How to avoid surprises at the time of health insurance claim

Mr. B is a happy man in his mid-40s with two kids and a loving wife. He truly knows the fine art of work-life balance; he always makes time for his family every evening after work. Mr. B is also a responsible man. He has done all his investments and financial planning to secure his family’s needs, including purchasing a family floater health insurance plan. He was advised of this plan by an acquaintance, so he went for it without a second thought. His family has been insured under this health policy for close to two years now.

A few weeks back, Mr. B had to be hospitalized for a hernia surgery. He had been sensing some discomfort for a while. He consulted his family doctor who advised Mr. B to undergo this surgery, and soon. The family supported Mr. B through his recovery, which was painless and quick, thankfully!

The time came for Mr. B to submit his medical papers for claim settlement with the insurance company. He got the settlement intimation soon after. But imagine his utter surprise and shock; he received only 25% of the claimed amount! He immediately contacted the insurance company, and was informed that clause 1, sub-clause 4, item ‘e’ of the 27-page policy terms and conditions document mentions this. That the insurer is liable to pay only 25% of the sum insured or actuals, whichever is less, for hernia surgery. How frustrating!

Like Mr. B, several people end up with such rude surprises at the time of submitting their medical papers for health insurance claims settlement. Their claims could get reduced or rejected for not having known about any of the following major points:

1. Sub-limits: This is the clause Mr. B didn’t pay attention to in his family health insurance plan. Basically, this clause means that the insurance company will pay a certain percentage of the total Sum Insured for defined illnesses. In Mr. B’s policy, this was 25% of Sum Insured for hernia surgery.
   This is an upper cap that is put on expenses for certain procedures and treatments up to which the insurance company will pay. Similarly, if a procedure like hysterectomy is mentioned with sub-limit Rs. 50,000, this means the insurance company will incur cost for this surgery only up to Rs. 50,000.
2. Co-payment: This means that for all claims the insurer will ask you to bear a certain percentage of the claim. For instance, if there is a co-pay of 20% in the policy, then if there is a claim of say Rs. 1,00,000, then the insurer will pay only Rs 80,000 and you pay Rs. 20,000. 
3. Room Charges Limitations: Some insurers have specified limits on room charges (an amount or certain percentage of the sum Insured) or define the type of room that can be taken, such as a single private room which means that you cannot move to a deluxe room or a suite.
4. Deductible: Deductible means the amount beyond which the insurance company starts to pay for medical claims. Suppose you have a health insurance plan that says deductible Rs. 2 Lacs. This means for claims of amount up to Rs. 2 Lacs, you will have to bear the expenses on your own. For claims of amount above Rs. 2 Lacs, the insurance company will pay the amount
5. Waiting Periods: All health insurance plans specify waiting periods. For example, initial waiting period, Pre-Existing Disease (PED) waiting period and Specific Disease waiting period. One has to wait for these waiting periods to end, before one can submit claims related to these conditions or treatments. 
6. Permanent Exclusions: Nearly all health policies specify a list of conditions and/or treatments that are permanently excluded from coverage. This means the insurer is not liable to pay anything at all towards claims related to these exclusions.
7. Accurate Personal Information: This is one of the leading causes of claims rejection. Claims get rejected often because of incorrect information submitted at the time of proposal form filling. This could be related to your personal details like full name, age, PAN No. etc. Or it could be related to your health conditions updated at the time of applying for the health insurance plan. If there is any mismatch or misinformation found, the insurer is likely to reject such claims.
8. Mid-term inclusion of spouse and or new born child: Some insurers do not allow mid-term inclusion of spouse (after marriage) or inclusion of new born child. They only allow these changes at the time of renewal.
9. Time limit for claims submission: Insurers often specify the maximum time within which the insurer needs to be informed of the medical treatment and the claim needs to be submitted for settlement. Crossing this time limit often leads to rejection of claims.
10. Lapse: Rejection occurs when a claim is submitted for a medical procedure undergone during the time that the policy has not been renewed i.e. the policy has lapsed.

Like with all investment instruments, “read all offer documents carefully” for health insurance. The finer details are mentioned in the policy wordings, which are elaborate and complex with a lot of confusing jargon. SANA.Insure helps simplify these for you. Introducing, for the first time in India, SANACheck – a health check for your health policy! All you have to do is enter some simple details about your health insurance plan on SANAcheck. You can view all details about your health insurance policy at-a-glance. The good, OK-OK and inferior features in your policy are highlighted in green, amber and red for a quick look. If you want to learn more, you can download the detailed report pdf and read through each feature – what it means, what is offered in your particular plan and what would be the best offer in the market.

Just so that you can avoid rude surprises – like what happened to Mr. B - in future!

Wish you a healthy and happy life!