Page 24 - Ebook health insurance IC27

The Insurance Times

various cost containment mechanisms to minimise moral hazard, which are
discussed in a subsequent section.

Q3. What is the need of health insurance ?
Ans. In a country like India, where maximum medical expenses are borne by individuals

themselves , planning for health expenditure needs to be inculcated. Unpredictable
major illnesses may require substantial amounts of money at a short notice. Such
illnesses are, in fact, estimated to be impoverishing India's population every year.

Illness, in fact, has the potential forcatastrophic effects on thefinances of individuals
and their families, and hence the importance of planning for health needs .

Health Insurance products available in the Indian market have been dominated by
hospitalization products, which protect individuals from the high expenditure in the
event of an hospitalization. With the ever- increasing costs of healthcare, newer
and more expensive health technology and newer generations of pharmaceuticals,
bearing the financial burden of a major health episode is becoming increasingly
difficult for the uninsured, even the relatively well-off.

Thus, health insurance is not only important for financial access to healthcare, but
also for preservation of savings, which may otherwise be wiped out. The cashless
system of providing hospitalization cover has immense value in terms of personal

2 8 Guide for Health Insurance