Health Insurance Glossary (3) - INDIA - continued

Insurance

Insurance is a contract in which an individual or entity, pays the insurance company in return for the insurance company bearing the risk of loss against specified conditions. The individual  receives reimbursement against losses from an insurance company. The company pools the clients' risks to make payments more affordable for the insured.

IRDA

IRDA stands for “Insurance Regulatory and Development Authority”. It was established in 1999 under an act of Parliament to promote and regulate the insurance industry in India including all its constituents like Insurance Companies, Agents and Brokers.

Moral Hazard

Moral Hazard is a term used in insurance to describe the phenomena where the customer may seek an undue advantage, as a result of buying insurance or where the customer has not acted in good faith and has provided misleading information to the insurance company.

Network Hospital

Network Hospitals are hospitals and nursing homes which are associated with the “Third Party Administrator”(see below). Cashless mediclaim is facilitated through this network of hospitals as the TPA directly pays these hospitals.

No Claim Discount

No Claim Discount is a discount on the Basic Premium if there is a claim free year of the policy. If the insured does not make any claim on his policy, then he gets a discount from 5% to 25% on basic Premium for every claim free year.

Overseas Medical Policy(OMP)

An overseas mediclaim policy is issued to persons who undertake trips abroad for business or pleasure or for educational purposes. The policy terms are similar to plain vanilla mediclaim policy with no pre -existing disease coverage and similar exclusions as well. The only difference being that it is applicable in the country of travel and not India.