Avoid getting Trashed

The most critical moment in the entire tenure of an insurance policy is when a claim is filed. “Rejection, of any kind hurts.”In an insurance claim, the blow is multitudinal – financial, emotional,  physical - thus making it more stressful.

“One of the most common queries we get from people buying a policy is whether the insurance company will honour the claim,” says Rahul Agarwal, founder, Ideal Insurance Brokers (P) ltd., a reputed insurance brokerhouse across the country.

I was diagnosed with vertigo, a type of dizziness, this May. This is not all. The real trouble started after three days of hospitalisation when the TPA of my health insurer deprived me of the cashless claim facility. Though the insurance policy had promised me cashless hospitalisation, I had to pay the bill of Rs. 39,000 from my own pocket.

The TPA refused on absurd grounds like the illness could have been due to some pre-existing ailments and that they needed time to scrutinize the claim. However, when I referred to medical professionals, they told me that my illness had nothing to do with my cardiac ailment which was declared as pre-existing in my health Insurance policy.

While the denial of the cashless facility didn’t necessarily mean repudiation of the claim, it did shake my confidence in the insurance company. I, who has been paying around Rs 18,000 every year since 2009 as premium to the Health Insurance Co., felt cheated.

The figures of claims rejected/ pending as of today would definitely make any policyholder dubious about the efficiency of his insurance cover. But this is only half the picture. The no. of claims settled is no less. The stringent procedure followed to settle Insurance claims is to ensure that only genuine claims are paid. In fact, if Insurance companies show leniency and keep accepting bogus claims, it may cost customers more in the form of higher premiums. It is thus the duty of the policyholder to follow all policies and procedures given in the insurance document and not give the insurer any chance to reject his claim – health or otherwise.

Here, I list some broad reasons why our insurance claims may be rejected and ways to steer clear of them –

Reason:	Solution:
NON-DISCLOSURE, partial  disclosures and wrong disclosures of significant facts such as age, nature of occupation, income, existing insurance policies, major ailments or pre-existing medical conditions.	Full Disclosure. When applying for the product, understand the consequences of concealing or giving incorrect information.
LACK OF KNOWLEDGE regarding covers and exclusions under the policy. We are not even aware when breaching a condition mentioned in the policy document.	Go through the policy terms and conditions and understand them well before purchasing. When in doubt, seek clarifications from the advisor.
DISCREPANCY IN PROPOSAL FORM because we often refrain from filling our forms and depend on third parties. They are often not aware of details and an imp fact might be inaccuratly represented.	Fill up the proposal form yourself. Submit genuine documents in an orderly and timely manner to the insurance company with details. If any discrepancy is found in the policy, immediately get it rectified.
SURPLUS EXPENSES. Private hospitals, in their quest to generate maximum revenue, sometimes perform medical procedure which may not be necessary. In motor, usually bills are blown out of proportion. These irregularities, when caught by the insurer, results in rejection of the claim.	Avoid extra costs. Make sure the medical process undergone was necessary. Do not include motor repair charges of pre-existing damages or costs not covered under the policy in the claim.

Use multiple plans efficiently

It’s not uncommon for an individual to be covered by two, or even three, health insurance policies. One reason for this is the rise in the cost of health-care services in the past decade. Ten years ago, a Rs. 2 lakh health insurance cover was considered fairly sufficient for an entire family. Today, it will barely be enough to pay for a five-day stay in a hospital. Also, medical insurance cover from employers is not sufficient. In both circumstances, one has to buy another policy.

            But while a larger insurance cover is a good thing, multiple health insurance policies can lead to confusion when making claim. Should a person claim only from one insurer? Does he need to inform his insurer about the additional covers? Will the hospital allow two cashless claims for the same illness? Will he get the no-claim bonus if the second policy is not invoked? It’s all quite confusing for the policy holder, who might be under strain due to the illness.

            The first things to know is that it pays to inform all insurers whenever there is a hospitalization. This does not mean that one can separately claim the expenses from each of them. “You cannot profit from a medical  insurance plan”, says Joydeep Roy, chief executive of L&T General Insurance Company. It’s only that by informing all the insurers, the policyholder is able to optimally utilize the cover available to him. The claim has to be paid by the insurers in the same proportion as their health cover. Say, a policy holder has two policies – one for Rs. 2 lakh and the other for Rs. 1 lakh. If he makes a claim of Rs. 1.5 lakh, the first policy will pay 2/3^rd of the amount (Rs. 1 lakh) while the second policy will pay the remaining 1/3^rd (Rs. 50,000).

            This sharing is subject to the terms of the policies. “There is a contribution clause in most policies. The expenses are shared by the insurers proportionately,” says Sanjay Datta, head of customer service (health and motor insurance) at ICICI Lombard General Insurance.

            You may want to know why the person would claim from the second policy. After all, isn’t his Rs. 2 lakh cover his expenses. Perhaps not, because unlike in the past, most health plans now have limits on the expenses under different heads, For instance, there is usually a cap of 1% of the sum assured on the room rent per day. So, a Rs. 2 lakh policy will only reimburse up to Rs. 2,000 a day. This means that an insurance plan may not fully cover your medical expenses(see table*) . It is also a good reason why one should study the policy features in detail, especially the fine print on benefits, before buying one.

            Financial planners advise that whenever the need for hospitalisation arises, one should inform the third party administrators (TPAs) of all the health policies held by the person. For instance, if you have three policies (one from your employer, one from your spouse’s employer an done bought on your own), you will need to mention that you have additional cover at the time of making a claim. Claim forms require the policyholder to state if he is covered under any other medical policy or group insurance scheme. “ The policyholder can choose to claim from only one insurer. If he has another policy but the claim has been made only with us, we will process  and settle the claim as per norms. Later, we can pursue with the other insurer for their share of the claim,” says Subrahmanyam B., vice president & head, health vertical, Bharti AXA General Insurance.

            However, if one of the policies has been bought recently and still in the waiting period, then the policyholder can claim only from one policy which is already in effect.

            Insurance companies require you to submit original bills and documents at the time of making claim. Since you will be claiming from more than one insurer, request the hospital to provide you with

certified duplicate copies of the treatment summary, bills and discharge slips. That’s easier said than done because hospitals are fussy about these things. If your hospital is not helpful, submit the originals to the primary insurer and attested photocopies to the others. Like we said, if all insurers are in the loop, you will not face any problem.

*Why a Rs 1 – Lakh health plan won’t fully cover a bill of

Rs. 65,000

Expense Head	Expenses Incurred	Limit as % of sum assured	Claim allowed
ICU charges (Rs. 8,000 x 1 day)	Rs. 8,000	2% per day	Rs. 2,000
Room rent (Rs. 3,000 x 5 days)	Rs. 15,000	1% per day	Rs. 5,000
Doctor/surgeon/ Anaesthesist fee	Rs. 20,000	25% per illness	Rs. 20,000
Surgery, implants, medicines, treatment and diagnostics	Rs. 20,000	50% per illness	Rs. 20,000
Ambulance	Rs. 2,000	Rs. 1,000	Rs. 1,000
Total	Rs. 65,000		Rs. 48,000

• In the above example, while some of the expenses were fully covered, the limits on certain heads such as ICU charges, room rent and ambulance service reduced the amount of reimbursement.
•  If the policyholder has another health insurance plan, he may be able to get the full claim.
•  In the case of multiple plans, insurers will bear the cost proportionately to the cover they offer.
•  Multiple health plans enlarge your cover but also makes the claim process cumbersome. You can avoid this by getting additional cover from the same insurance company.

Source: Times of India