Page 215 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes 6. Issue of Photo Card by Third Party Administrator (TPA): After issuing the policy
documents, the TPA will issue the photo identity card for each person which will help to
get the treatment in the hospital on cashless basis. TPA is licensed by the IRDA who will
settle the health insurance claims on behalf of the insurance companies.

TPAs have empanelled various hospitals on all India basis who will provide the health
treatment on cashless basis meaning thereby, that the policyholder will not pay any
amount to the hospital and the hospital will get the payment directly from the TPA up to
the sum insured of a person. If some insured is not sufficient to meet the bill of the hospital
then the excess amount will be paid by the policyholder.
Following are the miscellaneous benefits of health insurance policy:

1. Age Limit: This insurance is available to persons between the ages of 5 years to 80 years.
Children between the ages of 3 months to 5 years can be covered provided one or both
parents are covered concurrently.
2. Family Discount: This discount of 10% in the total premium is allowed to a family
comprising the insured and any one or more of the following:
Spouse

Dependent children (i.e. legitimate or legally adopted)
Dependent parents
3. Cumulative Bonus: The sum insured is increased by certain percentage, say 5% for each
claim from the year of insurance subject to a maximum accumulation of 10 years. In the
event of a claim, the increased percentage will be reduced to a certain percentage; say the
double of the bonus rate by 10% of the sum insured at the next renewal but the basic sum
insured will remain the same.

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Caution Some companies do not allow this cumulative bonus but instead of this allow a
discount in the premium on the next renewal if no claim is reported during the currency
of the previous policy.
4. Cost of Health Check-up: The insured shall be entitled to reimbursement of medical
check-up, generally once in every four underwriting years, subject to no claim preferred
during this period. The cost shall not exceed 1% of the average sum insured during the
block of four years.
5. Extension of Cover: The health cover is available for Indian Territories but it can be
extended to Nepal and Bhutan with prior permission.
Self Assessment

Fill in the blanks:
6. The proposal form will contain the ……………………………….. information of the person.
7. A person should give a ……………………………….. of his good health.
8. The premium is paid through …………………………………… to get the tax benefit under
Income Tax Act, 1961.

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