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 a 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 policyholder, who might be under strain due to the illness. 

The first thing to know is that it pays to inform all insurers whenever there is a hospitalisation. 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 utilise 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 2/3rd of the amount (Rs 1 lakh) while the second policy will pay the remaining 1/3rd (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 from the first plan big enough to 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 and one bought on your own), you will need to mention that you have additional cover at the time of making a claim. 

The Economic Times