FIELD PROJECT [ SYBMS FINANCE] 2024-25

TOPIC: AWARENESS AND BUYING BEHAVIOUR TOWARDS

HEALTH INSURANCE AMONG HOUSEHOLDS IN CHEMBUR

ROLL NO NAME
GUPTA PRIYANSHU RAJESH
21
HASWANI POOJA LAXMAN
22
JAGTAP BHAGYASHREE ANIL
23
JOSHI DIYA DINESH
24
KATARIA PRANJAL RAJESH
25
KHAIRE AHARTH VINOD
26 {LEADER}
KHAN ANAS SHAMIM
27
KHAN AZRA KHATOON JAMAL
28
KHAN SAMAIRA FEROZ
29
KHAN SANIYA RAMZAN
30
 ➢ Insurance.
Insurance coverage can be defined as a contract in the form of a financial protection policy.
This policy covers the monetary risks of an individual due to unpredictable contingencies or
uncertain loss. An entity which provides insurance is known as an insurer, insurance company,
insurance carrier, or underwriter. A person or entity who buys insurance is known as a
policyholder, while a person or entity covered under the policy is called an insured. The
insurers provide financial coverage or reimbursement in many cases to the policyholder.

Health insurance:

Health insurance is a financial protection plan that helps individuals and families cover
medical expenses. It involves paying a premium to an insurance company, which then provides
coverage for a wide range of healthcare services, including hospitalisation, day-care
procedures, post-hospitalisation expenses, ambulance charges medication, preventive care, etc.

Health insurance operates in two ways: either the policyholder pays for medical expenses
upfront and is later reimbursed by the insurer or the insurance company directly settles the bill
with the networking hospital. The latter is called the cashless mode.

Health insurance plays a crucial role in reducing the financial burden of healthcare and ensuring
access to necessary medical treatments and services.

Health insurance is a part of "Personal Insurance and General Insurance". The medical
insurance or med claim policy is very well known in India. Health is an important indicator in
present work to estimate social as well as economic development of the country. There are lots
of companies which have been offering the cheap med claim policies in India. United nations
have also been taken indicator in their millennium development goal.

The history of Health Insurance in India traces back to 1923 when the Workman's
Compensation Act' was passed. The Health Insurance market has been a frontier with rules
constantly e volving Indian Health Insurance covers medical treatment, in case of illness and
accidents. Get good medical care without worrying about expensive treatment. In view of
purchasing health insurance, an individual or a group has to pay fee called premium to keep
the health insurance policy active. Health Insurance is very well established in many countries.
But in India it is a new concept except for the organized sector employees.
In India only about 2 percent of total health expenditure is funded by public health insurance
while 18 percent is funded by government budget. Health Insurance in India is considered same
as hospitalization where the policy covers the hospitalization expenses. The expenses for
hospital bed, nursing, surgeon's fee, consultant doctor's fees, cost of blood, operation theatre
charges, etc. all are covered. Certain diseases which are mentioned in the policy's terms and
conditions shall be excluded from coverage or may be covered only after one or two years of
the policy issue date.

Increasing utilization of health services is the prime goal of developing countries like India and
health is a very important issue. Health status in India is very poor. Indian government is
focusing more on the states like Bihar, Jharkhand, Uttar Pradesh, Uttarakhand, Madhya
Pradesh, Chhattisgarh, Orissa and Rajasthan because these states alone contribute to more than
half (55%) to the estimated life birth, 66% of infant death and 80/5 of maternal deaths in India.
There eight states constitute 46% of the total population of India and account for 59% to the
total poor in India.

Public health is a primarily the responsibility of the state government. The Central Government
guides and supports major schemes for improving the health status of the people. Public health
expenditure has an important enhance the utilization of health services, especially by the
special part of population who cannot utilize other source due to the condition of cost. This
study focused upon the awareness preference of health insurance and also focuses on the
reasons because of which people are not purchasing Health Insurance Policies.

Purpose of health insurance: The purpose of the health insurance is to act as a safety
net in the complex health care system, and to help families with financial protection against
excessive bills for medical services. It mainly serves to reduce the economic load that comes
with unanticipated health problems, and enabling patients to seek treatment without being faced
by insurmountable expenses. And ensures that people can undergo preventive care, regular
check-ups, etc. Furthermore, it creates a sense of security and reduces anxiety when people
realize that they are covered for treatment during sickness or injury thereby empowering them
to make informed decisions relating to their health. This assurance is particularly important in
times of emergencies where prompt medical attention can be lifesaving.
 Gross premium collection of health insurance in INR
crores
58237

60000

50,752

50000 45,532

37,029
40000

30000

20000

10000

0
FY18 FY19 FY20 FY21

(Source: IRDAI Annual Report)

 ➢ Features of health insurance

1. Waiting Period Concerning Pre-existing Illnesses: Once you buy a health

insurance plan, certain illnesses do not automatically become part of this coverage. This is
especially true for certain existing illnesses. They become eligible to be covered only after
a certain waiting period. This waiting period, however, can be different for different health
insurance plans. Thus, do check on the waiting period, as it can range from a few months
to even years, depending on the policy. A shorter waiting period will provide you with
night-time coverage immediately.

2. Sum Insured or Policy Coverage: This is the maximum amount of expense you
can incur, which will be either reimbursed by the insurer or paid for directly to the hospital.
If your total medical expenses go beyond the sum insured, you will be forced to pay from
your pocket. Ensuring you take the right sum insured thus becomes important. Choosing
the amount that will ensure enough coverage without you having to dip into your savings
thus becomes important. Do look for this while deciding on your health insurance plans

3. Sub-Limits: Another area that can be quite expensive when undergoing medical
treatment is room rent. The room rent is mostly tied to the sum insured; it is generally 1-
2% of the total sum insured. In the case of the ICU, the room rent allowed is a little higher.
It is, however, important that you examine your policy closely to ensure this amount is
enough for your needs.

4. Network of Hospitals Available for Treatment: The cashless facility available

with a health insurance plan is dependent on the network of hospitals that have a tie-up
with the insurance company. The larger the network, the easier it will be for you to pay
cashless for the treatment. However, if the network hospitals are smaller in number, then
you may be required to pay on your own before the expenses can be reimbursed by the
insurer. A large network of hospitals makes it easier to get treatment without any hassles.
The insurance company in this case settles the bill directly. Look for the list of hospitals
available for cashless treatment when you buy health insurance.
 ➢ Importance of health insurances.
1. Financial safety:
As the cost of medical treatments are raising day by day the insurance policy will offer
all around protection from unexpected financial crises. By choosing correct health
insurance policy one can avoid paying highly expensive medical bills or spending on
expensive medicines
2. Hospitalization Expenses:
One of the key health insurance benefits is that it covers almost all hospitalization
expenses.
• Accidental hospitalization: In case the insured person met with an accident he can
claim all his expenses arising out of hospitalization.
• ICU room rent: It provides coverage for the rent of being in ICU (Intensive Care
Unit) room.
• Illness related hospitalization: In case the insured person is hospitalized due to an
illness or disease he can claim all his expenses arising out of hospitalization.
• Organ Donor expenses: if the insured person is recipient of an organ, the expenses
related to the treatment as well as surgery are covered.
3. Income tax benefits:
Buying right help insurance plan also provides you with income tax benefits. According
to Section 80D of Income Tax Act 1961, individuals can claim tax deductions up to Rs.
1 lakh.
4. Complimentary check ups
The right policy will also provide you with the benefit of free check-ups so that you
could be aware of any health condition if present. However, this varies from one policy
to another.
5. Cashless treatment: Today health insurance company provide the joy of cashless
hospitalization. Over here, the insured doesn't need to pay from his pocket all the
expenses are paid by the respective Insurance Company.

6. Illness related hospitalization: In case the insured person is hospitalized due to

an illness or disease, he can claim the expenses arising out of hospitalization.
 ➢ The role of health insurance in financial planning
Those who avail of health insurance are financially protected in the unfortunate event of
injuries or illnesses that require medical attention. Different health insurance plans provide
coverage for different medical issues wherein certain health insurance policies come in
handy for those with specific medical ailments. Health insurance serves as a vital part of
financial planning as it helps you with medical expenses. Moreover, it can prevent you
from having to incur any loans in order to pay these medical bills. Read on to understand
exactly why this is the case.

Medical crises: When a crisis occurs, it doesn’t always come with warning and medical
crises are a prime example of this. Medical issues can occur at any time and do not always
come with warning signs. Health insurance is bought keeping in mind your medical profile,
lifestyle, age, and income. This type of insurance helps you in these medical crises such
that you don’t need to worry about the medical bills that you might incur in a worst-case
scenario. Instead, you can focus on your recovery.

Healthcare: It is important to visit your general physician on a frequent enough basis such
that you are always in the best of health. This is important not just for you but for your
children as well. Health insurance plans provide a number of benefits that include pre- and
post-hospitalization, in-patient care, and also account for yearly health check-ups. Set
against this backdrop you need to think about how you allocate money for your budget.
Healthcare premiums are also needed to be paid and ought to be accounted for when
planning your finances. Also, consider what doctor’s visits are included under your
insurance policy and what aren’t.

Tax Benefits: This makes up a key aspect of financial planning as health insurance plans
bring with them a number of tax benefits. This is owed to the Income Tax Act’s Section
80D whose terms and conditions state that the premium paid for a health insurance plan by
you for yourself and your family doesn’t incur any taxes.

Retirement: Once you retire you don’t earn a fixed income which is when your health
insurance plan truly serves as your knight in shining armour in the event that you have a
medical emergency or require medical care for ongoing treatment.
 ➢ The increasing needs for health insurance
1. Increasing cost of medical treatment: With the advancement of medical technology
and the availability of better healthcare facilities, the cost of medical treatment has gone up
significantly. This, in turn, has led to an increase in the cost of health insurance premiums
as insurance companies need to cover these high medical costs.

Moreover, the cost of medication and medical equipment has also increased, adding to the
overall cost of healthcare. Regardless, people need medical treatment and many of them
depend on health insurance to cover their medical costs. This has resulted in higher
insurance claims, which creates a higher demand for health insurance.

2. Rise in lifestyle diseases: Another reason for the rise in health insurance premiums is
the increase in lifestyle diseases such as diabetes, hypertension, and obesity. These diseases
require long-term medical care and can be expensive to treat. Insurance companies,
therefore, charge higher premiums to cover the treatment cost of these diseases.

3. Pre-existing medical conditions: Insurance companies also need to factor in the risk
of insuring individuals with pre-existing medical conditions. Individuals with pre-existing
medical conditions are more likely to require medical care, which increases the risk for
insurance companies. To cover this risk, insurance companies charge higher premiums to
individuals with pre-existing medical conditions.

4. Fraudulent claims: The increasing number of fraudulent claims has also led to a rise
in health insurance premiums. Insurance companies need to compensate for these
fraudulent claims by increasing premiums for all policyholders. Fraudulent claims can be
in the form of fake medical bills, false claims, or even non-disclosure of key information.

5. Regional healthcare costs: The cost of healthcare services in India varies significantly
across different regions, with some areas having higher healthcare costs than others.
Insurance companies adjust their premiums based on the treatment cost in different regions.
Thus, as a policyholder, you may be charged different rates for the same coverage in
different parts of the county. This depends on the healthcare costs in that specific region.
For instance, the premiums in metro cities are higher than Tier 2 and Tier 3 cities.
 ➢ WORKING OF HEALTH INSURANCE IN INDIA

Health insurance in India is a financial contract between an individual and an insurance

company. In exchange for regular premium payments, the insurer provides financial protection
against unforeseen medical expenses.

Fundamentals of health insurance:

• Coverage: The policy specifies the medical expenses covered, usually including
hospitalization, surgeries, and related costs.
• Sum insured: This is the maximum amount the insurer will pay for medical expenses
in a policy year.
• Network hospitals: These are hospitals tied up with the insurer for cashless treatment.

➢ Process

• Policy purchase: Individuals select a plan based on their needs and budget.
• Premium payment: Regular premium payments are made to the insurer.
• Claim: In case of a medical emergency, the insured files a claim.
• Settlement: The insurer assesses the claim and pays the hospital (cashless) or
reimburses the insured.

➢ Additional considerations:

• Deductibles: A fixed amount the insured pays before the insurer covers expenses.
• Co-pays: A percentage of medical bills the insured pays.
• Waiting periods: Specific conditions or procedures may have a waiting period before
coverage.
• Exclusions: Certain conditions or treatments may not be covered.

In some cases, your medical insurance coverage may also cover visits to doctors and your
diagnostic tests. It may also offer you discounts on the costs of medical services at partner
institutions. All this reduces your health expenses
 ➢ Types of health insurance

1. Individual Health Insurance: An individual health insurance policy, like its name
suggests covers the treatment cost of a single individual. This cover can be availed for
yourself, parents including your spouse and children.

Under this plan, every family member gets an individual sum insured. For example; if your
plan sum insured is Rs 10 lakhs, each family member gets to use up to 10 lakhs each for
that policy period, i.e., if you’re buying an individual plan for three members, the collective
sum insured for the three would be Rs 30 lakhs.

2. Family Floater Health Insurance: Under family floater plans, a single sum
insured is available for all individuals under one policy. This entire sum can be disbursed
for treatment of one person respectively, in which case no subsequent claims are covered
in the event of another medical emergency.

Senior citizens are not eligible under family floater plans, as their medical needs tend
to be more complicated.

3. Senior Citizen Health Insurance: Tailor-made to suit all medical expenses of

aged individuals, such plans like senior citizen health insurance can only be obtained by
people above the age of 60 years. Comprehensive coverage for different types of illnesses
which might develop due to old age is extended.

4. Group Health Insurance: Companies extend such plans to their employees.

Premium is paid by the employer itself and has provisions which ensure refill of the sum
insured. Such group health insurance policies are cost-effective and are undertaken
disbursed as an employee retention tactic.

5. Health Insurance with Maternity Cover: All pre and postnatal care expenses
incurred during pregnancy are covered under maternity insurance cover. Medical bills of a
new-born are included for the first three months as well. However, such policies come with
a waiting period of two years.
 ➢ Challenges of Health Insurance in India
Health insurance is one of the fastest-growing service sectors in the country. India has
witnessed an overwhelming response in the health insurance sector. Getting health
insurance has become a priority for Indians and making healthcare services affordable; the
services offered under health insurance plans effectively ensure every individual's health.
However, less than 15% of the population still opts for a health insurance policy.

The growth of the Indian health insurance industry is expected to remain a long as
increased medical costs, population, and rise in lifestyle disorders are going to increase.
Health insurance awareness in India is increasing but at a slow rate.

Here are some of the possible factors that are responsible for health insurance issues and
challenges.

• Lack of knowledge about health insurance policy: Many people still think
of health insurance as a tax saving or an investment tool. Many programs have been
organized by the Insurance Regulatory Development and Authority of India (IRDAI)
to educate the masses about the importance of insurance, but there still remains a gap.
The major challenge is that people lack basic education and exposure to health
insurance policies.
• Lack of awareness: According to reports, many people save their money and invest
it in real estate or put their savings in liquid assets. Most people are still unable to
understand the benefit of getting a health insurance policy.
• Wrong mindset of people: Many young people think that they are not at risk of
getting any disease; hence, they do not think to opt for a health insurance policy. There
are many people who think to opt for a health insurance policy when they fall sick.
• Unavailability of branches in the rural area: Gradually, there have been some
branches in tier II and III cities, but there are hardly any branches in the rural areas
which are major problems of health insurance in India. The majority of the potential
market is still untouched.
 ➢ Right and responsibility of a policyholder.
Rights are provided to the policyholder which they can use anytime. However, the rights
must not violate any terms and conditions set by the insurance company. In simple term,
insurance policyholder rights are the irreversible power provided to the insured.

[Link] free look right: The policyholder has the right to return the policy and apply for its
cancellation if the policy fails to meet the holder’s requirements. The right can be used within
15 days of buying the policy. The free look period will be extended to 30 days if one decides
to buy life insurance online.

However, the insurance company is free to deduct the amount used to cover the risk for that
period. It also has the right to deduct the cost of the medical tests done before the approval of
the policy.

[Link] right to use the policy as collateral for a loan: While applying for a loan, the
life insurance policy or the guaranteed return plan can be used as collateral. The loan amount
that can be approved is equivalent to 80% of the cash value of the premium paid. The rate of
interest to be charged will be different for different banks.

[Link] regarding a ULIP: The policyholder of a ULIP has the right to a partial
withdrawal of the invested amount. The policyholder also has the right to convert the policy
into a monthly income plan or any other plan of their choosing. The funds in which the
premiums will be invested can be switched based on the convenience of the policyholder. The
beneficiary of the policy will have the right over the death claim amount of the plan.

4. Nomination: While buying the policy, the policyholder must enter the correct details of
the nominee. The policyholder has the flexibility to change the nominee during the term of the
plan. However, they must comply with all the due rules and regulations.

5. In case the policyholder loses the policy: they can easily get a new one. However,
the policyholder must inform the insurance company of the loss and initiate the process of
getting a copy of the original.
 ➢ Common misconception about health insurance

1. I am healthy, I don’t need health insurance: Though it may be true that you are
taking good care of yourself and is fit, but unforeseen events such as accidents and illnesses
such as dengue and malaria can hit anyone. It is not easy to foot the complete hospita l bill
by yourself and a 48-hour hospitalization may force you to pull out all your savings.

2. I will get paid only if I am hospitalised: Many insurance companies put a cap in
terms of minimum hours of hospitalization, but it is not necessary that you may have to
stay in the hospital even if you undergo a surgery. For instance, for cataract or dental
operations, the patient does not need to be hospitalized for 24 hours. Such procedures are
called day care procedures and are covered under the health insurance umbrella.

3. Cashless is the answer: Many health insurance policy buyers feel that a cashless
cover is the answer to all their medical worries. To avail any of the cashless benefits of
your health insurance policy, you first need to check whether the hospital you are admitted
into is a partner in the cashless program of your insurance provider or not. Thus, your
cashless program will not work if the hospital is a non-network hospital.

4. Maternity program won’t be covered: Another misconception amongst policy

buyers is that pregnancy is not covered in their health insurance plan. This was the case
few years ago, however, many insurance companies these days have started to cover
pregnancy and some other maternity benefits in their health insurance cover.

5. Buying health insurance plan for tax savings: Many people have this
misconception that any kind of insurance is primarily for saving tax and coverage comes
as a secondary benefit. Buying health policy only for tax savings purpose will not be too
beneficial. It is advisable that you buy a health insurance policy for insuring against any
large-scale healthcare expenditure rather than saving tax. Thus, if you invest wisely, your
health insurance policy could save you much more than only tax.

6. No changes in Mediclaim Terms: Another misconception amongst health

insurance buyers is that they think the premiums, terms, benefits and procedures of their
health insurance will not change. Some changes or tweaks are always expected with such
insurance products in a five-year span. So always make sure that you are updated with
changes in the terms and procedures of your health insurance policy.

7. Pre-existing diseases: Many health insurance buyers fret about the pre-existing
disease part of a policy. However, every health insurance these days comes with a pre -
existing disease clause, which once over, will cover your pre-existing disease or health
condition as mentioned in the policy. Also, many insurance companies expect the
prospective customer to undergo a thorough medical examination and if you do not have
any pre-existing disease then the clause is not applicable to you

8. Capping on room rent is bad: Capping on room rent is actually not bad. Mostly,
the capping is dependent on or is equivalent to the amount of premium you are paying, how
much sum insured you have opted for and which health insurance policy you are buying.
Thus, capping on room rent should not be a reason to reject a health policy as every plan
and sum insured has different limitations for room rent and intensive care unit (ICU)
charges.

9. Buying policy only is risky: A lot of individuals are of the view that buying health
insurance online is risky. However, when you buy a policy online nothing is hidden from
you and the pain of completing long paperwork is reduced. Also, you can opt various online
methods of transactions such as credit card, debit card and net banking.

10. Only the earning member of the family needs insurance: This is another
misconception amongst policy seekers that a health insurance policy is needed only for the
main earning member of the family. However, health insurance should cover the entire
family, including parents, spouse and children of the consumer.
 ➢ Difference between life insurance and health insurance

Points Life Insurance Health Insurance

Life Insurance offers an

Health insurance covers the cost of
assured sum to the
Concept hospital/surgical expenses if the
beneficiaries in the eventuality
insured person is hospitalized.
of the insured's demise.

covers financial risk associated with

Insures financial risk/loss of income
Risk Factor hospitalization due to illness, injuries, and
related to the insured’s death.
related expenses.

Financial support for your

Financial support in case of unexpected
Benefits family/beneficiaries even in your
medical emergencies.
absence.

Tenure is not fixed. The insured has the

The coverage has a fixed, long tenure.
Tenure liberty to renew the policy once the tenure
Terminated once the tenure is over.
gets expired, which is usually a year.

No survival or death benefits are offered to

Includes survival and death benefits at the insured unless mentioned specifically. It
Inclusions
the end of your insurance policy. only caters to the recent treatment charges
and medical needs.

Premium Premiums are both fixed and flexible

Premiums are usually fixed.
Calculation as per the insurance policy.

Tax benefits for a premium paid as per Tax benefits as per Section 80d of the
Tax Benefits
Section 80c of the Income Tax Act. Income Tax Act.
 ➢ List of health insurance companies in India
1. Star Health & Allied Insurance
Star Health & Allied Insurance Co. was founded in 2006 as a joint enterprise with Allied
Insurance. The company is one of the top players in the health insurance industry with a
network of 14,000+ hospitals. Star Health & Allied Insurance has a claims settlement ratio of
99.21%.
The company offers a variety of health insurance plans covering hospitalisation expenses,
critical illnesses, medical check-ups, ambulance charges, maternity expenses, and more,
tailored to meet the diverse needs of customers. Star Comprehensive Insurance Plan, Star
Family Floater Plan, Star Senior Citizens Red Carpet Plan, Star Cardiac Care Insurance Plan,
and Star Comprehensive Insurance Policy are the popular health plans from the company.

2. Care Health Insurance

Care Health Insurance (formerly Relegate Health Insurance) is a leading health insurance
company in India that offers a wide range of comprehensive health insurance plans for
individuals and families. The company was established in 2012 as a subsidiary of Relegate
Enterprises and was renamed in August 2020.
Care Health Insurance offers various health insurance plans, including Care Supreme, Care,
Care Classic, Care Freedom, Care Critical Mediclaim, Care Cancer Mediclaim, Care Heart
Mediclaim, Care Plus, Care Heart Insurance, Care Arogya Sanjeev ani Policy, and Care
Operation Mediclaim.

3. ICICI Lombard General Insurance

ICICI Lombard General Insurance Company Limited was launched in 2001 as a joint venture
between ICICI Bank Limited from India and Fairfax Financial Holdings Limited from Canada.
ICICI Lombard Health Advantage, Arogya Sanjeevani Policy, Health Booster Policy and Befit
are the popular plans of the company.
ICICI Lombard health insurance plans cover no room rent capping, no co-payment, OPD
cover, lifelong renewability, and coverage for medical expenses, accidents, and critical
illnesses.
4. Aditya Birla Health Insurance
Aditya Birla Health Insurance is a prominent health insurance provider in India, providing
health insurance plans designed to meet the varied healthcare needs of individuals and
families.
Aditya Birla Health Insurance offers plans including Active Health Platinum, Active Fit,
Active Assure Diamond, Active Care, Active Cancer Secure, Super Health Plus Top Up, Active
Secure Critical Illness etc. Aditya Birla Health Insurance plans come with unique features like
Health Returns, Chronic Management Program, Second E Opinion, Choice of Hospital Room,
Day 1 Cover etc.

5. Manipal CIGNA Health Insurance Company

Manipal CIGNA Health Insurance Company is a collaboration between Manipal Group, a
renowned name in healthcare and education in India, and Cigna Corporation, a global health
services enterprise Manipal CIGNA offers plans with benefits like cashless claim settlement at
8700+ network hospitals, coverage for pre and post-hospitalisation expenses, day-care
procedures, domiciliary, and AYUSH treatment coverage.

6. Acko General Insurance

Acko General Insurance has health insurance plans tailored to meet the various needs of
individuals and families. The company has a vast network of more than 14,500 hospitals across
India, providing policyholders with the convenience of cashless hospitalisation.
Acko Health Insurance plans offer benefits like lifetime renewability, grace period, free look
period, doctor-on-call services, family physician services, daily hospital cash, critical illness
cover, and more, enhancing the overall coverage and benefits for policyholders. ACKO
Platinum Plan and Acko Standard Plan are the popular plans from the company.

7. TATA AIG General Insurance

Tata AIG General Insurance is a joint venture between Tata Sons Private Limited and
American International Group (AIG). The health insurance plans from Tata AIG General
Insurance provide wide coverage options, including individual, family, critical illness, personal
accident, and COVID-19-specific coverage, catering to various healthcare needs and ensuring
comprehensive protection for policyholders and their families.