Frequently Asked Questions
All you need to know about Intoiit .
If you have commercial insurance, insurers negotiate payment rates with hospitals. These rates can differ among companies, where larger insurers tend to demand bigger discounts. The demands for discounts by commercial insurance companies create further complexity for hospitals and patients to determine the true cost of any given procedure.
Commercial insurers do not pay full hospital charges. Furthermore, numerous factors, such as the type of plan, co-pay amount, co-insurance amount, deductible, out-of-pocket maximums and other limitations will affect the individual's financial responsibility to a hospital. Therefore, it is crucial that you begin by talking to your insurance company to understand all of the factors affecting your financial responsibility.
Charge Definition: The amount a hospital sets for total services provided to the patient before any insurance discounts. Similar to a sticker price, it is usually not the final amount paid. Reimbursement: The amount a commercial insurer pays to the hospital for inpatient stay from commercial insurance provider. Rates are negotiated between the insurance company and the hospital. Out-of-pocket costs: The amount a patient pays to the hospital after reimbursement from commercial insurance provider (for example, deductible or co-pay). Example of a charge breakdown:
Knee replacement total charge: $38,000
Hospital reimbursement: In this example, the insurance company has negotiated a 30 percent discount with hospital. Therefore, the hospital will receive $26,600 from the insurer. Out-of-pocket cost: Commercial insurance deductible is $1,000.
In this example, the hospital will receive $26,600 for a $38,000 charge. This illustrates that the charge or sticker price is often not the final amount paid.
This is a percentage of the premium appropriated towards charges before allocating the units under the policy. This charge normally includes initial and renewal expenses apart from commission expenses. Mortality Charges
These are charges to provide for the cost of insurance coverage under the plan. Mortality charges depend on number of factors such as age, amount of coverage, state of health etc. Fund Management Fees
These are fees levied for management of the fund(s) and are deducted before arriving at the Net Asset Value (NAV) . Policy/ Administration Charges
These are the fees for administration of the plan and levied by cancellation of units. This could be flat throughout the policy term or vary at a pre-determined rate. Surrender Charges
A surrender charge may be deducted for premature partial or full encashment of units wherever applicable, as mentioned in the policy conditions. Fund Switching Charge
Generally a limited number of fund switches may be allowed each year without charge, with subsequent switches, subject to a charge. Service Tax Deductions
Before allotment of the units the applicable service tax is deducted from the risk portion of the premium. Investors may note, that the portion of the premium after deducting for all charges and premium for risk cover is utilized for purchasing units.
Category Name : Unit Linked Insurance Policies
- All the charges deductible under the policy
- Payment on premature surrender
- Features and benefits
- Limitations and exclusions
- Lapsation and its consequences
- Other disclosures
- Illustration projecting benefits payable in two scenarios of 6% and 10% returns as prescribed by the life insurance council.
b) Discontinuance after three years of commencement - At the end of the period allowed for revival, the contract shall be terminated by paying the surrender value. The insurer may offer to continue the insurance cover, if so opted for by the policy holder, levying appropriate charges until the fund value is not less than one full year's premium. When the fund value reaches an amount equivalent to one full year's premium, the contract shall be terminated by paying the fund value.
c) Policies having 5 year lock-in-period: For policies bought on or after 01-09-2010, lock in period has been increased to 5 years. Upon discontinuance of the payment of premium, the policyholder has the option of (i) Reviving the policy or (ii) Complete withdrawal without any risk cover.
A notice shall be sent by the insurer giving the above options, within 15 days from the date of expiry of grace period, if no option or option (ii) is exercised within 30 days of such notice, the proceeds of discontinued policy shall be refunded but not before the completion of the lock-in period. If such discontinuance is within lock in period, the policyholder shall have the right to revive the policy within a period of two years from the date of discontinuance but not later than the expiry of the lock-in period.
If a person is allowed to insure something that he does not own it becomes a wagering contract and therefore void under Section 30 of Indian Contract Act.
Therefore Insurable interest is a pre-requisite for insurance and the compensation is limited by the value of the subject matter of insurance and the extent of insurance coverage. In Life Insurance, though human life value cannot be measured in monetary terms, insurers determine the sum assured as a multiple of the income of the life assured and his remaining productive years.
Detailed regulations have been framed by Insurance Regulatory and Development Authority (IRDA) for both Agents and Brokers and they govern them.
This is a way for the insurance companies to avoid the administrative costs of small claims and the insured is usually given a premium rebate for accepting this burden.