Health Insurance
What the domain tests
This domain tests indemnity and benefit health products, hospitalisation cover, waiting periods, pre-existing disease rules, sub-limits, co-payment, deductibles, cashless service, third-party administrators, portability, and moratorium provisions.
Core rules and concepts
- Indemnity health cover reimburses actual hospitalisation costs up to the sum insured. Benefit cover pays a fixed amount on a defined event, such as a daily hospital cash benefit.
- Policies commonly use waiting periods for pre-existing diseases, specific illnesses, and maternity. Pre-existing disease means a condition diagnosed or for which advice or treatment was received before cover, as defined in the policy.
- Sub-limits cap room rent, ICU charges, or specific treatments. Co-payment is the insured’s share; a deductible is the amount borne before the insurer pays.
- Cashless service is available through network providers. A TPA may administer claims, but the insurer remains responsible under the policy.
- Portability allows credit for waiting periods when switching insurers, subject to underwriting and rules.
Worked example
A policy has a ₹5 lakh sum insured, 10% co-payment, and a ₹4,000 per day room-rent limit. A covered hospital bill is ₹2 lakh and the Insured uses a room within the limit. The insurer pays 90% of admissible costs, and the insured pays ₹20,000, subject to non-payable items. If the room exceeds the limit, proportionate deduction may apply.
Traps that cost marks
Do not assume all hospital expenses are payable; consumables and non-medical items may be excluded. Do not ignore waiting periods. Do not confuse co-payment with deductible. Do not say a TPA is the insurer. Do not treat portability as automatic waiver of all waiting periods.