Summer internship program final report

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SUMMER INTERNSHIP PROGRAM
Project Report on
Is taxation is a selling tool for health insurance?
At
Submitted in the Partial Fulfillment
of the study of
“Masters of Business Administration”
Guidance/Accepted by- Mr. Ravi Mishra
SUBMITTED BY- Ragnee Chauhan
ERP ID- 0181MBA069
DATE- 21/08/2019-31/10/2019

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CERTIFICATE OF ORIGINALITY
(To be filled by the student in his/her handwriting)
I _____________________, Enrolment No. ____________
of 2018-2020.
I am a full-time bona-fide student of ____________________________________. I hereby certify
that this Study report work carried out by me at
_________________________________submitted as the per the requirements of the program is
an original work of mine under the guidance of the industry guide ______________________ &
internal guide (Faculty) _________________________and is not based on or reproduced from any
existing work of any other person or any earlier work undertaken at any other time or for any other
purpose, and has not been submitted anywhere else at any time.
(Student’s Signature)
Date:
(Internal Guide’s Signature)
Date:

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ACKNOWLEDGEMENT
I hereby acknowledge my sincere gratitude to the Doon Business School for giving this
opportunity to undergo MBA BASE course to undertake this project work.
I express my heartfelt thanks to Mr. Ravi Mishra for whose guidance made this project an
enlightening educational experience.
I would like to thank _____________________ for giving me the opportunity to associate with
such an esteemed organization and gain practical exposure.
I am very much obliged and indebted to Prof. Chhavi Prakash Mahto for his approval and
guidance during internship and valuable suggestions to take up the project.

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Contents
EXECUTIVE SUMMARY.....................................................................7
OBJECTIVE OF THE STUDY.................................................................................................................8
ADITYA BIRLA GROUP......................................................................9
Values.....................................................................................................................................................10
INTRODUCTION.................................................................................................................................11
GLOBAL PRESENCE .........................................................................................................................11
PRINCIPAL COMPETITORS ...........................................................................................................12
GROUP PROFILE ...............................................................................................................................12
BUSINESS SECTORS..........................................................................................................................13
MANAGEMENT HIERARCHY.........................................................................................................15
BEYOND BUSINESS...........................................................................................................................15
Aditya Birla Capital Limited (ABCL) ................................................16
PRODUCTS...............................................................................................................................................17
Companies in Aditya Birla Capital .........................................................................................................17
PRODUCTS...........................................................................................................................................19
Aditya Birla Health Insurance.............................................................20
KEY ADVANTAGES AND FEATURES...............................................................................................21
TYPES OF PRODUCTS ..........................................................................................................................22
Why Aditya Birla Health Insurance Is Different From Others?..........................................................24
COMPETITORS.......................................................................................................................................25
EVOLUTION OF HEALTH INSURANCE.......................................27
INSURANCE INDUSTRY PROFILE ................................................28
MARKET SIZE ........................................................................................................................................28
INVESTMENTS AND RECENT DEVELOPMENTS..........................................................................29
GOVERNMENT INITIATIVES.............................................................................................................29
HEALTH INSURANCE SCENARIO IN INDIA ..................................................................................30
VARIOUS HEALTH INSURANCE PRODUCTS AVAILABLE IN INDIA- ....................................31

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Types of Insurance ................................................................................35
Life Insurance............................................................................................................................................35
Types of General Insurance available.....................................................................................................35
TAX LAWS AFFECTING INSURANCE INDUSTRY....................37
Service Tax ................................................................................................................................................37
Tax benefit for tax paid on Insurance premium ....................................................................................37
GST paid on health insurance-................................................................................................................38
Tax Benefits under Section 80C- .............................................................................................................39
Tax Benefits under Section 80CCC-........................................................................................................40
Tax Benefits under Section 80D- .............................................................................................................40
Investments in Tax Saving FDs- ..........................................................................................................44
Investments in PPF (Public Provident Fund)- ...................................................................................44
Investments in EPF (Employee Provident Fund)- .............................................................................45
Investments in NPS (National Pension System)-................................................................................45
Investments in Sukanya Samriddhi Yojana-..........................................................................................46
IMPORTANCE OF HEALTH INSURANCE .......................................................................................47
REGULATORY FRAMEWORK .......................................................48
IRDAI .....................................................................................................48
THIRED PARTY ADMINISTRATION.................................................................................................49
ROLE OF TPA IN HEALTH INSURANCE .....................................................................................49
THE SERVICES PROVIDED BY TPA ARE AS FOLLOWS: .......................................................50
THE SPECIALIZED FUNCTIONS OF THE TPA INCLUDE:......................................................51
CLAIM MANAGEMENT....................................................................52
RESEARCH METHODOLOGY ........................................................53
SAMPLE SIZE..........................................................................................................................................54
STATISTICAL TOOL.............................................................................................................................54
RESEARCH GAPS/LIMITATIONS......................................................................................................54

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DATA ANALYSIS AND FINDINGS..................................................55
LITERATURE REVIEW.....................................................................65
FINDINGS..............................................................................................66
SUGGESTION/RECOMMENDATION ............................................66
CONCLUSION......................................................................................67
BIBILIOGRAPHY................................................................................68

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EXECUTIVE SUMMARY
This Research work is totally focusing on the consumer behavior towards Health Insurance
Policies, and as well as consumer‘s awareness, Preference and consumption patterns, also
opinion about the determinants of image of a Health Insurance.
This project has been made on the research on “Is taxation is a selling tool for Health
Insurance”. Purpose of this project is to identify the characteristics of different variables like tax
benefit, health issues and financial planning which are mostly responsible for taking health
insurance policy by the people, also the main aim of research work is to find out buying behavior
of the people before purchase insurance policy and to find out what are the factor behind it.
Health Insurance is Insurance that pays for medical expenses. It is sometimes used more broadly
to include Insurance covering disability or long-term nursing or custodial care needs. It may be
provided through a government’s Sponsored social Insurance program, or from private Insurance
companies. It may be purchased on a group basis (e.g., by a firm to cover its employees) or
purchased by individual consumers. In each case, the covered groups or individuals pay
premiums or taxes to help protect themselves from high or unexpected healthcare expenses.
Similar benefits paying for medical expenses may also be provided through social welfare
programs funded by the government. By estimating the overall risk of Healthcare expenses, a
routine finance structure (such as a monthly premium or annual tax) can be developed, ensuring
that money is available to pay for the healthcare benefits specified in the insurance agreement.
The benefit is administered by a central organization such as a government agency, private
business, or not for profit entity. The most important thing which is learned from this project is
how to conduct a research on a particular problem by using different research methodology
techniques.
The health insurance market covers very smaller part of the total population (about 10%) in
India. Presently, schemes like Voluntary health insurance schemes or Private for-profit schemes;
Employer-based schemes; Insurance offered by NGOs / community-based health insurance, and
Mandatory health insurance schemes or government run schemes (ESIS, CGHS) are found in
India. The Health Insurance market in India is unique and has developed a strong growth
potential in the recent years with the entry of many foreign players in the market. Gross
premiums in India reached Rs 5.53 trillion (US$ 94.48 billion) in FY18, with Rs 4.58 trillion
(US$ 71.1 billion) from life insurance and Rs 1.51 trillion (US$ 23.38 billion) from non-life
insurance While the penetration of the Health Insurance market is still quite small, it is one of the
fastest growing Industries in India.
This Research analyzes this growing industry in its research report Health Insurance Industry in
India. The report analyzes the whole industry in terms of growth rate, market segments, and the
major players in the industry.

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The growth will be supported by stand-alone Health Insurance companies and new players
entering healthcare market with improved healthcare infrastructure
across the country motivating a larger section of population for better healthcare services through
various healthcare insurance policies. Currently State-owned health insurance companies
constitute about 70% of the market and the rest is occupied by private companies. However
private companies are growing fast and aims to occupy a larger hare in the Health Insurance
market in near future. This report has attempted to discuss the vital scenario in healthcare and
Health Insurance market in India. A brief about global insurance industry in 2019, Indian
Insurance industry and Health Insurance industry overview are discussed. Growth drivers and
issues of the industry are also covered. Major public and private players are covered in terms of
their performance, products and out-look. Future outlook of the industry is also discussed. The
report will be useful for insurance companies (both Indian and global), other intermediaries
associated with the industry, industry analysts, companies aspiring to be TPAs and students in
the field of Insurance.
Since the liberalization in 2000, the Insurance industry in India has been growing considerably
driven by multiple favorable economic and demographic factors. The Indian health insurance
market grew at a CAGR of 24.00%. And expected to grow US$ 372 billion by 2022 register the
fastest growth among all the Insurance sectors. Factors such as robust economic growth,
changing demographic patterns such as the rise in double income no kids‘ families, increased
FDI limits and the expansion of distribution channels are expected to contribute to the market
growth in the forecast period. Of the overall healthcare expenditure in India, only 26% comes
from the local, state and central government authorities, while nearly 71% is paid by the patient‘s
family. Insurance accounts for just 3% of overall healthcare expenditure in India, indicating a
substantial opportunity for the Health Insurance sector. The Health Insurance market is
dominated by public-sector companies, while the private sector has made gradual progress in the
sector.
OBJECTIVE OF THE STUDY
• To know the preference of individual regarding health insurance.
• To evaluate consumption patterns of health insurance.
• To assess the effectiveness of company services

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ADITYA BIRLA GROUP
Vision: To be a premium global conglomerate with a clear focus on each business.
Mission: To deliver superior value to our customers, shareholders, employees and society at
large.
Founder: Seth Shiv Narayan Birla
Founded: 1857
Headquarters: Mumbai
Revenue: 4,830 crores USD (2019)
Number of employees: 1,20,000 (2015)

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Values
Integrity-Acting and taking decisions in a manner that is fair and honest. Following
the highest standards of professionalism and being recognized for doing so. Integrity
for us means not only financial and intellectual integrity, but encompasses all other
forms as are generally understood.
Commitment-On the foundation of integrity, doing all that is needed to deliver
value to all stakeholders. In the process, being accountable for our own actions and
decisions, those of our team and those on the part of the organization for which we are
responsible.
Passion-An energetic, intuitive zeal that arises from emotional engagement with the
organization that makes work joyful and inspires each one to give his or her best. A
voluntary, spontaneous and relentless pursuit of goals and objectives with the highest
level of energy and enthusiasm.
Seamlessness-Thinking and working together across functional groups,
hierarchies, businesses and geographies. Leveraging diverse competencies and
perspectives to garner the benefits of synergy while promoting organizational unity
through sharing and collaborative efforts.
Speed-Responding to internal and external customers with a sense of urgency.
Continuously striving to finish before deadlines and choosing the best rhythm to
optimize organizational efficiencies.

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INTRODUCTION
Aditya Birla Group is one of India's largest conglomerates and also claims to be the most
international of the country's major corporations. The company acts as a holding company for
more than 72 manufacturing and services subsidiaries throughout India, and in Thailand,
Indonesia, the Philippines, Malaysia, Australia, China, Egypt, and Canada. Aditya Birla's major
subsidiaries include Grasim, the world's leading producer of viscose staple fiber, and a
manufacturer of rayon grade pulp, cement, sponge iron, textiles, and chemicals; Hindalco, a
leading producer of aluminum and copper; UltraTech Cement, which produces portland cement
and related products; Aditya Birla Nuvo, which manufactures clothing, textiles, and carbon black
and is India's second largest producer of viscose filament yarn; Indo Gulf, a fertilizer producer;
Birla NGK Insulators (a joint venture with NGK of Japan), which is the world's leading producer
of insulators; and Idea Cellular Ltd., a mobile service provider jointly owned with fellow Indian
conglomerate Tata Industries. The company also produces software and provides IT services,
and operates a number of financial products subsidiaries. The company's Birla Sun
Life Insurance Co. is the second largest private sector insurance company in India, and its Birla
Sun Life Asset Management Co. is the country's fourth largest assets manager. In other areas, the
company claims to be the world's eighth largest producer of cement and the world's fourth largest
producer of carbon black. These operations combine to generate revenues of nearly $7.6 billion
per year. The company is led by Kumar Mangalam Birla, son of Aditya Birla.
GLOBAL PRESENCE
Australia | Bahrain | Bangladesh | Bolivia | Brazil | Canada | China | Egypt | Germany | Hungary |
India | Indonesia
Italy |. Ivory Coast | Kenya | Mozambique | Myanmar | Paraguay | Philippines | Russia |
Singapore | South Korea
Spain | Sri Lanka | Sweden | Switzerland | Tanzania | Thailand | Turkey | UAE | UK | USA |
Vietnam | Zambia

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PRINCIPAL COMPETITORS
RPG Enterprises; Tata Sons Ltd.; Murugappa Group; Jaypee Group; Amalgamations Ltd.; Dabur
India Ltd.; Balmer Lawrie and Company Ltd.; Escorts Ltd.; HMT Ltd.; Greaves Cotton Ltd.;
Bombay Burmah Trading Corporation.
GROUP PROFILE
A US $48.3 billion corporation
Founded in 1857: Seth Shiv Narayan Birla commences cotton trading operations at Pilani,
Rajasthan, sets foundation of the Birla Group of Companies
Is in the League of Fortune 500
An extraordinary force of over 120,000 employees, belonging to 42 nationalities
Over 50 per cent of its revenues flow from its overseas operations spanning 34 countries
Named the AON best employer in India for 2018 - the third time over the last 7 years
The Group topped the Nielsen's Corporate Image Monitor 2014-15 and emerged as the 'No.1
Corporate', the 'Best in Class', for the third consecutive year
Number of companies: 38

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Companies listed on BSE and NSE:
BUSINESS SECTORS
Metals-
• Aluminum ( Hindalco, Novelis)
• COPPER (BIRLA COPPER)
Cement-
• Ultratech cement
Telecom-
• Vodafone Idea Limited
Financial services-
• Aditya Birla Capital Ltd.
Textiles-
• Grasim
Fashion and Retail-
• Aditya Birla Fashion and Retail Ltd.
Carbon Black
• Birla Carbon
Chemicals
• Aditya Birla Chemicals
Insulators
• Aditya Birla Insulators
Agri-Business
• Indo Gulf
Mining
• Aditya Birla Natural Resources/ Essel Mining

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Globally, the Aditya Birla Group is
1st in aluminum rolling
1st in viscose staple fibre
1st in carbon black
2nd in telecom
3rd in cement (excluding China)
4th largest producer of insulators
In India, the Group leads in several sectors
No. 1 fashion (branded apparel) and lifestyle player
No. 1 mobile telephony company
The 2nd largest player in viscose filament yarn
The largest producer in the chlor-alkali sector
No. 1 player in grey cement, white cement and concrete
A leading player in life insurance and asset management

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MANAGEMENT HIERARCHY
BEYOND BUSINESS
Reaches out annually to 7.5 million people through the Aditya Birla Centre for Community
Initiatives and Rural Development
Works in 5,000 villages globally
Runs 56 schools which provide quality education to 46,500 children. Of these 18,000 students
belong to the underprivileged segment
Merit scholarships are given to 24,000 children from the interiors
Its 20 hospitals tend to more than a million villagers
Ongoing education, healthcare and sustainable livelihood projects in Philippines, Thailand,
Indonesia, Egypt, Korea and Brazil lift thousands of people out of poverty
Providing mid-day meals to 74,000 children through Akshaya Patra

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Aditya Birla Capital Limited (ABCL)
Aditya Birla Capital Limited (ABCL) is the holding company of all the financial services businesses of
the Aditya Birla Group. Through its subsidiaries and joint ventures, it manages aggregate assets worth
more than Rs3000 billion and has a lending book of Rs600 billion (including housing) as of December
31, 2018. ABCL is among the top five private diversified NBFCs in India. It is also one of the largest
private life insurance companies, asset management companies and general insurance brokers in the
country. The company has undertaken various internal and external sustainability efforts to be a
sustainability leader in its sector.
Aditya Birla Capital Limited is the holding company of all the following financial services
businesses:
Aditya Birla Finance Limited
Aditya Birla Health Insurance Limited
Aditya Birla Housing Finance Limited
Aditya Birla Insurance Brokers Limited
Aditya Birla Money
Aditya Birla My universe Limited
Aditya Birla PE Advisors Limited
Aditya Birla Sun Life Asset Management Company
Aditya Birla Sun Life Insurance
Aditya Birla Sun Life Mutual Fund
Aditya Birla Sun Life Pension Management Limited
Aditya Birla Asset Reconstruction Company Limited

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PRODUCTS
• Insurance
• Wealth management
• Financing
• Advising
Companies in Aditya Birla Capital
Aditya Birla Finance Limited
ABFL offers customised solutions in areas of personal and business loans , corporate finance ,mortgages ,
capital market- based lending , project loans, structured finance ,wealth management and digital lending,
debit market and syndication
Aditya Birla Health Insurance
Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by
the insured. Health insurance can return the money insured for expenses incurred from illness or injury, or
pay the care provider directly.
Aditya Birla Housing Finance Limited
“The purpose of a housing finance system is to provide the funds which home-buyers need to purchase
their homes that is call housing finance
Aditya Birla Insurance Brokers Limited
Aditya Birla Insurance Brokers Limited is a leading composite general insurance intermediary, licensed
by the Insurance Regulatory and Development Authority of India (IRDA). The company specialises in
providing general insurance broking and risk management solutions for corporates and individuals alike.
Aditya Birla Money
Aditya Birla money provide a range of other products from Aditya Birla money mart limited like
company deposits ,mutual funds , insurance, structured products, alternate investment and has a premier
wealth management .
Aditya Birla My Universe Limited
Aditya Birla is an online money management platform, it offering customers an opportunity to manage
their financial status
Aditya Birla PE Advisors Limited
Aditya Birla PE advisor is a wholly owned subsidiary of ABCL. It provides financial advisory and
management services with focus on managing venture capital funds and alternate investment fund.

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Aditya Birla Sun Life Asset Management Company
Aditya Birla Sun Life Insurance
Life insurance is a form of insurance in which a person makes regular payments to an insurance company,
in return for a sum of money to be paid to them after a period of time, or to their family if they die
Aditya Birla Sun Life Mutual Fund
A mutual fund is a professionally managed investment fund that pools money from many investors to
purchase securities. These investors may be retail or institutional in nature.
Aditya Birla Sun Life Pension Management Limited
A pension is a type of retirement plan that provides monthly income in retirement. Not all employers offer
pensions. Government organizations usually offer a pension, and some large companies offer them and
Aditya Birla company one of them.
Aditya Birla Asset Reconstruction Company Limited
Aditya Birla Asset Reconstruction Company is a specialized Financial Institution That Buys the NPAs or
bad assets from banks and financial institutions so that the latter can be clean up their balance sheets. Or
in other words. ARCs are in the business of buying bad loans from banks.
Aditya Birla Motors Insurance
Aditya Birla motor insurance motor insurance is an insurance for cars, trucks, motorcycle and other road
vehicles .Its primary use is to provide financial protection against physical damage
Aditya Birla Travel Insurance
Travel insurance is insurance that is intended to cover medical expenses, trip cancellation, lost luggage,
flight accident and other losses incurred while traveling
Aditya Birla Life Insurance
Aditya Birla life insurance is a contract between an insurance policy hold and an insurer or assurer, where
the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the
death of an insured person. Depending on the contract, other events such as terminal illness or critical
illness can also trigger payment. The policy holder typically pays a premium, either regularly or as one
lump sum. Other expenses such as funeral expenses, can also be included in the benefits.
Aditya Birla Wealth Management
Wealth management is a high-level professional service that combines financial and investment advice,
accounting and tax services, retirement planning and legal or estate planning for one set.

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Aditya Birla Wellness
Good health is a state of physical, psychological, social and spiritual wellbeing. Aditya Birla memorial
hospital aim is to create awareness, educate patients and guide them to a healthy life style.
PRODUCTS
INSURANCE
WEALTH MANAGEMENT
FINANCING
ADVISING

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Aditya Birla Health Insurance
Walk with us towards health, we are with you every step of the way.
Purpose : Empower and motivate the families to prioritize their health and live heathy and
disease-free lives.
Aditya Birla Health Insurance Co. Limited(ABHICL) ,subsidiary of Aditya Birla Capital Ltd
(ABCL), is a joint venture between Aditya Birla Group and MMI Holdings of South Africa.
ABHICL was incorporated in 2015 wherein Aditya Birla Capital Limited(ABCL) and MMI
Strategic Investments (Pty) Ltd. hold 51% and 49% shares respectively. ABHICL commenced its
operations in October 2016 and is engaged in the business of health insurance. ABHICL’s
current product portfolio includes unique offerings including chronic care and incentivized
wellness.
ABHICL recorded a gross premium income of Rs. 3,155 Mn in nine months of FY 2018-19 and
has covered more than 1.3Mn lives on date. ABHICL has nation-wide distribution presence in
over 650 cities through branches and partner offices, 9 bank assurance partners and over 17,100+
direct selling agents.
ABHICL serves as an enabler and influencer of health and healthcare choices that customers
make, in addition to being a player of healthcare expenses. Thus, ABHICL would act like a
much–needed catalyst to grow the prevalent health insurance landscape in India through product
innovations and a wider choice of consumer relevant products. ABHICL has invested
considerable time and effort to understand existing correlations between good health and
individual health choices. ABHICL’s product philosophy aims to combine understanding of this
science with an assessment of unaddressed needs of large customer segments, which presently
remain unfulfilled.Aditya Birla Capital Limited(ABCL), is the financial services platform of the
Aditya Birla Group. With a strong presence across the life insurance, asset management, private
equity, corporate lending, structured finance, project finance, general insurance broking, wealth
management, equity, currency and commodity broking, online personal finance management,
housing finance, pension fund management and health insurance business, ABCL is committed
to serving the end-to-end financial services needs of its retail and corporate customers. Anchored

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by more than 17,000 employees, ABCL has a nationwide reach and more than 2,00,000
agents/channel partners.
• Aditya Birla Health Insurance Company was established to bring focus on health as much as
insurance. The current healthcare facility in the country needs significant improvement, and this
initiative is a moving a step closer towards achieving the goal for a better and healthier India.
• Mayank Bathwal, earlier the Deputy CEO of Birla Sun Life Insurance was made the Chief
Executive Officer of ABHICL. He has been with the Aditya Birla Group for more than 20 years
and has been trusted with the responsibility of taking ABHICL towards success.
• ABHICL is entering the Indian health market with a business differentiated model when
evaluated with that of any health insurance player existing. They are presenting health insurance
to a wider customer set by creating awareness and changing existing consumer approach towards
health insurance.
KEY ADVANTAGES AND FEATURES
Below is a list of the key advantages that ABHICL has over its competitors-
Exclusive Focus on Health Insurance:
Insurance Regulatory and Development Authority, which regulates, promotes and ensures the
growth of the insurance industry in India pointed out that there, are only five private sector
general insurers that exclusively deal with health insurance. ABHICL is the first health insurance
company to be issued with a certificate of registration.
Customization of the plan:
The certificate of registration is a mandatory requirement for the amendment of the Insurance
Act, 1938 to classify a company specifically for health insurance. When compared to these
companies Aditya Birla group has much more customization of the plan and is turning its focus
on the retail sector.

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TYPES OF PRODUCTS
Activ Health Essential
This plan is aimed at helping customers stay healthy. It provides health rewards for following a
healthy lifestyle. Benefits It also has many another optional cover apart from the following:
· Inpatient Hospitalization
· Pre-hospitalization Medical Expenses
· Post-hospitalization Medical Expenses
· Day-care Treatment
· Domiciliary Hospitalization
· Road Ambulance Cover
· Benefit for Hospital Room Choice
· Second E-Opinion on Critical Illness
· Cumulative Bonus
· Health Check-up program
· Chronic Management Program
· Health Returns™
· Wellness Coach
· OPD Expenses
· Deductible
· Maternity, Newborn and Vaccination Expenses
· Hospital Cash Benefit
Activ Health Enhanced
· This plan is a value for money health cover.
Benefits- In the Activ enhanced plan apart from the following benefits it also provides a reload of the sum
insured.· Inpatient Hospitalization
· Pre-hospitalization Medical Expenses
· Post-hospitalization Medical Expenses
· Day-care Treatment
· Domiciliary Hospitalization
· Road Ambulance Cover
· Organ Donor Expenses
· Reload of Sum Insured
· Cumulative Bonus
· Health Check-up program

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· Recovery Benefit
· Benefit for Hospital Room Choice
· Second E-Opinion on Critical Illness
· Worldwide Emergency Assistance Services
· Chronic Management Program
· Health Returns™
· Wellness Coach
· OPD Expenses
· Deductible
· Maternity, Newborn and Vaccination Expenses
· Hospital Cash Benefit
· Also in this plan, one get zone based premium which ensures that they get the best possible
cover.
Group Activ Health
· This is a highly customizable group premium plan which allows the covers to be tailored to
the insured’s needs as it has many optional covers under this plan. ABHICL has ensured that this
plan has very simple documentation with benefits of cashless settlements.
Group Activ Secure
Under this plan for the following cases the company pays a lump sum amount to cover damages
to the client or their family:
• Accidents
• Critical Illness
• Hospitalization
This plan is a fixed health plan and covers only the above situations. The amount given is based on the
premium and other customizations. ABHICL is also planning to introduce a chronic care management
program to cater to the unmet needs of a growing Indian population of those suffering from five chronic
lifestyle conditions.
Reasons to Choose Aditya Birla Health Insurance
• Additional benefits such as Wellness Coaching, Health Returns, etc.
• Rewards for maintaining a healthy lifestyle
• Floater benefit in most insurance policies
• Multiple plans (critical illness, hospital cash, personal accident, etc.) under a single brand
• Plenty of add-on covers to enhance overall protection

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Why Aditya Birla Health Insurance Is Different From Others?
ADITYA BIRLA HEALTH
INSURANCE CO. LIMITED
OTHER INSURANCE
COMPANIES
HOSPITRALIZATION BENEFITS HOSPITALIZATION BENEFITS
CASHLESS CLAIMS CASHLESS CLAIMS
HEALTH RETURNS ----
CHRONIC MANAGEMENT
PROGRAM
----
HOSPITALIZATION BENEFITS:
Aditya birla health insurance plans not only to offer free and post hospitalization expenses
coverage but also as per your plan you can also avail cover for extra treatments like ICU charges,
medical charges, and other patients treatments.
CASHLESS CLAIM
Cashless is a mechanism wherein if a patient is treated within a hospital which is on the panel of the
insurance company, then an insurance company settles either the part of the claim or the
entire claim directly with the hospital. This requires a patient not to pay any amount, at the hospital, for
the treatment.
HEALTH RETURNS
At Aditya Birla health insurance, we take special efforts to help our customers maintain good
health. Hence we offer policy rewards in the form of health returns to our customers as a
motivation to stay fit. Our health returns are monetary rewards that can be accumulated over time
and redeemed as per your needs.
CHRONIC MANAGEMENT PROGRAM
If you or your family member suffer from chronic condition such as ASTHAMA, DIABETES,
BLOOD PRESSURE OR CHOLESTEROL, you would know the challenge involved with such
chronic disease management. These conditions can be managed well through systematic chronic
disease management.To help you manage your chronic condition and to help you live healthy,
our team of experts have designed a special chronic care management program called chronic
management program. It comes inbuilt with your active health platinum cover and includes
coverage for consultation with medical practitioners, diagnostic tests, and medicines.

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COMPETITORS
Apollo Munich Health Insurance Company Limited-
Apollo Munich Health Insurance Company had an outstanding record of Incurred Claim Ratio of
92% for the fiscal year 2018-19, and it has brought additional benefits like portability and
lifelong renewability options in its existing health insurance plans.
Star Health & Allied Insurance Company Limited-
Star Health & Allied Insurance Company recorded the Incurred Claim Ratio of 90% for the
fiscal year 2018-19. The company has an in-house claim settlement procedure to deal with
cashless hospitalization facility. Along with this, Star Health & Allied insurance company comes
up with a range of exciting products that offer protection to Diabetes and HIV+ patients.
Max Bupa Health Insurance Company Limited-
Max Bupa is one of the best-known insurance companies in India, which had an Incurred Claim
Ratio of 96% for the fiscal year 2018-19. This company offers its health insurance policies to
individuals from all age groups.
SBI Health Insurance Company Limited-
SBI Health Insurance Co. Ltd is a joint venture between the State Bank of India (SBI) and
Insurance Australia Group. SBI holds a 74% stake while 26% stake is held by Insurance
Australia Group. It operates out in around 14,000 official branches across the globe. With an
Incurred Claim Ratio of 52.93% for the fiscal year 2018-19, SBI Health Insurance Company has
issued 198876 policies.
Religare Health Insurance Company Limited-
Religare Health Insurance Company limited has shown tremendous growth in a short period of
time, thereby setting a benchmark in the insurance market of India. It had an Incurred Claim
Ratio of 93% for financial year 2018-19. It is being regularly appreciated and promoted by the
Fortis Hospitals.
Manipal Cigna Health Insurance Company Limited-
ManipalCigna Health Insurance Company is comparatively a new player in the Indian insurance
market, as it was launched in 2014 only and immediately fell into the category of the best health
insurance companies in India. Its Incurred Claim Ratio for the fiscal year 2018-19 is 91%.
Bajaj Allianz General Insurance Company Limited-
Bajaj Allianz General Insurance Company has some health products that are very beneficial for
customers from a particular age group. The 3 major health insurance products are Health Guard,
Silver Health, and Star Package. Bajaj Allianz Insurance Company was the first to provide

26
captive TPA services with certain additional benefits. Its Incurred Claim Ratio is 98% for the
fiscal year 2018-19.
New India Assurance Company Limited-
New India Assurance is a fully government-owned entity of India, which has been in operations
since 1919. This company is well-known for its Mediclaim policy. The best feature offered under
this health insurance policy is that it provides different ratings for major metros. It had an
Incurred Claim Ratio of 97% for the fiscal year 2018-19.
Oriental Insurance Company Limited-
Oriental general insurance is also a government-owned general insurance company that offers a
wide range of health insurance products in India. The impressive part of Oriental health
insurance is that it doesn’t require a pre-policy medical test up to the age of 60 years, whereas it
is mandatory under other health insurance providers to get a medical examination done if you are
below 45 years of age. Its Incurred Claim Ratio stood at 89% for the fiscal year 2018-19.
National Insurance Company Limited-
National Insurance Company Ltd. is a full government entity, which has been serving its customers for
more than a century and also provides health insurance coverage. It had an Incurred Claim Ratio of
103.19% for the fiscal year 2018-19. The best health product offered by National General Insurance
Company is Varishtha Mediclaim that offers coverage to senior citizens.

27
EVOLUTION OF HEALTH INSURANCE
The concept of Health Insurance was proposed in the year 1694 by Hugh the elder Chamberlen
from Peter Chamberlen family. In 19th Century “Accident Assurance” began to be available
which operated much like modern disability insurance. This payment model continued until the
start of 20th century. During the middle to late 20th century traditional disability insurance
evolved in to modern health insurance programs. Today, most comprehensive health insurance
programs cover the cost of routine, preventive and emergency health care procedures and also
most prescription drugs. But this is not always the case.
Healthcare in India is in a state of enormous transition: increased income and health
consciousness among the majority of the classes, price liberalization, reduction in bureaucracy,
and the introduction of private healthcare financing drive the change.
Over the last 50 years, India has achieved a lot in terms of health insurance. Before
independence, the health structure was in dismal condition i.e. high morbidity and high mortality
and prevalence of infectious diseases. Since independence, emphasis has been put on primary
health care and we made considerable progress in improving the health status of the country. But
still, India is way behind many fast-developing countries such as China, Vietnam and Sri Lanka
in health indicators.
Health insurance, which remains highly underdeveloped and less significant segment of the
product portfolios, is now emerging as a tool to manage financial needs of people to seek health
services.
The new economic policy and liberalization process followed by Government of India since
1991 paved the way for privatization of insurance sector in the country. The Insurance
Regulatory and Development Authority (IRDA) bill, passed in Indian parliament, is the
important beginning of changes having significant implications for the health sector.
Health Insurance is more complex than other segments of insurance business because of serious
conflicts arising out of adverse selection, moral hazard, unavailability of data and information
gap problems. Health sector policy formulation, assessment and implementation are an
extremely complex task, especially, in changing epidemiological, institutional, technological and
political scenario. Proper understanding of Indian Health situation and application of principles
of insurance, keeping in view the social realities and national objectives, are important.

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INSURANCE INDUSTRY PROFILE
The insurance industry of India consists of 57 insurance companies of which 24 are in life insurance
business and 33 are non-life insurers. Among the non-life insurers there are six public sector insurers. In
addition to these, there is sole national re-insurer, namely, General Insurance Corporation of India (GIC
Re). Other stakeholders in Indian Insurance market include agents (individual and corporate), brokers,
surveyors and third-party administrators servicing health insurance claims.
MARKET SIZE
Government's policy of insuring the uninsured has gradually pushed insurance penetration in the country
and proliferation of insurance schemes.
Gross premiums written in India reached Rs 5.53 trillion (US$ 94.48 billion) in FY18, with Rs 4.58
trillion (US$ 71.1 billion) from life insurance and Rs 1.51 trillion (US$ 23.38 billion) from non-life
insurance. Overall insurance penetration (premiums as % of GDP) in India reached 3.69 per cent in 2017
from 2.71 per cent in 2001.
In FY19 (up to October 2018), premium from new life insurance business increased 3.66 per cent year-
on-year to Rs 1.09 trillion (US$ 15.46 billion). In FY19 (up to October 2018), gross direct premiums of
non-life insurers reached Rs 962.05 billion (US$ 13.71 billion), showing a year-on-year growth rate of
12.40 per cent.

29
INVESTMENTS AND RECENT DEVELOPMENTS
The following are some of the major investments and developments in the Indian insurance sector.
• As of November 2018, HDFC Ergo is in advanced talks to acquire Apollo Munich Health
Insurance at a valuation of around Rs 2,600 crore (US$ 370.05 million).
• In October 2018, Indian e-commerce major Flipkart entered the insurance space in
partnership with Bajaj Allianz to offer mobile insurance.
• In August 2018, a consortium of WestBridge Capital, billionaire investor Mr Rakesh
Jhunjunwala announced that it would acquire India’s largest health insurer Star Health
and Allied Insurance in a deal estimated at around US$ 1 billion.
• In September 2018, HDFC Ergo launched ‘E@Secure’ a cyber insurance policy for
individuals.
• Insurance sector companies in India raised around Rs 434.3 billion (US$ 6.7 billion)
through public issues in 2017.
• In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth
US$ 903 million.
• India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture with
Ebix Inc to build a robust insurance distribution network in the country through a new
distribution exchange platform
GOVERNMENT INITIATIVES
The Government of India has taken a number of initiatives to boost the insurance industry. Some of them
are as follows:
• In September 2018, National Health Protection Scheme was launched under Ayushman
Bharat to provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million
vulnerable families. The scheme is expected to increase penetration of health insurance in
India from 34 per cent to 50 per cent.
• Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima Yojana
(PMFBY) in 2017-18.
• The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue
redesigned initial public offering (IPO) guidelines for insurance companies in India,
which are to looking to divest equity through the IPO route.
• IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds
that are issued by banks to augment their tier 1 capital, in order to expand the pool of
eligible investors for the banks.

30
HEALTH INSURANCE SCENARIO IN INDIA
Health is a human right. It’s accessibility and affordability have to be ensured. The escalating cost of
medical treatment is beyond the reach of common man. While well to do segment of the population both
in Rural and Urban areas have accessibility and affordability towards medical care, the same cannot be
said about the people who belong to the poor segment of the society.
Health care has always been a problem area for India, a nation with a large population and larger
percentage of this population living in urban slums and in rural area, below the poverty line. The
government and people have started exploring various health financing options to manage problem
arising out of increasing cost of care and changing epidemiological pattern of diseases.
In the light of escalating health care costs, coupled with demand for health care services, lack of easy
access of people from low income group to quality health care, health insurance is emerging as an
alternative mechanism for financing health care.
Indian health financing scene raises number of challenges, which are:

31
• Increase in health care costs.
• High financial burden on poor eroding their incomes.
• Need for long term and nursing care for senior citizens because of increasing nuclear family
system .
• Increasing burden of new diseases and health risks.
• Due to under-funding of government health care, preventive and primary care and public health
functions have been neglected.
In the above scenario, exploring health financing options became critical. Naturally, health insurance has
emerged as one of the financing options to overcome some of the problems of our system.
In simple terms, health insurance can be defined as a contract where an individual or group purchases in
advance health coverage by paying a fee called “premium”. Health insurance refers to a wide variety of
policies. These range from policies that cover the cost of doctors and hospitals to those that meet a
specific need, such as paying for long term care. Even disability insurance, which replaces lost income if
you cannot work because of illness or accident, is considered health insurance, even though it is not
specifically for medical expenses.
Health insurance is very well established in many countries, but in India it still remains an untapped
market. Less than 15% of India’s 1.1 billion people are covered through health insurance. And most of it
covers only government employees. At any given point of time, 40 to 50 million people are on medication
for major sickness and share of public financing in total health care is just about 1% of GDP. Over 80%
of health financing is private financing, much of which is out of pocket payments and not by any pre-
payment schemes. Given the health financing and demand scenario, health insurance has a wider scope in
present day situation in India. However, it requires careful and significant efforts to tap Indian health
insurance market with proper understanding and training.
VARIOUS HEALTH INSURANCE PRODUCTS AVAILABLE IN INDIA-
The existing health insurance schemes available in India can be broadly categorized as:
1. Voluntary health insurance schemes or private-for-profit schemes
2. Mandatory health insurance schemes or government run schemes (namely ESIS, CGHS)
3. Insurance offered by NGOs/Community based health insurance
4. Employer based schemes
1. Voluntary health insurance schemes or private-for-profit schemes:
In private insurance, buyers are willing to pay premium to an insurance company that pools similar risks
and insures them for health related expenses. The main distinction is that the premiums are set at a level,
which are based on assessment of risk status of the consumer (or of the group of employees) and the level
of benefits provided, rather than as a proportion of consumer’s income.
In the public sector, the General Insurance Corporation (GIC) and its four subsidiary companies (National
Insurance Corporation, New India Assurance Company, Oriental Insurance Company and United
Insurance Company) provide voluntary insurance schemes.
The most popular health insurance cover offered by GIC is Mediclaim policy

32
• Mediclaim policy
It was introduced in 1986. It reimburses the hospitalization expenses owing to illness or injury suffered by
the insured, whether the hospitalization is domiciliary or otherwise. It does not cover outpatient
treatments. Government has exempted the premium paid by individuals from their taxable income.
Because of high premiums it has remained limited to middle class, urban tax payer segment of population.
• Some of the various other voluntary health insurance schemes available in the market are :- Asha deep
plan II , Jeevan Asha plan II, Jan Arogya policy, Raja Rajeswari policy, Overseas Mediclaim policy,
Cancer Insurance policy, Bhavishya Arogya policy, Dreaded disease policy, Health Guard, Critical illness
policy, Group Health insurance policy, Shakti Shield etc.
• At present Health insurance is provided mainly in the form of riders. There are very few pure health
insurance policies under voluntary health insurance schemes.
Mandatory health insurance schemes or government run schemes (namely
ESIS, CGHS0)
Employer State Insurance Scheme (ESI):-
Enacted in 1948, the employers’ state insurance (ESI) Act was the first major legislation on social
security in India. The scheme applies to power using factories employing 10 persons or more and non-
power & other specified establishments employing 20 persons or more. It covers employees and the
dependents against loss of wages due to sickness, maternity, disability and death due to employment
injury. It also covers funeral expenses and rehabilitation allowance. Medical care comprises outpatient
care, hospitalization, medicines and specialist care. These services are provided through network of ESIS
facilities, public care centers, non-governmental organizations (NGOs) and empanelled private
practitioners. The ESIS is financed by three way contributions from employers, employees and the state
government.
Even though the scheme is formulated well there are problem areas in managing this scheme. Some of the
problems are :-
• Large numbers of posts of medical staff remain vacant due to high turnover and low
remuneration compared to corporate hospitals.
• Rising costs and technological advancement in super specialty treatment.
• Management information is not satisfactory.
• The patients are not satisfied with the services they get
• Low utilization of the hospitals
• In rural areas, the access to services is also a problem
All these problems indicate an urgent need for reforms in the ESIS Scheme.

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1.Central Government Health Insurance Scheme (CGHS):-
Established in 1954, the CGHS covers employees and retirees of the central government and certain
autonomous and semi-autonomous and semi-government organizations. It also covers Members of
Parliament, Governors, accredited journalists and members of general public in some specified areas.
Benefits under the scheme include medical care, home visits/care, free medicines and diagnostic services.
These services are provided through public facilities with some specialized treatment (with
reimbursement ceilings) being permissible at private facilities. Most of the expenditure is met by the
central government as only 12% is the share of contribution.
• The CGHS has been criticized from the point of view of quality and accessibility. Subscribers
have complained of high out of pocket expenses due to slow reimbursement and incomplete
coverage for private health care (as only 80% of the cost is reimbursed if referral is made to
private facility, when such facilities are not available with the CGHS).
2.Universal Health Insurance Scheme (UHIS):-
For providing financial risk protection to the poor, the government announced UHIS in 2003. Under this
scheme, for a premium of Rs. 165 per year per person, Rs.248 for a family of five and Rs.330 for a family
of seven , health care for sum assured of Rs. 30000/- was provided. This scheme has been made eligible
for below poverty line families only. To make the scheme more saleable, the insurance companies
provided for a floater clause that made any member of family eligible as against mediclaim policy which
is for an individual member. In spite of all these, the scheme was not successful.
• The reasons for failing to attract rural poor are many :-
• The public sector companies who where required to implement this scheme find it to be
potentially loss making and do not i
• Invest in propagating it. To meet the target, it is learnt that several field officers pay the premium
under fictious names.
• Identification of eligible families is a difficult task
• Poor find it difficult to pay the entire premium at one time for future benefit, foregoing current
consumption needs.
• Paper work required to settle the claims is cumbersome
• Deficit in availability of service providers
• Set back due to health insurance companies refusing to renew the previous year’s policies.
3. Insurance offered by NGOs/Community based health insurance
Community based schemes are typically targeted at poorer population living in communities. Such
schemes are generally run by charitable trusts or non-governmental organizations (NGOs). In these
schemes the members prepay a set amount each year for specified services. The premia are usually flat
rate (not income related) and therefore not progressive. The benefits offered are mainly in terms of
preventive care, though ambulatory and inpatient care is also covered. Such schemes tend to be financed
through patient collection, government grants and donations. Increasingly in India, CBHI schemes are
negotiating with for profit insurers for the purchase of custom designed group insurance policies.

34
• CBHI schemes suffer from poor design and management. Often there is a problem of adverse
selection as premiums are not based on assessment of individual risk status. These schemes fail to
include the poorest of the poor. They have low membership and require extensive financial
support. Other issues relate to sustainability and replication of such schemes.
• Some of the popular Community Based Health Insurance schemes are: - Self-Employed
Women’s Association (SEWA), Tribuvandas Foundation (TF), The Mullur Milk Co-operative,
Sewagram, Action for Community Organization, Rehabilitation and Development (ACCORD),
Voluntary Health Services (VHS) etc.
4.Employer based schemes
Employers in both public and private sector offers employer-based insurance schemes through their own
employer. These facilities are by way of lump sum payments, reimbursement of employees’ health
expenditure for out-patient care and hospitalization, fixed medical allowance or covering them under the
group health insurance schemes.
The Railways, Defense and Security forces, Plantation sector and Mining sector run their own
health services for employees and their families.
• Increase in health care costs.
• High financial burden on poor eroding their incomes.
• Need for long term and nursing care for senior citizens because of increasing nuclear family
system .
• Increasing burden of new diseases and health risks.
• Due to under-funding of government health care, preventive and primary care and public health
functions have been neglected.
In the above scenario, exploring health financing options became critical. Naturally, health insurance has
emerged as one of the financing options to overcome some of the problems of our system.
In simple terms, health insurance can be defined as a contract where an individual or group purchases in
advance health coverage by paying a fee called “premium”. Health insurance refers to a wide variety of
policies. These range from policies that cover the cost of doctors and hospitals to those that meet a
specific need, such as paying for long term care. Even disability insurance, which replaces lost income if
you cannot work because of illness or accident, is considered health insurance, even though it is not
specifically for medical expenses.
Health insurance is very well established in many countries, but in India it still remains an untapped
market. Less than 15% of India’s 1.1 billion people are covered through health insurance. And most of it
covers only government employees. At any given point of time, 40 to 50 million people are on medication
for major sickness and share of public financing in total health care is just about 1% of GDP. Over 80%
of health financing is private financing, much of which is out of pocket payments and not by any pre-
payment schemes. Given the health financing and demand scenario, health insurance has a wider scope in
present day situation in India. However, it requires careful and significant efforts to tap Indian health
insurance market with proper understanding and training.

35
Types of Insurance
Risk is everywhere: When you drive your car to work, when you visit a new country, when you
ride your bike to a nearby shop, when there’s a new bug going around in town.There are two
broad types of insurance:
• Life Insurance
• General Insurance
Life Insurance
Life insurance is a contract that offers financial compensation in case of death or disability.
Some life insurance policies even offer financial compensation after retirement or a certain
period of time. Life insurance, thus, helps you secure your family’s financial security even in
your absence. You either make a lump-sum payment while purchasing a life insurance policy or
make periodic payments to the insurer. These are known as premiums. In exchange, your insurer
promises to pay an assured sum to your family in the event of death, disability or at a set time.
Types of General Insurance available
1. Health Insurance
2. Motor Insurance
3. Travel Insurance
4. Home Insurance
5. Fire Insurance
Health Insurance
This type of general insurance covers the cost of medical care. It pays for or reimburses the amount you
pay towards the treatment of any injury or illness.It usually covers:
• Hospitalization
• The treatment of critical illnesses
• Medical bills prior to or post hospitalization
• Day care procedures like Cataract operations
You can also opt for add-on benefits like:
• Maternity cover: Your health insurance covers you for the costs related to childbirth. This
includes pre-delivery check-ups, hospitalization during delivery, and post-natal care.
• Pre-existing diseases cover: Your health insurance takes care of the treatment of diseases you
may have before buying the health insurance policy.
• Accident cover: Your health insurance can pay for the medical treatment of injuries caused due to
accidents and mishaps.

36
Home Insurance
Home insurance is a cover that pays or compensates you for damage to your home due to natural calamities,
man-made disasters or other threats.
It covers liabilities due to fire, burglary, theft, flood, earthquakes, and sabotage. It not only offers financial
protection to your home, but also takes care of the valuables inside the property.
Travel insurance
A travel insurance compensates you or pays for any financial liabilities arising out of medical and non-
medical emergencies during your travel abroad or within the country.
Travel insurance usually cover
• Loss of baggage
• Emergency medical expenses
• Loss of passport
• Hijacking
• Delayed flights
• Accidental death
Fire Insurance
Fire insurance pays or compensates for the damages caused to your property or goods due to fire.
It covers the replacement, reconstruction or repair expenses of the insured property as well as the
surrounding structures.
It also covers the damages caused to a third-party property due to fire.
In addition to these, it takes care of the expenses of those whose livelihood has been affected due to fire.
Motor Insurance
Motor insurance is for your car or bike what health insurance is for your health.
It is a general insurance cover that offers financial protection to your vehicles from loss due to accidents,
damage, theft, fire or natural calamities. You can also get motor insurance for your commercial vehicles.In
India, you cannot drive or ride without motor insurance.Let’s look at the two key types:
1. Car Insurance
It’s precious—your car. You paid lakhs of rupees to buy that beauty. Even a single scratch can be painful,
forget about bigger damages.Car insurance can reduce this pain for a few thousand rupees.
2. Two-wheeler Insurance
This is your bike’s guardian angel. It’s similar to Car insurance.You cannot ride a bike or scooter in India
without insurance.As with car insurance, what the insurer will pay depends on the type of insurance and
what it covers.

37
TAX LAWS AFFECTING INSURANCE INDUSTRY
Income Tax Act, 1961
It is tax on income imposed by Central Government. Residents in India are taxed on their
worldwide income. Non- residents are taxed on Indian source of income. The Indian tax rates
applicable to non-residents could be up to 40% (excluding applicable surcharge). If the tax
payable by any company, including a foreign company taxable in India, is less than 18.5% of its
book profits, it will be required to pay Minimum Alternate Tax. Interest received by a non-
resident from India on foreign currency denominated loans may be taxable. Payments towards
royalty and fees for technical services are taxable. u/s. 10(10D) of the Income Tax Act, 1961 any
sum received under a life insurance policy, including the sum allocated by way of bonus on such
policies is exempted from income tax. There-fore any claims or maturity proceeds received by
the resident policy holder will not be taxable as income. Section 80C of the Act provides for
deduction in respect of payments for life insurance premium in computing the total income of an
individual or a Hindu Undivided Family. The amount of deduction is subject to the maximum of
Rupees one lakh being the aggregate of sums referred to in sub-section (2) of Section
80C.Section 88 of the Act provides for a rebate on life insurance premium paid on the policy to
the policyholder.
Service Tax
Under the current service tax regime, service tax leviable on service provided by an insurance
agent is not to be paid by the insurance agent himself but by the insurance company. Life
Insurance premium is taxable as per the provisions of Service Tax.
Tax benefit for tax paid on Insurance premium
Premium paid for life and medical insurance policies can be used to claim tax benefit under
Section 80C and Section 80D of the Income Tax Act.
Normally, the total amount that a person pays to buy/ keep in force a life or medical insurance
policy also includes the GST paid on the premium. The GST is calculated as a percentage of the
premium and can often be a substantial amount. So, it becomes important for you to understand
how much GST is applicable on life and non-life insurance premiums, and whether the GST paid
with the basic insurance premium qualifies for getting tax benefit.
"Section 80C and Section 80D of Income tax Act entitles specified taxpayers to claim deduction
for the entire amount paid to the insurance company for specified insurance schemes. GST being
an indirect tax is charged/recovered by the supplier of services from the recipient with actual
value of service. Thereby, a collective reading of income tax and GST laws would echo that
entire amount paid to the insurance company including applicable GST would be allowed as a
deduction."

38
GST paid on health insurance-
GST of 18 per cent is charged on the premium paid for health insurance, as per the prevailing
regulations. Tax benefit can be claimed under section 80D of the Income Tax Act for the
payment made for health insurance policies.
For instance, if you purchase a health insurance policy with a sum insured of Rs 10 lakh at the
age of 30 years from Bajaj Allianz General Insurance company, you would have to pay a basic
premium of Rs 7,843 and GST of Rs 1,412 (18 percent GST is applied on basic premium). The
overall premium will add up to Rs 9,255. Similarly, if someone purchases the same policy at the
age of 50, then s/he will have to pay a basic premium of Rs 17,782 and GST of Rs 3,200. The
overall premium will come to Rs 20,983.
Thus, a substantial amount of GST, which is applicable to the basic premiums, in both the cases,
can be claimed for getting tax saving deduction benefit under section 80D. Therefore, in each
case, you can claim the total premium of Rs 9,255 or Rs 20,983 under section 80D. This tax
saving deduction amount is subjected to an investment limit available under the particular
section. It is contractually provided (in the policy document/renewal intimations etc.) that GST
would be recovered in addition to the premium. Accordingly, without the payment of GST, the
obligation of the policyholder would not be discharged, i.e., the policy will not be active. "As an
investor, you should know that the income-tax law is widely worded so as to provide a deduction
for any sums paid to effect or to keep in force a contract of insurance on the life of a specified
person. Accordingly, a component of GST as an element of the premium is eligible for deduction
subject to an overall cap of the Section. Also, principally the logic for section 80D would remain
same as for section 80C. Without the payment of GST, the obligation of the assesse would not be
discharged
Types of product GST applied on GST
applied
%
Total premium* can be
claimed for tax benefit
(under section)
Health insurance Basic insurance premium 18 80D
Term insurance Basic insurance premium 18 80C
ULIPs Charges like fund,
Management Charges and
Mortality Charges
18 80C
Traditional plans like endowment policy, money
back policy, whole-life, policies and pension
products
First-year insurance
premium, Second year
insurance premium
4.25,2.2
5
80C
*Total premium equals to basic premium plus GST.

39
Tax Benefits under Section 80C
Section 80C was introduced by the Finance Act 2005. It provides deduction from total income in respect
of various investments/expenditure/payments explained below. The total deduction under this section
(along with section 80CCC and 80CCD) is limited to Rs. 1.50 lakhs maximum.
Instruments that can give you Section 80C benefits are as follows.
• Life Insurance Premium
• for an individual, policy must be in self or spouse’s or any child’s name.
• For HUF, it may be on life of any member of HUF
• Sum paid under contract for Deferred Annuity/Pension Plan
• for an individual, on life of self, spouse or any child
• Sum deducted from salary payable to Govt. Servant for securing deferred annuity
• for self or spouse or child
• payment is limited to 20% of salary
• Employee’s Provident Fund Scheme contribution
• PPF Contribution
• Contribution by employee to a Recognized Provident Fund.
• Sum deposited in 10 year/15 year account of Post Office Saving Bank
• Subscription to any Notified Securities/Notified Deposits scheme. e.g. NSS
• Subscription to any Notified Savings Certificate, Unit Linked Savings Certificates e.g.
NSC VIII issue.
• Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989
• Contribution to notified deposit scheme/Pension fund set up by the National Housing
Scheme.
• Certain payment made by way of installment or part payment of loan taken for
purchase/construction of residential house property.
• Condition has been laid that in case the property is transferred before the expiry of 5
years from the end of the financial year in which possession of such property is
obtained by him, the aggregate amount of deduction of income so allowed for
various years shall be liable to tax in that year.
• Contribution to Notified Annuity Plan of LIC (e.g. Jeevan Dhara) or Units of UTI or a
Notified Mutual Fund.
• Subscription to units of a Mutual Fund notified u/s 10(23D).
• Subscription to Deposit Scheme of a PSU engaged in providing Housing Finance.
• Subscription to Equity Shares/Debentures forming part of any approved eligible issue of
capital made by a public company or public financial institutions.
• Tuition fees paid at the time of admission or otherwise to any school, college, university or
other educational institution situated within India for the purpose of full time education of
any two children.
• available in respect of any two children maximum

40
To avail of 80C benefit
1. Investment should be in your, your spouse’s or children’s name and you should be the
owner (also called proposer) of the policy to get tax benefits for yourself.
2. Renewal premium for life insurance paid for a policy bought in an earlier year can also get
the same tax benefit.
3. In the case of Pensions & Annuities, if deduction under section 80CCC has been availed
of, then rebate under section 80C would not be allowable.
4. You should be present in India when you apply for the life insurance policy.
5. Any such life insurance policy should have been payable as well as paid in the said period.
i.e. you cannot pay next year’s due premium this year, or last year’s overdue premium this
year to claim the benefit.
6. Ensure that the Life Insurance cover (Sum Assured) of the policy is at least 10 times that
of your Annual Premium in the year of premium payment.
Tax Benefits under Section 80CCC-
This tax benefit is available for premium payments made towards a pension/deferred annuity plan. The
benefit under this section, along with all other investments of 80C, is limited to the 80C limit of Rs. 1.50
lakhs per annum.
Tax Benefits under Section 80D-
This tax benefit is available for premium payments made to cover a medical/health insurance policy
including individual, family floater, critical illness, etc. which are non-investment products. Unlike
80CCC above, the 80D limit is exclusive, i.e. over and above the Rs. 1.50 lakhs limit of Section 80C. You
can claim both of them.
1. Deduction under Section 80D is now available up to Rs. 15,000 in a financial year for
insurance of self, spouse and dependent children. For senior citizens the limit is Rs,
20,000.
2. In addition to that, a deduction for insurance of parents (either father or mother, or even
both) is available to the extent of Rs. 20,000 in a financial year if parents are senior
citizens and Rs. 15,000 in other cases.
Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000 in a financial
year.
1. From FY 2012-2013 (i.e. AY 2013-14) within the existing limit a deduction of up to Rs.
5,000 for preventive health check-up is available.

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Note-
1. Both individuals and HUF are allowed to claim this benefit.
2. Premiums cannot be paid in cash.
3. In case you are buying the health insurance policy for a period of more than one year, the
renewal premiums you pay will also be eligible for the tax benefit.
Medical Insurance ( Section 80D )
Medical emergencies always take us by surprise. It is always advised to be safe than sorry and it
is no different when it comes to medical insurance. A must in your investment portfolio, the
government encourages everyone to buy medical insurance and allows you to avail tax
deductions on it under Section 80D.
1. Applicability of Section 80D
Every individual or HUF can claim a deduction under Section 80D for their medical insurance
which is taken from their total income in any given year. In this article, we will talk about the
deduction available for the FY 2018-19. Not only can you take benefit by purchasing a health
plan for yourself but also you can take the benefit by purchasing the policy to insure your spouse,
or your dependent children or parent. And the best part is, that it is over & above the deductions
claimed under section 80C/CCC/CCD.
2. Quantum of Deduction available under Section 80D
Individual:
An individual can claim a deduction of up to Rs 25,000 for the insurance of self, spouse, and
dependent children. An additional deduction for the insurance of parents is available to the extent
of Rs 25,000 if they are less than 60 years of age, or Rs 50,000 (as per the Budget 2018) if your
parents are aged above 60.
If both the taxpayer and the parent whom the medical covers have been taken for are aged more
than 60 years, the maximum deduction that can be availed under this section is to the extent of
Rs.100,000.
The below table captures the quantum of deduction available to an individual taxpayer under
various scenarios:

42
Scenario Premium paid Deduction
under 80D
Self, family,
children
Parents
Individual and parents below 60 years 25,000 25,000 50,000
Individual and family below 60 years
but parents above 60 years
25,000 50,000 75,000
Both individual, family and parents
above 60 years
50,000 50,000 1,00,000
Members of HUF 25,000 25,000 25,000
Non-resident individual 25,000 25,000 25,000
Note: Senior citizen will also include very senior citizen
Example:
Rohan is aged 45 and his father is aged 65 years. Rohan has taken a medical cover for himself
and his father for which he pays insurance of Rs.30,000 and Rs.35,000 respectively. What would
be the maximum amount he can claim by way of a deduction under Section 80D for FY 2018-
19?
Ans: Rohan can claim up to Rs 25,000, for the premium paid on his policy.
As for the policy taken for his father, who is a senior citizen, Rohan can claim up to Rs.50,000.
In the given case, the deduction is Rs 25,000 and Rs 35,000. Therefore, the total deduction that
he can claim for the year is Rs.60,000.
HUF-
An HUF can claim a deduction under section 80D for a mediclaim taken for any of the members
of the HUF. This deduction will be Rs.25,000 if the member insured is less than 60 years, and
will be Rs.30,000 (increased to Rs.50,000 in Budget 2018) if the insured is 60 years of age or
more.

43
3. Preventive Health Check-up-
Any payments made towards preventive health check-ups will entitle a taxpayer to a deduction
of up to Rs.5,000, which is within the overall limit of Rs.25,000 / Rs.30,000 (Rs.50,000 w.e.f. 1
April 2018) as the case may be. This deduction can also be claimed either by the individual for
himself, spouse, dependent children or parents. The payment for preventive health check-up can
be made in cash.Example 1: Rahul has paid a health insurance premium of Rs.23,000 for the
insurance of the health of his wife and dependent children in the financial year 2017-18. He also
got a health check-up done for himself and paid Rs.5,000.
Rahul can claim a maximum deduction of Rs.25,000 under Section 80D of the Income Tax Act.
Rs.23,000 has been allowed towards insurance premium paid, and Rs.2,000 has been allowed for
a health check-up. The deduction towards preventive health check-up has been restricted to
RS.2,000 as the overall deduction cannot exceed Rs.25,000 in this case.
4. Single Premium Health Insurance Policies-
Budget 2018 has introduced a new provision for claiming a deduction with regards to single
premium health insurance policies. Under the new provision, where a taxpayer has made a
lumpsum premium payment in a single year for a policy valid for more than one year, he can
claim a deduction equal to the appropriate fraction of the amount, under Section 80D.
The appropriate fraction is arrived at, by dividing the lump sum premium paid, by the number of
years of the policy. However, this would again be subject to the limits of Rs.25,000 of Rs.50,000
as the case may be. Things to keep in mind before investing
a. Contribution towards health insurance plan has to made to a scheme as specified by the
Central Govt./ approved by IRDA.
b. Payment should be made by any mode other than cash.
c. Meaning of Senior citizen- Sr. Citizen means an individual resident in India who is of the age
of 60 yrs or more during the relevant financial year.
d. Premium paid towards a brother, sister, grandparents, aunts, uncles or any other relative
cannot be claimed as a deduction for taking tax benefit.
e. Premium paid on behalf of working children cannot be taken for tax benefit.
f. In the case of part payment by you and a parent, both of you can claim a deduction to the
extent paid by each.
g. The deduction has to be taken without showing the Service Tax and Cess portion from the
premium amount.
h. Group Health Insurance premium provided by the company is not eligible for deduction.

44
Investments in Tax Saving FDs-
Tax-saving FDs are like regular fixed deposits but come with a lock-in period of 5 years and tax break
under Section 80C on investments of up to Rs 1.5 lakh.
Eligibility : Can be opened by Resident Indian individuals.
Liquidity: Fixed Deposits have lock-in period of 5 years.
Rate of Interest : FD interest rate across different banks ranges from 5.5% to 7.75%
Investment Limit: Minimum investment limit is Rs 1000.
Tax Treatment : Interest earned in taxable.
Investments in PPF (Public Provident Fund)-
PPF are long term investments backed by government of India. Deposits made in a PPF account are
eligible for tax deductions under Section 80C.
Eligibility : Can be opened by Resident Indian individuals, salaried and non-salaried individuals. A HUF
cannot open a PPF account.
Liquidity: PPF account have lock-in period of 15 years, but can be further extended by 5 years. Partial
withdrawals are allowed after 7 years.
Rate of Interest : Current interest rate is 8.0% p.a.
Investment Limit: Minimum and maximum investment limit is Rs 500 and Rs 1.5 lakh respectively.
Tax Treatment : Interest earned is tax-free.

45
Investments in EPF (Employee Provident Fund)-
EPF is a retirement benefit scheme that is available to all salaried employees. This amounts to 12% of
basic salary + DA, that is deducted by an employer and deposited in the EPF or other recognized
provident funds.
Eligibility : Can be opened by employee with basic salary greater than 15,000 /month
Liquidity: Can withdraw PF balance after 2 months of leaving job and does not take up employment
within two months with an employer covered by PF Act
Rate of Interest : Interest rate on the EPF is 8.55%.
Investment Limit: Both employer and employee have to contribute a minimum 12% of Basic Pay + D.A.
Tax Treatment :Entire PF balance (including interest) is tax-free, if withdrawn after continuous service of
5 years
Investments in NPS (National Pension System)-
The NPS is a pension scheme that has been started by the Indian Government to allow the unorganized
sector and working professionals to have a pension after retirement. Investments of up to Rs 1.5 lakh can
be used to avail tax deductions under Section 80C
Eligibility : Can be opened by every Indian citizen between the age of 18 and 60
Liquidity: Partial withdrawals are allowed after 15 years but under special conditions
Rate of Returns : Returns rate on the NPS varies between 12% – 14%
Investment Limit: No limit on maximum contribution
Tax Treatment : Employer contributions are tax-free

46
Investments in ULIP (Unit linked Insurance Plans)
ULIPs are a mix of insurance and investment. A part of the invested amount in ULIPs is used to provide
insurance and the rest of the amount is invested in the stock markets. Investments of up to Rs 1.5 lakh in
ULIPs are eligible for tax breaks under Section 80C
Eligibility : An investor can buy ULIP for self or spouse or child
Liquidity: Interest rate varies as it is market linked
Rate of Returns : Return rate on the ULIP varies between 12% – 14%
Investment Limit: No limit on maximum contribution
Tax Treatment : Investment and withdrawals & maturity amount are tax-free
Investments in Sukanya Samriddhi Yojana-
Sukanya Samriddhi Yojana/Scheme is one of the most popular schemes by the Government of India. The
scheme is aimed at the betterment of girl child in the country
Eligibility : Parents/guardians can open an account in the name of a girl child till she attains the age of 10
years
Liquidity: Up to 50% of the deposit amount can be prematurely withdrawn once the girl reaches the age
of 18 years
Rate of Interest : Interest rate on Sukanya Samriddhi Yojana is 8.5%
Investment Limit: Investment is limited to maximum Rs.1,50,000 in a financial year
Tax Treatment : Investment and withdrawals & maturity amount are tax-free
Save on Taxes.

47
Payments eligible for tax saving deductions under Section 80C-
Payments in LIC – Life Insurance Premium
The annual premium paid for life insurance in the name of the taxpayer or the taxpayer’s wife and
children is an eligible tax-saving payment under Section 80C. The deduction is valid only if the premium
is less than 10% of the sum assured.
Payments in Children’s tuition fees
The tuition fee paid for the education of two children is eligible for tax deduction under Section 80C of up
to Rs 1.5 lakh. The fee can be paid to any school, college, university or educational institute situated in
India. The fees have to be for a full-time course only.
Repayment of Home Loan
The repayment of the principal of a loan taken to buy or construct a residential property is eligible for tax
deductions under Section 80C. This deduction is also applicable on stamp duty, registration fees and
transfer expenses.
IMPORTANCE OF HEALTH INSURANCE
The importance of Health Insurance can never be undervalued for the following reasons:
• Provides security to human life which is of prime importance to any individual.
• Closely bonds Insurance Companies, Hospitals, Policyholders and TPAs together for the
benefit of Indian masses.
• An answer to the solution of uncertainties and risks that are prevalent and ever-pervading in
human life.
• Access to quality healthcare.
• Means of savings and a safe investment option.
• Provides financial stability in life.
• A tax-saving instrument that significantly contributes in reduction of tax
deductions.
•Reduces tensions and stress caused on account of hospitalization. • Greatly contributes in
leading a stress-free life.

48
REGULATORY FRAMEWORK
IRDAI
The Insurance Regulatory and Development Authority(IRDAI) was constituted to regulate and develop
insurance business in India. As a key part of its role, it is responsible to protect the rights of policyholders.
In order to create awareness about IRDAI, it's role, duties and responsibilities are stated here under:
• IRDAI provides a certificate of registration to a insurance company.
• IRDAI is responsible for the renewal, modification, withdrawal, suspension or cancellation of this
certificate of registration.
• IRDAI frames regulations on protection of policyholders' interests.
• It offers policyholders the right to voice their complaints against insurers or insurance companies.
• The IRDAI has set up the grievance redressal cell to take up the complaints of the policyholder.
• It specifies the requisite qualifications, code of conduct and practical training for intermediaries or
insurance intermediaries and agents.
• It specifies the code of conduct for surveyors and loss assessors;
• It promotes efficiency in the conduct of insurance businesses;
• It promotes and regulates activities of professional organizations connected with life insurance;
• It levies fees and other charges to carry out the purposes of the IRDAI Act;
• It can call for information from, undertake the inspection of, conduct enquiries and investigations
including the auditing of insurers, intermediaries, insurance intermediaries and other organizations
connected with the business of life insurance;
• It specifies the form and manner in which books of account should be maintained and statements
of accounts should be rendered by insurers and other insurance intermediaries;
• It regulates the investment of funds by insurance companies;
• It regulates the maintenance of margins of solvency;
• It adjudicates disputes between insurers and intermediaries or insurance intermediaries;

49
• It specifies the percentage of premium income of the insurer to finance schemes for the promotion
and regulation of certain specified professional organizations;
• It specifies the percentage of life insurance business to be undertaken by an insurer in the rural or
social sector; and
THIRED PARTY ADMINISTRATION
A Third-Party Administrator (TPA) is an organization which processes claims or provides
cashless facilities as a separate entity. Seen as an outsourcing of claim processing, TPA
processes claims for both retail and corporate policies. The risk of loss incurred remains with the
insurance company. The insurance company usually contracts a reinsurance company to share its
risk. An insurance company hires TPA to manage its claims processing, provider network and
utilization review. While some TPA operates as units of insurance companies, most are often
independent.
TPA is also involved in handling employee benefit plans such as processing retirement plans. Handling
healthcare or employee benefit claims requires using a specialized set of manpower and technology,
therefore hiring a TPA for the same is a more cost-effective method. The Insurance Regulatory and
Development Authority of India (IRDA) defines TPA as a Third-Party Administrator who, for the time
being, is licensed by the Authority, and is engaged, for a fee or remuneration, in the agreement with an
insurance company, for the provision of health services. TPA was introduced by the IRDA in 2001. Being
one of the prominent players in the managed care industry, it has the expertise and capability to
administer all or a portion of the claims process. The services include claims processing, premium
collection, enrollment and cashless processing. Insurance companies setting up its own health plan often
outsource certain responsibilities to a TPA. The TPA acts like a claims adjuster for the insurance
company. In some cases the insurance company sets up an entire department within their own company to
act as TPA as opposed to hiring a commercial TPA company.
ROLE OF TPA IN HEALTH INSURANCE
Large number of the health insurance companies in India suffer losses and have been doing so
for years together. The group health insurance profile is what may cause optimum leakage to the
health insurance companies in India.
TPA was introduced through the notification on TAP Health Insurance regulation 2001 by the
IRDA-their basic role is to function as intermediary between the insurer and the insured and
facilitate the cashless services of insurance .For this service they are paid a fixed percent of
insurance premium as commission . The commission is currently fixed at 5.6 percent of
premium.
The introduction of TPAs is of great help and relief to the insurance companies, which have been
searching for ways and means to get their management expenses in line with the specifications
laid down by the IRDA.
TPA is maintaining a database of policy holders and issue identity cards with unique identification
numbers to them. They also handle all the policy- related issues, including claim settlements for the

50
policy holders Insurance companies (insurers) can now outsource their administrative activities, including
settlement of claims, to third party administrators, who offer such services for a cost. The insurers
remunerate the TPAs; hence, policyholders receive enhanced facilities at no extra cost. Once the policy
has been issued, all the records will be passed on to the TPAs and all further correspondence of the
insured will be with the TPAs and not with the insurance companies The TPA's are expected to provide
value-added services to the consumers, like arranging ambulance services, medicines and supplies,
guiding policy holders for specialized consultation, and providing information about 24- hour help lines,
health facilities, bed availability, organization of lifestyle management and wellbeing programs.
In the middle of 2010, the public sector health insurance companies, namely United India, New
India, Oriental Insurance and moreover National Insurance took a tough stand and penalized
major hospitals where such procedure were taking place. They eliminated these hospitals from
the list from which cashless medical services can be availed by the customers. This caused a lot
of pain to the insured, however the industry woke up to the fact that insurance companies were
being taken for a ride. The 4 public sector health insurance companies then decided to float a
TPA of their own and even do away with the middlemen who were not falling in line. This
action is likely to cut down the frequency of false claims creeping their business. The move has
acquired big support even from the private health insurance companies. The issuer was not of the
public sector health insurance companies alone as well as certain private sector companies have
done away with the practice of TPAs as well as used to process claims through in-house
representatives. The TPA undoubtedly aims to give the health insurance industry the required
boost in India.
THE SERVICES PROVIDED BY TPA ARE AS FOLLOWS:
ID card: TPA provides ID cards to all their policyholders in order to validate their identity at the
time of admission.
The TPA's undertakes "Pre-authorization" before a surgical procedure to ease claim
processing
24 hours customer support services:
The TPA provide assistance through their 24 hrs call center that provides information regarding
policyholder's data, provider network, claim status, benefits available with existing cardholder,
etc All these details are furnished on request.
Cashless Hospitalization:
Each policyholder is provided with a list of empanelled hospitals where in he/she can avail
cashless hospitalization.

51
THE SPECIALIZED FUNCTIONS OF THE TPA INCLUDE:
• The TPA keeps and maintains all the records of medical insurance policies of an insurer.
• The TPA issues identity cards to all the policyholders. The policyholders will have to
show the identity cards to the hospital authorities before availing any services from the
hospital.
• In case of a claim, policyholders will have to inform the TPA on a 24 hr toll- free line
provided by them
• After informing the TPA, the policyholder will be directed to a hospital where the TPA
has a tied up arrangement. However, policyholders have the option to be admitted at
another hospital of their choice in which case, payment will be on reimbursement basis.
• TPA pays for the treatment; they issue an authorization letter to the hospital for the
admission of the policyholder in the hospital.
• At the point of discharge, all the bills will be sent to the TPA while they are tracking the
case of the insured at the hospital.
• TPA makes the payment to the hospital.
• TPA sends all the documents necessary for consideration of claims, along with the bills
to the insurance company.
• The insurance company then reimburses the TPA.

52
CLAIM MANAGEMENT
Health insurance claims management has evolved significantly in India over the past 10 years. Since
the introduction of Mediclaim in the mid 1980s till the advent of TPAs in 2002, claims management
focused primarily on reimbursement claims. With the advent of cashless hospitalization, the entire
claim process changed. New processes, such as prior authorization became vital for providers and
payers. Time, which was not a crucial element in processing reimbursement claims earlier, all of a
sudden became a vital parameter. Frequently the patient was already admitted when an authorization
request reached a TPA, this meant that a response had to be given within 4-6 hours so the full
treatment could commence. Authorization limit enhancements were also sought as the treatment
progressed or as the patient was ready for discharge, they also required an urgent response.
The early claim systems were ad-hoc applications, frequently improvised upon to incorporate the
ever changing multitude of payers / providers requirements, customer expectations and health
insurance products. They were mostly reactive systems, supporting existing products and practices
and not designed to support future requirements. Thus a peculiar chicken and egg scenario existed-
how could an insurer introduce a new product when systems to service it did not exist? A good
claims management system must service existing products well while having the in-built flexibility to
support products with new and unique features, such as outpatient coverage or products with a
savings component. Increased flexibility to incorporate on-the-fly modifications in benefits and
processes, in-built intelligence to standardize routine processes and rules based prompts and alerts
are now available in newer claims system. Not only do they reduce manual intervention and
improve process efficiencies, they can auto adjudicate and process claims which meet all
compliance parameters thus enabling claims staff to provide more time for claims that require
detailed analysis.

53
RESEARCH METHODOLOGY
D.Slesinger and M.Stephenson in the Encyclopedia of Social Sciences define the research as “the
manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or verify
knowledge, whether that knowledge aids in construction of theory or in the practice of an art.” In short,
the research for knowledge through objective and systematic method of finding solution to a problem is
research. The systematic approach concerning generalization and the formulation of a theory is also
research.
Research design provides the glue that the research project together. A designed is used to
structure the research to show how all of the major parts of the research project, the sample or
group measurement ,treatments and methods of assignment work to gather try to central research
question.
Hence, it is clear that research design is the blueprint for researcher it lays down the
methodology involved in the collection of information and answering at meaningful conclusion
from the same.
This classification are made according to the objective of the research ,in some causes the
research will fall in to one of this category but in other cases research will fall in to two
categories.
There are two types of methods of collecting data
1. PRIMARY
2. SECONDARY
PRIMARY DATA:
The main purpose of collection of primary data was to prepared questionnaire. The researcher
tried to find out the awareness and Buying pattern of Health Insurance Through :
Personal Approach
Surveys
Mails
questionnaires
articles ,magazines
telephone ,discussion meeting with Managers, Agents of all the four Health Insurance companies
&customers etc. for this project personal interviews was conducted for collection

54
SECONDARY DATA-
Consists of published data collected through
Books
websites
news papers
journals
magazines
research papers
SAMPLE SIZE
Sample size in this report is 90 and the research tool is questionnaire.
STATISTICAL TOOL
The statistical tool used in this project is Microsoft excel.
RESEARCH GAPS/LIMITATIONS
The research was based on primary and secondary collection of data, there may be chances of
human error and bias.
The research was dependent on the information provided by the respondents who were very
reluctant in providing right information and were careless.
As associated with every project, time and money were the major limitations with project.
Due to unwillingness of providing any information, the respondents filled the questionnaire
casually.
The projection is purely based on verbal meetings with the respondents.
Non-co-operative behavior of respondent was a big problem in this survey.
While studying the report the above facts should be taken into consideration.

55
DATA ANALYSIS AND FINDINGS
Survey has been done to know the Awareness, Preference and consumption pattern of health
insurance. By using Questionnaire method.
SAMPLE SIZE- 90
More than 75% people who responded for questionnaire aged below 25, this represents young
peoples thoughts, awareness regarding health insurance.
In Gender Ratio 52% participant are female and about 48% are male and it shows that female
participant more actively participated.

56
More than 68% participant are student, 12% peoples are employer and 10% people did not
disclosed their occupation, Students are the mainstream of our country and they want to be aware
and always ready to give their suggestion and thoughts regarding topic of their knowledge area.
More than 84% participant earn less than 5 lac, 9% participant earn between 5-10 lac, 4%
participant earn between 10-25 lac and only 1% earn more than 25 lac. It shows that more than
84% participant have low income level.

57
It shows that half of the people don’t have any health insurance policy due to various reasons
like financial capability and unaware about health insurance policy.
More than 35% market is covered by LIC and 30% is not known company only 20% market is
covered by Aditya Birla Health insurance which is very less and ABHI have more market to
cover with policy and provide their best facility to customers.

58
Only 50% people is health insured in which 54% is covered under family floater, 36% under
individual policy and 8% under group Mediclaim policy which shows people need to focus more
on individual health and company need to spread more information among people regarding
health insurance.
People are more focused on service quality, premium outflow, market value and product quality
of the company so company should focus more on these things.

59
More than 54% people buy health insurance by themselves, 22% by insurance agent and 18%
people by seeing advertisement. It shows people buy health insurance by their own awareness
and knowledge.

60
More than 60% people pay their premium yearly and only 39% people pay their premium
monthly.
More than 40% people have health insurance plan subsidized based on their family income and
38% people thinks that plan is may be subsidized as their family income and 20% people are not
aware.

61
60% people believe by opting for halth insurance they can get mediclaim and tax benefit both
which is true.
Only 59% are aware about tax benefit under section 80D and other 40% people are not aware
about tax benefit so government and companies should start campaigning and other necessary
things to spread awareness among people.

62
More than 63% people trust on insurance company for investing their money so this opportunity
for private insurance firms.
More than 68% people are saving from tax between 2000-10000 by investing their money in
health insurance.

63
More than 47% people thinks that it may be government’s strategy to provide tax benefit to
insurance holders for increasing the business of insurance companies, they are not fully sure. In
the other hand only 16% people thinks that it is not possible and more than 36% people are sure
about this strategy of government.

Summer internship program final report

Summer internship program final report

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