Health and Accident Insurance
Health and Accident Insurance tests indemnity health cover, fixed-benefit plans, personal accident, critical illness and the conditions that turn a billed amount into a payable claim. You must apply waiting periods, pre-existing disease rules, deductibles, co-pay, sublimits and exclusions.
Core rules
- Indemnity health reimburses actual medical costs up to the sum insured; fixed benefit pays a stated amount on a defined event, regardless of actual cost.
- Personal accident covers accidental death, disability and specified expenses; it is not a sickness policy.
- Critical illness pays a lump sum on first diagnosis of a covered condition after the survival period.
- Waiting periods include initial waiting, disease-specific waiting and pre-existing disease waiting.
- Deductible is the first layer paid by the insured; co-pay is a fixed percentage shared on every claim; sublimits cap room rent, ICU or specific procedures.
- Cashless is a facility, not a guarantee: pre-authorisation confirms eligibility, not final payment.
Worked example
A hospital bill is 200,000. The policy has a 20,000 deductible, 10% co-pay and a room-rent sublimit that disallows 15,000. Eligible amount = 200,000 - 15,000 = 185,000. After deductible = 165,000. Co-pay 10% = 16,500. Insurer pays 148,500; insured bears 51,500. Reasoning: apply exclusions and sublimits first, then deductible, then co-pay. Order matters because a co-pay applied before disallowance would overstate the payment.
Traps
- Assuming a 30-day initial waiting period applies to accidents; accident cover usually has no such waiting period.
- Treating pre-authorisation as final approval.
- Confusing PED waiting with disease-specific waiting.
- Forgetting that a personal accident policy does not pay for illness.
- Applying co-pay before sublimit disallowances.