disease) already completed under the previous policy is carried over to the new insurer, so the policyholder does not have to serve those waiting periods afresh, up to the previous sum insured.

How far in advance must a policyholder apply for portability, per IRDAI norms?

The policyholder must apply to the new insurer at least 45 days before (and not more than 60 days before) the renewal date of the existing policy. The application is made in the prescribed portability form.

Distinguish 'portability' from 'migration' of health policies.

Portability is moving the policy from one insurer to another while keeping continuity benefits. Migration is moving from one plan/product to another within the same insurer (e.g. group to individual, or an old plan to a new one), also retaining accrued continuity benefits.

What tax benefit is available on health insurance premiums in India, and under which section?

Under Section 80D of the Income Tax Act, premiums paid for health insurance (and preventive health check-ups) qualify for deduction from taxable income. The deduction is for premiums paid by non-cash modes for self, spouse, dependent children and parents.

State the deduction limits under Section 80D for health insurance premiums.

Up to Rs 25,000 for self, spouse and children; an additional Rs 25,000 for parents (Rs 50,000 if parents are senior citizens). If the proposer is also a senior citizen, the self/family limit rises to Rs 50,000. Preventive check-up costs are allowed within these limits (Rs 5,000 cap).