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The Insurance Times

incurred when they are in need of long - term care. It is a new concept and is
still evolving in developed markets. They can be classified based on the method
of funding :
(i) Pre-funded plans - Here the insured will pay the premium when the insured

is healthy. The premium then can be for a certain period or for life time. The
benefit payment is dependent on claim definition. The claim trigger may be
defined based on impact on Activities of Daily Living or more restrictive the
definition, the lesser the premium, as there is lesser likelihood of claim.
(ii) Immediate needs plans - These plans are purchased by a lump sum payment
when the insured is requiring Long term care. The severity of disability will
decide the quantum of benefit. The more the disability, more the benefit, as
the expected survival period requiring long term care is lesser. This is a new
product concept. The market for this kind of product is gradually increasing
in developed countries. In India, the market for this product is yet to be
developed. However, with development of nuclearfamilies, changing culture,
and developing economy, the product will soon find market in India.

Q13. What are the benefits of health savings or investment linked plans ?
Ans. Health Insurancein India is mostly pure risk product without any investment returns.

Recently, some Life Insurance companies have launched Unit Linked Health
Insurance plans. In this plan, the total premium is split up into risk premium and
investment amount.

Whiletherisk premium is allocated for the health insurancecoverage, theinvestment
amount is diverted for unit linked finds which can pay for future health costs or for
costs like OPD, not covered in the risk component. The products may also offer
other benefits like Hospitalization allowances and Critical Illness benefit.

156 Guide for Health Insurance