Health Insurance Individual and Group Contract Practices: From Proportional Payment Mechanisms and Occupational Change Restrictions to Analysis of Existing Clauses

6. Proportional Payment Clause, also known as Co-insurance Proportional Clause: Proportional payment is a method where the insurer shares the insured's medical expenses with the insured in a certain proportion. In this case, it's equivalent to joint insurance between the insurer and the insured. If a health insurance contract has both a co-insurance clause and a deductible clause, it means the insurer will share the medical expenses exceeding the deductible with the insured in a certain proportion. Health insurance is based on the human body, so there's no issue of whether the coverage is sufficient. However, because the risks it covers are difficult to control, most health insurance contracts include provisions for proportional payment of medical insurance benefits. 7. Payment Limit Clause: In indemnifying health insurance contracts, the insurer has a maximum limit on the medical insurance benefits paid, such as limits for single-disease payments, inpatient expenses, surgical expenses, and outpatient expenses. The insured individuals in health insurance vary greatly, as do their medical expenses. Therefore, to protect the interests of insurers and the majority of insured individuals, a compensatory principle is implemented, stipulating that medical insurance reimburse a certain percentage of actual expenses incurred within the maximum payment limit to control overall expenditure levels. However, for health insurance with a fixed-amount coverage, such as critical illness insurance, compensation is typically provided within the insured amount according to the agreed-upon sum insured, regardless of actual expenses incurred.

(II) Special Clauses of Personal Health Insurance Personal health insurance is a contract between an insurance company and the policyholder, providing protection for one or more individuals. The insured cannot choose the scope of coverage, but can negotiate with the insurer regarding payment levels, renewal terms, etc. Personal health insurance includes some unique clauses as follows: 1. Renewable Clauses Most health insurance policies are one-year policies. A good way to address this is to include clauses in the policy terms that make the health insurance policy continuously valid. Generally, the following can be included in the policy: (1) Term Clause. This clause specifies the validity period, such as a one-year policy. It promises that the insurer cannot terminate or cancel the contract during the insurance period, nor can it request changes to the premium or insurance liability. (2) Cancellable Clause. This clause offers greater flexibility; the insured or the insurer can terminate the contract or change the premium, contract conditions, or scope of coverage at any time. (3) Renewal Clause. There are generally two different renewal clauses: one is conditional renewal, which means that the insured can renew the policy until a certain time or number of years, provided that the conditions stipulated in the contract are met; the other is guaranteed renewal, also known as unconditional renewal, which means that as long as the insured continues to pay premiums, the contract will remain valid until a predetermined age. (4) Non-cancellable clause. This clause applies to both the insured and the insurer. The insured cannot request a refund or cancellation of the policy; when the insured is unable to continue paying premiums, the insurer can automatically terminate the contract. 2. Pre-existing conditions clause. The pre-existing conditions clause stipulates that the insurer will not pay insurance benefits for the insured's pre-existing conditions during the agreed period of the policy's effectiveness. Pre-existing conditions refer to diseases or disabilities that the insured had before the policy was issued but were not truthfully disclosed in the application. Usually, the policy stipulates that the insured must disclose any diseases that he or she has had in the two years or more before the policy was issued. When the insured suffers losses within the scope of insurance liability due to pre-existing conditions, the insurer will only pay insurance benefits two years after the policy takes effect. Here, it's crucial to clarify the difference between the "presumption of insured status" clause and the "incontestability" clause. In health insurance contracts, while both relate to the insured's misrepresentation of their health condition, the incontestability clause addresses illnesses constituting material misrepresentation, guaranteeing the insurer's right to terminate the contract within two years of the policy's inception. The "presumption of insured status" clause, however, addresses less serious misrepresentations. 3. Occupation Change Clause: In health insurance, changes in the insured's occupation directly impact morbidity and the risk of accidental injury. Therefore, occupation change clauses typically stipulate that if the insured's occupational risk increases, the insurer can reduce the sum insured without altering the premium rate. 4. Claims Clause: This clause stipulates that the claimant has an obligation to promptly notify the insurer of the loss, and the insurer has a responsibility to promptly process the claim. Article 23 of my country's Insurance Law stipulates: "After receiving a claim for compensation or payment of insurance benefits from the insured or beneficiary, the insurer shall promptly verify the claim; if it falls within the scope of insurance liability, the insurer shall fulfill its obligation to compensate or pay insurance benefits within ten days after reaching an agreement with the insured or beneficiary regarding the amount of compensation or payment of insurance benefits." 5. Over-insurance clause: Because health insurance benefits are compensatory in nature, to prevent the insured from profiting from illness or disability, an over-insurance clause can be stipulated in the contract. That is, for over-insurance, the insurer may reduce the amount of insurance, but must refund the excess premium. 6. Time limit clause for defense reasons: Defense refers to material misrepresentation listed in the application form. A typical time limit clause for defense reasons is as follows: "Two years after the policy takes effect, the insurance company may terminate the contract only for fraudulent misrepresentation; otherwise, it cannot refuse payment based on pre-existing conditions before the policy takes effect, unless the pre-existing conditions are among the exclusions listed in the policy."

(III) Special Terms of Group Health Insurance Group health insurance is a health insurance contract between an insurance company and the group policyholder (employer or other legal representative). The special terms of group health insurance are as follows: 1. Existing Condition Clause: This clause differs from individual health insurance. In group insurance, this clause stipulates that unless the insured has enjoyed insurance coverage for the agreed period, the insurer is not liable for paying insurance benefits for the insured's existing conditions; however, if the insured has not received treatment for a certain existing condition for three consecutive months, or has participated in group insurance for 12 months, then the condition is not considered an existing condition, and any medical expenses or income loss incurred can be claimed from the insurer. 2. Conversion Clause: The conversion clause allows group insureds to purchase individual medical insurance without providing proof of coverage after leaving the group. However, the insured cannot use this to obtain duplicate insurance. When converting group health insurance to individual health insurance, the insured usually has to pay a higher premium.