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INSURANCE

Human life is exposed to many risks, which may result in heavy financial losses.Insurance is one of the devices by which risks may be reduced or eliminated inexchange for premium. In words of Chief Justice Tindal, “Insurance is a contract in

which a sum of money is paid by the assured in consideration of the insurer'sincurring the risk of paying larger sum upon a given contingency”. In its legal

aspects it is a contract whereby one person agrees to indemnify another against aloss which may happen or to pay a sum of money to him on the occurring of a

 particular event. All contracts of insurance (except marine insurance) may beverbal or in writing, but practically contracts of assurance are included in adocument.

DEFINITION

Risk-transfer  mechanism that ensures full or partial financial compensation forthe loss or  damage caused by event(s) beyond the control of the insured party. Under an insurance contract, a party (the insurer ) indemnifies the other party (theinsured) against a specified amount of loss, occurring from specified eventualitieswithin a specified period, provided a fee called premium is paid.In general insurance, compensation is normally proportionate to the loss incurred, whereas in life insurance usually a fixed sum is paid. Some types of insurance(such as product liability insurance) are an essential component of  riskmanagement, and are mandatory in several countries. Insurance,

however, provides protection only against tangible losses. It cannot ensurecontinuity of  business, market share, or  customer  confidence, and cannot

 provide knowledge, skills, or  resources to resume the operations after a disaster. 

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BASIC PRINCIPLES OF INSURANCE

The following are the basic essentials 'or requirements of insurance irrespective ofthe type of insurance concerned.

1. UTMOST GOOD FAITH

All types of contracts of insurance depend upon the contracts of utmost good faith.Both parties (insurer and the insured) in the contract must disclose all materialfacts for the benefit of each other. False information or non-disclosure of anyimportant fact makes the contract avoidable. So the conditions to show utmostgood faith is very strict on the part of the insured.

2. INSURABLE INTEREST

The insured must possess an insurable interest in the object insured. It may bedefined as a financial interest in the subject matter of contract. The presence ofinsurable interest is a legal requirement. So an insurance contract without theexistence of insurable interest is not legally valid and cannot be claimed in a Court.The object of this principle is to prevent insurance from becoming a gamblingcontract.

3. PRINCIPLE OF INDEMNITY

All types of contracts except life and personal accident insurance are contract ofindemnity. According to them, the insurer undertakes to indemnify the insuredagainst a loss of the subject matter of insurance due to insured cause. In lifeassurance the question of loss and, therefore, of its indemnification does not rise.Because the loss of life cannot be estimated in term of money. The principles ofindemnity is based on the idea that the assured in the case of loss only shall becompensated against the actual total loss. But if no event happens, the insured hasnot to receive any amount, so in this case the premiums paid by him becomes the

 profit of the Insurance.

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  4. DOCTRINE OF SUBROGATION

This principle applies to the contract of indemnity only i.e. marine and fire. It laysdown a principle which is quite equitable. According to this doctrine, where a lossoccurs and the insurer pays as for a total loss, he is entitled to all the rights andremedies which the insured has against a third party in respect of loss so paid for. It

 prevents the insured being indemnified from two sources in respect of the sameloss. Suppose „A‟ has damaged „B‟ is motor car negligently. If he pays „B‟ is loss

in full. B cannot collect the same from the insurance company. On the other hand ifB applied to his insurance company for indemnity under his policy, he will not be

 permitted to collect the damages from A. In the latter case the insurance companywill be entitled to collect that amount.

5. DOCTRINE OF PROXIMATE CAUSE

This principle is found very useful when the loss occurred due to series of events.It means that in deciding whether the loss has arisen through any of the risksinsured against, the proximate or the nearest cause should be considered. To takean illustration in one case where a policy holder sustains an accident while hunting.He was unable to walk after the accident and as a result of lying on wet ground

 before being picked up, he suffered pneumonia. There was an unbroken change ofcause between the accident and the death, and the proximate cause of the death,therefore, was the accident and not the pneumonia.

6. CANCELLATION

Both parties have right to cancel the policy before its expiry date. The period of.the policy comes to an end on the cancellation of policy. So the protection

 provided by the insurer to the insured stops from the date of such cancellation. The premium received by the insurance company is also returnable to the insured.

7. ATTACHMENT OF RISK

Without the attachment of definite risk to the policy, the contract of insurance

cannot be in force. So in this case the consideration fails and the premium received by the insurance company must be returned.

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8. MITIGATION OF LOSS

When the event insured against takes place, the policy holder must do every thingto minimize the loss and to save what is left. This principle makes the insured morecareful in respect of this insured property.

9. ARBITRATION

Most fire and accident insurance policies contain an arbitration clause which provides for referring' to differences to an arbitration. The arbitrator is to beappointed in writing by the parties in difference. The object of this clause is toreduce litigation.

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LIC JEEVAN BAHRTI

FEATURES

Introduction 

LIC‟s Jeevan Bharati-I –  is a plan exclusively for women. It is a with profit planhaving special features considering the needs of women. The plan also provides forAccident Benefit, Critical Illness Benefit and Congenital Disability Benefit asoptional Riders

1. SPECIAL FEATURES 

1. Encashment of Survival Benefit as and when needed: The policyholder at her option may avail the survival benefit any time on or after

its due date. If opted to avail later, increased survival benefit at the rate decided bythe corporation from time to time will be payable.

2. Flexibility to pay premiums in advance: The mode of premium payment is only yearly under this plan. However,

 policyholder may pay the next yearly premium in advance in instalments(maximum upto 3 instalments) during the year. If premiums are paid in advance a

 premium rebate may be allowed as may be decided by the Corporation from timeto time

3. Option to receive maturity proceeds in the form of an annuity: : The policyholder shall have the option to receive the maturity proceeds in the formof annuity. The rate of annuity will be based on the annuity rates prevalent at thetime of stipulated Date of Maturity.

4. Auto Cover:: After two years premiums have been paid, whenever premium payment isdiscontinued, the life cover for full sum assured will continue for 3 years from thedue date of first unpaid premium.

If death occurs during the Auto Cover period, then death benefit after deductingunpaid premiums, with interest is payable along with the vested bonus, if any.

The auto cover shall not be available for rider benefits.

2. OPTIONAL RIDERS: 

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The following riders are available under this plan:

A. CRITICAL ILLNESS (CI) RIDER : An amount equal to the Critical Illness Rider Sum Assured will be payable in caseof diagnosis of defined categories of critical illnesses. A person is eligible for this

 benefit upto a maximum age of 60 years but subject to a maximum of the policyterm. This benefit can be availed for a minimum Sum of Rs 50000 and for amaximum Sum equal to the Sum assured under the basic plan subject to themaximum of Rs 5 lakh overall limit taking all critical illness riders under allexisting policies of the Life Assured.

(For details refer the sales brochure of Critical Illness rider)

B. ACCIDENT BENEFIT RIDER: 

An additional amount equal to the Accident Benefit Rider Sum Assured is payableupon death or total and permanent disability due to accident during the policy term.

This benefit can be availed for a minimum sum of Rs 50000 and for a maximumsum equal to the Sum Assured under the Basic Plan subject to the maximum ofRs.50 lakhs.

C. CONGENITAL DISABILITIES BENEFIT (CDB) RIDER: 

This rider can be opted for by a female between the ages of 18yrs and 35 years.An amount equal to 50% of the CDB Sum Assured is payable if the Life Assuredgives birth to a child with specified congenital disabilities. This benefit isavailable for a maximum of two such children and this benefit ceases at the age of40 years.This benefit can be availed for a minimum Sum of Rs 50000 and a maximum sumof Rs 500000.

(For details refer the sales brochure of Congenital Disability Benefit Rider)

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 3. ELIGIBILITY CONDITIONS (For Basic Plan): 

Minimum age at entry : 18 years (completed)

Maximum age at entry : 55 years (nearest birthday)Maximum age at maturity : 70 years (nearest birthday)

Policy term : 15 and 20 years

Minimum Sum Assured : Rs. 50,000/-

Maximum Sum Assured : Rs. 25,00,000/-

(Sum Assured shall be in multiples of Rs.5,000/-)

4. SAMPLE PREMIUM RATES FOR BASIC PLAN : 

Tabular Annual Premium per 1000 SA AGE/TERM 15 20

20 79.35 63.90

25 79.45 64.10

30 79.70 64.55

35 80.25 65.45

36 80.45 65.70

37 80.60 66.00

40 81.35 67.0045 83.15 69.50

50 86.05 73.50

5. HIGH SUM ASSURED REBATES: 

Sum Assured (in Rs)  Rebate per thousand Sum Assured 

1,00,000 to 4, 99,999 Rs 2.00

5, 00,000 and above Rs 4.00

6. LOAN: Loan is available under the plan after the policy acquires paid-up value.

7. GRACE PERIOD: A grace period of one-month but not less than 30 days will be allowed for paymentof premium .

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8. REVIVAL: A. REVIVAL DURING THE AUTO COVER PERIOD:

(i) If Critical Illness Rider is not opted for:During the Auto Cover Period, the Life Assured can pay one or more instalmentsof premiums with interest without submission of any evidence of health. On

 payment of part or full arrears of premiums with interest, the Auto Cover Period of3 years from the due date of new FUP shall again be available during the term ofthe Policy.

If any survival benefit falls due during the above 3-year auto cover period the samewill be paid after deduction of unpaid premiums with interest until the due date ofthe survival benefit, provided it is more than the unpaid premiums with interest. Ifthe survival benefit is insufficient to cover the arrears of premiums with interest upto the due date of such survival benefit, then the survival benefit will be payable

only on payment of such arrears of premiums with interest , during the period ofthe aforesaid 3 years or on revival of the policy thereafter.(ii) If Critical Illness Rider is opted for:During the auto cover period, the policy can be revived by payment of full arrearsof premium together with interest and subject to submission of proof of continuedinsurability of the Life Assured to the satisfaction of the Corporation. TheCorporation reserves the right to accept at original terms, accept at revised terms ordecline the revival of the policy. The revival of the policy shall take effect onlyafter the same is approved by the Corporation and is specifically communicated tothe Life Assured.

If any survival benefit falls due during the above 3-year auto cover period the samewill be paid only after revival of the policy as stated above.

B. REVIVAL OTHER THAN DURING AUTO COVER PERIOD : If the Policy has lapsed, and the policy is not under the period of auto cover, the

 policy can be revived within a period of 5 years from the date of first unpaid premium and before the date of maturity by payment of full arrears of premiumtogether with interest and subject to submission of proof of continued insurability

of the Life Assured to the satisfaction of the Corporation. The Corporation reservesthe right to accept at original terms, accept at revised terms or decline the revivalof a discontinued policy. The revival of discontinued policy shall take effect onlyafter the same is approved by the Corporation and is specifically communicated tothe Life Assured.

The Rider/s shall be revived along with the Basic plan and not in isolation.

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9. PAID UP VALUE:

If after at least three full years‟ premiums have been paid and any subsequent

 premium not paid, this policy shall not be wholly void after the expiry of threeyears Auto Cover Period ,but shall continue as a paid up policy. The Sum Assuredof the policy shall be reduced in the same proportion as the number of premiumsactually paid bears to the total number of premiums stipulated for in the policy ,less any survival benefit paid. This reduced Sum is called the paid up value.

The policy thereafter shall be free from all liabilities for payment of the premiums, but shall not be entitled to the future bonuses. The existing vested reversionary bonuses, if any, will remain attached to the reduced paid-up Policy. This paid upvalue shall be payable on the date of maturity or at Life Assured‟s prior death. Nosurvival benefit shall be payable under paid up policies.

The rider benefits will cease to apply if the policy is in lapsed condition and willnot acquire any paid up value.

10. SURRENDER VALUE: The Guaranteed Surrender value will be available after the expiry of 3 policy years

 provided the premiums have been paid for at least three years. The GuaranteedSurrender Value is equal to 30% of the total amount of premiums paid excludingthe premiums paid for the first year, any premiums paid towards riders, all extra

 premiums that may have been paid less the amount of survival benefits paidearlier. The cash value of any existing bonuses, if ,any will also be paid .

Corporation may, however, pay special surrender value as the discounted value ofPaid up sum assured and vested bonus, if any, as applicable on date of surrender,

 provided the same is higher than guaranteed surrender value.

11. EXCLUSIONS: Suicide: This policy shall be void if the Life Assured commits suicide (whethersane or insane at that time) at any time on or after the date on which the risk underthe policy has commenced but before the expiry of one year from the date ofcommencement of risk under the policy and the Corporation will not entertain any

claim by virtue of this policy except to the extent of a third party‟s bonafide beneficial interest acquired in the policy for valuable consideration of which noticehas been given in writing to the branch where the Policy is being presentlyserviced (where the policy records are kept), at least one calendar month prior todeath.

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12. COOLING OFF PERIOD: If women are not satisfied with the “Terms and Conditions” of the policy, womenmay return the policy to us within 15 days.

Benefits

A. Survival Benefits: On Survival the following benefits are payable:

For 15 Years Term 

20% of the Sum Assured payable at the end of 5 years.20% of the Sum Assured payable at the end of 10 years.60% of the Sum Assured payable together with vested bonus, and Final AdditionalBonus, if any, at the end of 15 years.

For 20 Years Term 

20% of the Sum Assured payable at the end of 5 years.20% of the Sum Assured payable at the end of 10 years.20% of the Sum Assured payable at the end of 15 years.40% of the Sum Assured payable together with vested bonus and Final AdditionalBonus, if any at the end of 20 years.

B. Death Benefit: In case of death of the life assured during the policy term, the full sum assured is

 payable irrespective of the survival benefits paid earlier. The vested bonuses andFinal Additional Bonus, if any are also payable.

Statutory warning: “Some benefits are guaranteed and some benefits are variable with returns based

on the future performance of womenr Insurer carrying on life insurance business. Ifwomenr policy offers guaranteed returns then these will be clearly marked“guaranteed” in the illustration table on this page. If womenr policy offers variablereturns then the illustrations on this page will show two different rates of assumedfuture investment returns. These assumed rates of return are not guaranteed andthey are not the upper or lower limits of what women might get back, as the valueof womenr policy is dependent on a number of factors including future investment performance.” 

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Benefit Illustration 

Age of LA (Yrs.) 35

Term (Yrs.) 20

Sum Assured(Rs.) 100000Annual Premium 6345

End

of

Year 

Total

premiums

paid till

end of

year 

Death Benefit during the year

Guaranteed

Variable Total

Scenario

1

Scenario

2

Scenario

1

Scenario

2

1 6345 100000 2200 4500 102200 104500

2 12690 100000 4400 9000 104400 109000

3 19035 100000 6600 13500 106600 113500

4 25380 100000 8800 18000 108800 118000

5 31725 100000 11000 22500 111000 122500

6 38070 100000 13200 27000 113200 127000

7 44415 100000 15400 31500 115400 131500

8 50760 100000 17600 36000 117600 136000

9 57105 100000 19800 40500 119800 140500

10 63450 100000 22000 45000 122000 145000

15 95175 100000 36667 75000 136667 175000

20 126900 100000 48900 100000 148900 200000

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End

of

Year 

Total

premiums

paid till

end of

year 

BENEFIT ON SURVIVAL / MATURITY AT

THE END OF YEAR

Guaranteed

Variable Total

Scenario

1

Scenario

2

Scenario

1

Scenario

2

1 6345 0 0 0 0 0

2 12690 0 0 0 0 0

3 19035 0 0 0 0 0

4 25380 0 0 0 0 0

5 31725 20000 0 0 20000 20000

6 38070 0 0 0 0 0

7 44415 0 0 0 0 0

8 50760 0 0 0 0 0

9 57105 0 0 0 0 0

10 63450 20000 0 0 20000 20000

15 95175 20000 0 0 20000 20000

20 126900 40000 48900 100000 88900 140000

 Note: i)his illustration is applicable to a standard (from medical, life style and

occupation point of view) life.i) The non-guaranteed benefits (1) and (2) in above illustration are calculated sothat they are consistent with the Projected Investment Rate of Return assumptionof 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in

 preparing this benefit illustration, it is assumed that the Projected Investment Rateof Return that LICI will be able to earn throughout the term of the policy will be6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of Returnis not guaranteed.

Section 45 of Insurance Act, 1938:  No policy of life insurance shall after the expiry of two years from the date onwhich it was effected, be called in question by an insurer on the ground that astatement made in the proposal for insurance or in any report of a medical officer,or referee, or friend of the insured, or in any other document leading to the issue ofthe policy, was inaccurate or false, unless the insurer shows that such statementwas on a material matter or suppressed facts which it was material to disclose and

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that it was fraudulently made by the policyholder and that the policyholder knew atthe time of making it that the statement was false or that it suppressed facts whichit was material to disclose. Provided that nothing in this section shall prevent theinsurer from calling for proof of age at any time if he is entitled to do so, and no

 policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life assured wasincorrectly stated in the proposal.

Prohibition of Rebates (Section 41 of INSURANCE ACT ,1938) : (1) No person shall allow or offer to allow, either directly or indirectly, as aninducement to any person to take out or renew or continue an insurance in respectof any kind of risk relating to lives or property in India, any rebate of the whole or

 part of the commission payable or any rebate of the premium shown on the policynor shall any person taking out or renewing or continuing a policy accept any

rebate except such rebates as may be allowed in accordance with the published prospectuses or tables of the insurer provided that acceptance by an insuranceagent of commission in connection with a policy of life insurance taking out byhimself on his own life shall not be deemed to be acceptance of a rebate of

 premium within the meaning of this sub-section if at the time of such acceptancethe insurance agent satisfies the prescribed conditions establishing that he is a bonafide insurance agent employed by the insurer.

(2) Any person making default in complying with the provision of this Sectionshall be punishable with a fine, which may extend to 500 rupees.

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What Does Life Insurance For Women Cover?

Life insurance for women covers what it does for men –  it is a way of ensuring thatin the event of women death, women will leave women family or dependants with

a lump sum that will allow them to continue with a standard of living that theyenjoyed while women were still here.

As more women than ever are now the main breadwinners in the family, makingsure women have life cover is essential, because if women were to dieunexpectedly or are taken seriously ill, women income –  the main source ofincome –  would cease. This would cause significant problems for women lovedones, who would potentially find themselves out of the family home if they couldno longer afford to meet the mortgage payments.

Despite this, many women still fail to get life cover to protect their family, in somecases it is because they are staying at home to care for their family and don‟t see

their role at home as having any monetary value. But what many stay-at-homemums forget is that the role they have is worth a lot of money, even if they are notspecifically getting paid for doing the work.

It could impact on the household finances further as the main breadwinner couldfind themselves taking time off work to look after the children, which means thatnot only would women family lose the value of the work of one parent, the second

 parent may also see their income reduced as they need to reduce the hours they areworking.

Save money on women life insurance

What types of life insurance is there for women?

Both men and women can get term assurance and whole of life cover. Term

assurance is a policy which is in force for a specific period of time and is usually

sold alongside a mortgage.

Lenders will generally want a way of getting their money back if women die, and

that is why one of the conditions is that women have life cover alongside the

mortgage. Term assurance is perfect for this as it can be in force for as long as the

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mortgage term. So often, these policies are in place for 25 years –  if women die

within this time, women will get a lawwomen. But if women live longer than the

 policy is in place, it will simply expire and women will no longer get a lawwomen

if women die.

There are two types of term assurance: level term and decreasing term. Level term

means the lawwomen that is made if women make a claim within the period the

 policy is in force stays the same throughout the entire policy term.

Decreasing term means the lawwomen will reduce over the term of the policy,

usually this is in line with how the mortgage it is written alongside is reducing over

time. The premiums should also fall as the lawwomen falls. an I take out life

insurance during pregnancy

Life insurance during pregnancy will be no different to a policy women would get

without being pregnant. But women may need to consider some of women answers

to the questions that the insurer bases the premium calculations on.

Women weight, for example, will be higher than normal if women are pregnant. So

women should give the weight that women were immediately before women

 became pregnant.

The amount of alcohol women drink and whether women smoke or not may also is

different –  women would probably not be doing either while women are pregnant –  

so women need to take that into consideration too. How women deal with it will

depend on the questions women are asked, as some policies will be specific about

whether women have recently been advised „for medical reasons‟ to give up

alcohol. This will allow women to explain the reason.

If this is not an option, women should speak to women insurer directly to make

sure women give all of the information that is needed. Not doing so could result in

women policy being deemed invalid.

Once women have children, women may also want to consider taking out a joint

life policy so that if women or women partner or spouse dies, women children will

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 be taken care of. Joint policies are usually cheaper than buying two separate

 policies, and women can have joint life first death or, more rarely, joint life second

death.

With the former, the payment will be made when the first of the two people named

on the policy dies. The latter will only lawwomen when the second person named

on the policy dies, which is why it is rarer.

The difference in premiums for men and women

Historically women have paid less for life insurance than men because statistically

they are likely to live longer and therefore have more time to pay the premiums for

an equivalent lawwomen.

However, from December 2012, a ruling from the European Court of Justice will

 be enforced which will mean it is no longer legal for insurers to base premium

costs solely on gender differences.

Will the cost of life insurance for women rise?

As yet, it is not clear whether prices for women will rise, or they will fall for men,

or they will meet somewhere in the middle.

But if women had a policy in place before December 2012 with fixed premiums,

women should not see any premium increases as a result of the change in the law.

How to reduce the cost of women’s life insurance?

The measures can take as a woman are the same as those taken by a man.

Changing some of the risk factors that insurers base their premium calculations on

will help to cut costs.

For example, if women are obese and women lose weight, women premiums

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should fall. Similarly if women drink less alcohol, or stop smoking and lead a

healthier lifestyle, these will all be looked favorably on by women insurer. Alcohol

consumption, weight and smoking all increase the amount women pay, so

changing any or all of these will cut costs.

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HDFC LIFE SMART WOMAN PLAN

HDFC Life Smart Woman Plan, a life insurance policy for women thatgives wings to your aspirations. The plan ensures your savings grow

leaving you free to pursue your career and continue making a difference

to those around you.

Women always wanted to make a difference in the lives of their lovedones. This is what gives true happiness. In their own way, women did

what it took to keep them happy with their satisfaction always being a priority for you.

 Now that you are independent and have complete charge of yourfinances, some amount of planning can go a long way in fulfillingdreams for yourselves and your loved ones.

Presenting, HDFC Life Smart Woman Plan, a life insurance policy forwomen that give wings to their aspirations. The plan ensures theirsavings grow leaving them free to pursue their career and continuemaking a difference to those around them. It also provided optionswhich cater to specific life events of women with respect to their health,career and marriage.

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FEATURES

Options to choose from 5 funds to suit risk appetite:1. Short-term Fund: Low capital risk as exposure is only to the short  –  

term instruments (Max 3-year residual maturity)

2. Income Fund: Higher potential returns due to higher duration andcredit exposure

3. Balanced Fund: Dynamic equity exposure to enhance the returnswhile the debt allocation reduces the volatility

4. Blue chip Fund: Investments in large cap equities5. Opportunities Fund: Investments in mid-cap equities

  You can select any of the 3 Benefit Options, each created to meetspecific needs such as:

1. Pregnancy complications or birth of child with congenital disorder2. Diagnosis of malignant cancer of female organs

3. Death of spouse (Only with Elite option)  Classic  –   Under this option you can avail of premium waiver benefit

with funding of next 3 years‟ premiums.   Premier  –  Under this option you can avail of premium waiver benefit

with funding of next 3 years‟ premiums and periodic cash payouts of

100% of next 3 years‟ premiums.   Elite –  Under this option you can avail of premium waiver benefit with

funding of next 3 years‟ premiums and periodic cash payouts of 100% of

next 3 years‟ premiums along with coverage for death of spouse.   Flexibility to choose the sum assured  Convenience to choose policy tenure of 10/15 years. 

ADVANTAGES

  Uninterrupted savings with waiver and funding of premiums for next 3

years on the following events1. Pregnancy complications or birth of child with congenital disorder2. Diagnosis of malignant cancer of female organs3. Death of spouse (Only with Elite option)

  Additional periodic cash payouts under Premier and Elite options  Flexibility to make partial withdrawals to meet contingencies

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  Avail of hassle-free annual premium payment option  Tax benefits subject to provisions contained under sections 80C and

10(10D) of the Income Tax Act 1961  Paying premiums is convenient with access to multiple modes  –   credit

card, internet banking, cheque, auto debit facility.

ELIGIBILITY

ligibilityMin-Max proposer entry age

18-none years

Min-Max entryages for female life

to be assured

18-45 years

Min-Max entryages of spouse forelite option

21-50 years

Min-Max maturityage for female lifeto be assured

28-60 years

Min-Max age ofrisk cessation forspouse in eliteoption

31-60 years

Min-Max annualPremium

Rs.24,000-Rs.1,00,000

Min-Max sumassured to(age less than 45

 years) 

10x - 40xannualized premium

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Min-Max sumassured to(age equal to 45

 years) 

7x - 40xannualized premium

Min-Max PolicyTerm

10-15 years

Age has to be taken as of "last birthday" basis

Women‟s Health Insurance Coverage

Health insurance coverage is a critical factor in making health careaccessible to women. Women with health coverage are more likely toobtain needed preventive, primary, and specialty care services, and have

 better access to new advances in women‟s health. Among the 98 millionwomen ages 18 to 64, most have some form of coverage. However, the patchwork of different private sector and publicly-funded programs in

the U.S. leaves one in five women uninsured. The Affordable Care Act(ACA) of 2010 includes several measures that are changing the profileof women‟s coverage as the law is implemented fully. 

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Sources of H ealth I nsurance Coverage

Figure 1: Women‟s Health Insurance Coverage, 2012 

Employer-sponsored insurance covers 58% of women between theages of 18 and 64 (Figure 1). Women are less likely than men to beinsured through their own job (35% vs. 43% respectively) and more

likely to be covered as a dependent (23% vs.15%).1

 Medicaid, the state-federal program for the poor, covers 12% of non-elderly women.Typically, only very low-income women who are pregnant, havechildren living at home, or who have a disability have been able toqualify for the program. Individually purchased insurance, which people buy on their own, is used by just 7% of women. Medicare and

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other government health insurance cover a small fraction (4%) ofwomen under age 65. For non-elderly women, coverage is limited towomen who either have a disability (Medicare) or are covered throughthe military (TRICARE). Uninsured women account for 19% of women

ages 18 to 64. They typically do not qualify for Medicaid, do not haveaccess to employer-sponsored plans, and either cannot afford or do notqualify for individual policies.Employer-Sponsored Insurance: Approximately 57 million non-elderly women in the U.S. receive their health coverage from their ownor their spouse‟s employer. Historically, full-time employment has provided the greatest opportunity for obtaining job-based coverage.

  Women in families with at least one full-time worker are more likely to

have job-based coverage (71%) and less likely to be uninsured (15%)than women in families with only part-time workers (33%) or withoutany workers (28%).

  Women are more vulnerable to losing their insurance compared to men,as they are more likely to be covered as dependents. This places awoman at greater risk of losing coverage if she becomes widowed ordivorced, her spouse loses a job, or her spouse‟s employer drops familycoverage or increases premium and out-of-pocket costs to unaffordable

levels.  In 2013, annual insurance premiums averaged $5,884 for individuals

and $16,351 for families, nearly doubling in cost over the past tenyears. Workers currently pay for an average of 18% of premiums forindividual coverage and 29% for family coverage.

Individual Insurance: Nearly 7 million women purchase insurance ontheir own. This type of insurance often provided more limited benefitsthan job-based coverage and was costly. In many states, insurers chargedwomen more than men for the same coverage levels, a practice known asgender rating. Also, pre-existing medical conditions triggered coveragedenials in the individual market, depending on the insurer and stateregulations.

  Historically, these plans did not cover certain services that areimportant to women, such as maternity care, prescription medications,

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or treatment for mental health conditions such as depression. It isexpected that many people currently covered in these plans will purchase coverage in Health Insurance Marketplaces newly openedunder the ACA, which require plans to cover all of these services to

some degree and offer subsidies to purchase this coverage for thosewho are income eligible. Furthermore, in 2014 plans available inMarketplaces will be prohibited from gender rating and denyingcoverage based on pre-existing conditions.

Medicaid: According to Medicaid program statistics, in 2010, 19.3million low-income women (18 to 64 years) were enrolled inMedicaid.

3 Women make up two-thirds of the adult Medicaid

 population, but only low-income women who are pregnant, mothers of

children who are 18 years or under, disabled, or over 65 can qualify forMedicaid. Women without children and disabilities typically have not been eligible regardless of how poor they were, but this will change inmany states in 2014 when Medicaid eligibility is broadened to more people.

  Among all insurers, Medicaid disproportionately carries the weight ofcovering the poorest and sickest population of women. Approximately82% of non-elderly women on Medicaid have incomes below 200% ofthe Federal Poverty Level (FPL). One in three (33%) women onMedicaid rate their health as fair or poor, compared to 10% of low-income women covered by employer-sponsored insurance and 15% oflow-income, uninsured women.

  Medicaid finances nearly half of all births in the U.S. ,accounts for 75%of all publicly-funded family planning services

 and nearly half (43%) of

all long-term care spending.  Over the past decade, several states (31 states) have expanded programs

that use Medicaid funds to cover the costs of family planning services

for low-income women and all states have established Medicaid programs to pay for breast and cervical cancer treatment for certainlow-income uninsured women.

7 

Uninsured Women: Approximately 19 million women areuninsured. Uninsured women are more likely to have inadequate accessto care, get a lower standard of care when they are in the health system,

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and have poorer health outcomes. Compared to women with insurance,uninsured women have lower use of important preventive services suchas mammograms and Pap tests and are two to three times as likely toforgo medical services due to cost (Figure 2)

Figure 2: Women‟s Access to Care, by Insurance Coverage, 2010 

Women who are younger, poorer, and of color (especially Latinas) are particularly at risk for being uninsured (Figure 3).

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Figure 3: Women at Greatest Risk for Being Uninsured, 2012

The ACA included a provision allowing dependents to be covered up toage 26, and it is estimated that more than 3 million young adults have been insured as a result of this policy.

 

Approximately six in ten (59%) uninsured women are in families with at

least one adult working full-time and 77% of uninsured women are infamilies with at least one part-time or full-time worker.

  There is considerable state-level variation in uninsured rates across thenation, ranging from 30% of women in Texas to 4% of women inMassachusetts.

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The ACA and Women’s Coverage

Expanding Coverage: One of the ACA‟s primary goals is to expand

access to insurance coverage, significantly reducing the number ofuninsured. The law requires that nearly everyone carry health insurance

 by 2014, through a combination of changes in private and publiccoverage. The ACA was written with the intention that individuals withvery low incomes (< 138% of the federal poverty level) would qualifyfor Medicaid through an expansion of the program in all states, and thatother uninsured individuals would be able to purchase policies throughMarketplaces offering a choice of private plans. Individuals withincomes between 100% and 400% of poverty can receive assistance withthe premium costs of plans in these Marketplaces through a graduated

system of tax credit subsidies. These tax credits are not available toindividuals with incomes below 100% of poverty. However, in July2012, the Supreme Court issued a ruling that effectively made theMedicaid expansion optional for states. As of October, 2013, 26 statesincluding Washington D.C. are moving forward with Medicaidexpansion, and 25 states have decided not to expand Medicaid at thistime. As a result of these policy choices, it is estimated that 2.4 millioncurrently uninsured women who had been expected to gain Medicaidunder the original design of ACA will not qualify because their state isnot expanding the program and they also do not qualify for subsidies inthe Marketplaces.

Addressing Affordability: Affordability of care is a concern for manywomen, not just those who are uninsured. In 2013, one in three privatelyinsured women reported she or a family member postponed neededhealthcare in the past year due to cost.The new law includes somemeasures directed at limiting consumer costs that will affect women.

These include caps on out-of pocket spending for certain low-incomeindividuals and coverage for many preventive services without cost-sharing.Scope of Coverage: The ACA mandates that plans in state-basedexchanges cover broad categories of “essential benefits,” including

outpatient and hospitalization care, maternity care, prescription drugs,

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