Page 75 - Ebook health insurance IC27

Sashi Publications

Mortality - The ratio of the total number of deaths to the total population. It can also
refer to the rate of death from a particular disease. e.g. AIDS has almost 100%
mortality.
It refers to a fatal outcome or, in one word, death. The word "mortality" is derived
from "mortal" which came from the Latin "mors" (death).

Morbidity Mortality
It refers to illness or sickness It refers to rate of death
It comes before mortality It comes after morbidity
Premium is higher for morbidity Premium is lesser
Chances of losses are continuous A person can die only once so
since a person may fall sick number of times chances are less

Need for underwriting

 Underwriting is the process of selection which is based upon characteristics of a
group or individual.

 Acceptance of risk by the insurer must be done with fairness and on equitable basis.
 Classification ofrisk is done through morbidity chart and higher the morbidity, higher

is the premium.
 Morbidity comes before mortality, ie. usually a person gets sick(morbidity) before

dying(mortality).
 Underwriting norms are more stringent for morbidity than mortality.
 A person who is sick has more chances of getting hospitalised than a person who dies.
 In health insurance more weightage is given on medical findings rather than financial

underwriting.
 Underwriting is of paramount importance in health insurance.

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