What Do You Mean By 'Insurer' In Health Insurance

Mr. Raj Malhotra is diagnosed with cataract in both his eyes. The doctors advise him to get it corrected. He returns home with a dejected look on his face thinking about the hole an operation would punch in his pocket. His family members try to pacify him and his spouse reminds him to contact Mr. Kumar, their family investment advisor. Mr. Kumar had purchased a family health cover amounting to Rs. 1 crore for the Malhotras, which includes Mr Raj’s cataract treatment costs. He contacts the health insurance company who is Mr. Raj’s “insurer”. The insurance company offers him a cashless facility to avail treatment and he gets a cataract surgery.

But what is an insurer and why would they pay for Mr. Raj’s surgery? Let us understand the meaning of “insurer” with some frequently asked questions.

The “insurer” is the entity that provides financial assistance in times of unforeseen circumstances such as an ailment or an accident or any other medical requirement. It is an organization that offers to cover your medical expenses or hospitalization costs.

No, any person cannot become an insurer. An insurer needs to be registered with the Insurance Regulatory and Development Authority of India (IRDA) to operate and provide insurance services. The stringent norms with regards to the utilisation of money is a key factor that checks the entry of new insurance players in the Indian market.

Any insurer, meaning the entity that offers coverage to you in times of your distress (for a price you pay termed as the premium), is regulated by the IRDA. The IRDA has strict regulations that insurers need to comply with to continue holding their insurance license. This insurance license permits organizations to operate as insurers in India.

The insured is the person who avails the health cover for a price, known as the premium of the health insurance policy. The insurer, on the other hand, is someone who accepts the risk of multiple such insured individuals and offers them coverage.

Insurers have varied functions, many of them truly crucial in our society. The key function of insurers is to assist their policyholders in mitigating their risk while providing coverage through their products and honouring insurance claims.

Insurers are popularly referred to as the ‘first-party’ in the insurance policy documents, whereas the insured is referred to as the ‘second-party’.

Since having the right insurer is crucial, it is essential to check reviews, both online and offline, and choose one that offers the most beneficial insurance policy. When making such a selection, it is important to conduct a proper background check about factors such as the claim settlement ratio, ailments covered under the policy, and the likes.

Along with insurer definition, know more about other such terminologies on our website under the health insurance glossary section. You can find an information library of various topics ranging from Dependents in Insurance to How To Manage Chronic Health Problems?