Page 61 - MEDICAL AND HEALTH INSURANCE
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MEDICAL AND HEALTH INSURANCE
d) East Malaysia
OTHER FINANCIAL UNDERWRITING PRINCIPLES
The other financial factor to consider is the proposer's financial status in
the application for coverage. This is important, especially in the application
for a hospital income plan.
When a proposer of blue-collar status applies for a high hospital income
plan, there is a high chance of moral hazard as it will encourage a longer
length of stay at the hospital to enjoy the benefits of daily cash income,
which may be higher than his daily wage.
The insurer may, at times, limit the plan offer to the proposer against what
he has applied during assessment, based on his job title or occupation. The
insurer may also decline cover for students or children who are not
financially independent.
However, for a medical expense policy like hospital and surgical insurance,
the financial background of the proposer is not of significance so long as
he is able to afford the premium, as the underwriting would be based
more on medical history.
3.1.4 MEDICAL UNDERWRITING AND OTHER RISK ASSESSMENT
A medical declaration is mandatory for individual PMI applications to be
underwritten. This is normally done through the application form,
whereby the medical history would be declared by the proposer. In the
medical history declaration, complete information and current status of
health are obtained from the proposer as stated in the proposal form.
These questions are designed to extract the state of health of the proposer
and pre-existing illnesses, if any.
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