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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Non-Life Insurance Products

Mr. Anil Mehta has a health policy with a Rs 10 lakh sum insured, a 20% co-payment applicable on every claim, and a room rent limit of Rs 5,000 per day with proportionate deduction. He stays 4 days in a room costing Rs 10,000 per day. Room charges are Rs 40,000 and all other admissible expenses are Rs 1,60,000, and the other expenses are subject to proportionate deduction on the same ratio. Assuming the co-payment applies after proportionate deduction, what does the insurer pay?

The insurer pays Rs 80,000. Room rent is capped at half the actual charge, so all expenses are scaled by 50%: (40,000 + 1,60,000) x 50% = Rs 1,00,000. A 20% co-payment then removes Rs 20,000, leaving Rs 80,000.

  1. ARs 1,00,000Correct
  2. BRs 1,60,000
  3. CRs 80,000
  4. DRs 1,20,000

Explanation

Eligible room rent is 5,000/10,000 = 50%, so room cost payable is Rs 20,000 and other expenses Rs 80,000, total Rs 1,00,000 after proportionate deduction. Co-payment of 20% reduces this to Rs 80,000. Rs 1,00,000 is therefore wrong... correct payout is Rs 80,000, which is option 3.

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