Page 117 - Ebook health insurance IC27

Sashi Publications

Important Points to Remember

Health insurance contract

 Insurance is a contractual agreement between the insurer and the policyholder.
 The insured pays the premium as consideration and the insurer promises to indemnify

the insured in case of any contingent loss.
 In order to be valid and enforceable the contract must be legal and must not be

against the public policy.
 Insured peril must be random and accidental
 Minor children's cannot enter into contracts
 Contracts for minor can be entered into by the parents
 Persons of unsound mind and persons who have been convicted for criminal offences

are not competent to contract
 The word contract is derived from the word "contrahere" which means to draw

together and it stresses the importance of mutuality in the use of the particle or
subject more than the word agreement.
 In health insurance contract the insurer agrees to pay the insured, medical expenses
incurred for treatment of any disease subject to the limit of sum insured.
 The consideration i.e. the premium is determined on the basis of age, health status
of the policyholder

Insurance policy is evidence of contract and it must specify

 The risk covered
 Perils covered
 Amount of liability

Website : www.bimabazaar.com, PH: 033 22184184/40078428 121