Page 95 - Ebook health insurance IC27

Sashi Publications

individual or a group. Based on the degree of risk represented, the underwriter
then decides whether to accept the risk ( or reject), and then at what price.
Ideally the risks should be accepted with fairness and on equitable basis.

There should not be any prejudice. This classification of risks are mainly done
through the standard morbidity charts whereby every represented risk is quantified,
and premiums are calculated accordingly.

Unlike clinical protocols, insurance risk assessments are based on prognosis. Hence
classification is done based on type of coverage , and the mortality/ morbidity
factor. As mortality comes much after morbidity, the underwriting norms and
guidelines are much tighter for morbidity coverage than mortality.

For e.g, a diabetic individual has a much higher chance of developing a cardiac or
systemic complication requiring hospitalization, than of death. Also such episodes
can happen a number of times during the course of insurance coverage. Therefore
the morbidity premiums are much steeperthan mortality premiums, and can increase
manifold based on degree of risk.

In health insurance, thereis ahigherfocus on medical or healthfindings than financial
underwriting. However, the latter one cannot be ignored as there has to be an
insurable interest and financial underwriting can only prevent adverse selection
and ensure persistency.

Q4. What are the factors which affect morbidity ?
Ans. There are several factors, which affect morbidity and should beconsidered carefully

while assessing risk :
(a) Age - The premiums are charged in accordance to age and degree of risk.

Website : www.bimabazaar.com, PH: 033 22184184/40078428 99