Content area
Full Text
This paper intends to study the preferences of customers when purchasing a health insurance policy. It looks at various aspects which a customer may evaluate, before choosing the right health insurance policy for his / her family. Based on a questionnaire survey, customers were asked to rank various attributes as per their perceived importance. The attributes that were examined were, type of the company / firm, purpose, product features, scope of family coverage, mode of purchase, coverage type, coverage amount, disease coverage, additional product features, the service delivery, the claims service model, trust and other value-added services. These views expressed by customers were then further discussed with other stakeholders in the industry. This study provides a holistic view of what customers expect from the health insurance industry and what the industry is prepared to provide.
INTRODUCTION
Health insurance provides benefits for medical expenses or for time lost caused due to Injury or illness. The health insurance coverage made available by insurance companies globally is divided into two categories, medical expenses insurance and disability income insurance. Health Insurance is being practiced in different forms and the basic principles of insurance such as:
(1)utmost good faith,
(2)indemnity,
(3)insurable interest,
(4)subrogation,
(5)contribution and
(6)proximate cause become applicable.
The existing insurance schemes in India can be divided into the following categories:
1. Voluntary health insurance schemes or private for-profit schemes;
2. Employer based schemes;
3. Insurance offered by NGOs / community-based health insurance, and
4. Mandatory health insurance schemes or Government run schemes (namely ESIS, CGHS).
Historically, public sector companies have also not paid attention to developing proper underwriting criteria and they are not required to declare operating results of this product line separately. Despite years of experience, they have not built proper databases and do not carry out systematic analysis amongst other things of disease patterns, regional variations, age-related healthcare spending and / or claim distribution costs. The health portfolio that had a loss ratio of about 78%in 2003 deteriorated to 98% in the following year. These deteriorating loss ratios as well as the competition from new private players are pressuring these companies to more actively manage their portfolios as per Watson Wyatt (2007).
Voluntary private insurance which is often offered as a panacea to battle health...