Page 150 - Ebook health insurance IC27

The Insurance Times

(iv) Benign brain tumor
(v) Motor neuron disease and
(vi) Paralysis/ Paraplegia

Q9. What is the rationale of offering benefit products ? List out some of the
products.

Ans. Benefit products are being increasingly offered by Insurance companies active
in India. They offer a lump sum payout irrespective of the expenses incurred.
Often insured has to incur prelpost hospitalisation expenses which are not
covered by the policy. Similarly some expenses are not paid due to many clauses
in the policy. So, in order to help the insureds to take care of all expenses benifit
policies are issued For e.g,
(i) Hospitalization Daily Cash Allowance - or its variants allowing higher cash
allowance for accidents or ICU stay
(ii) Convalescence or Recuperation Benefit (in case of a continuous stretch of
hospitalization.
(iii) Surgical benefit provide a pre-determined cash benefit for undergoing the
covered surgeries, regardless of actual expenses.

Q10. Explain the principles of contribution as applicable in health insurance.
Ans. The principle of contribution is only applicable to indemnity policies and not to the

benefit type covers. Thus in case of Indemnity policies, if a person holds two
policies from two different policies, the claim can be paid in the same proportion
as the ratio of the sum assureds are. So he gets the claim paid , but as proportionate
payment by each company.

Thus, a person may hold two policies of benefit type from two different companies,
and his payable amount from each insurer, do not get reduced, but rather gets
added up.

154 Guide for Health Insurance