Page 126 - Ebook health insurance IC27

The Insurance Times

Immediate need plans:

 These plans are similar to annuity availed in pension policies.
 The insured can purchase plan for long-term care on payment of a lump sum amount.
 The severity of disability decides the quantum of benefit.
 More benefit if provided is disability is more since the expected survival period

requiring long-term care reduces with more disability.
 This product is at a very early stage of development. Since enough loss experience

is not available it is difficult to price the product.
 If the product is not priced properly the insurer may have to incur huge claims and

the portfolio may be at a loss.

Health savings or investment linked plans

 In India health insurance is usually offered as an indemnity plan where the actual
expenses incurred is reimbursed.

 However with the arrival of private players innovative products are being launched
in the market.

 One of the product is hospitalisation indemnity plan cum savings plan. In this plan
the premium is split into risk premium and investment amount. A portion is utilised
for risks premium and the balance is used as investment.

 The amount utilised as investment may also be utilised by the policyholder for any
treatment expenses in future.

 Internationally these types of products are known as health savings accounts.
 The usual indemnity plans do not offer any benefit after the end of the period and

many times policyholders regard it as wastage of money since there is no return.
However the added advantage in health savings account ensures that some amount
is deposited as investment in the account of policyholder.

130 Guide for Health Insurance