Thanksto the burgeoning healthcare costs, an increasing number of Indians have becomeincreasingly aware of the importance of having a health insurance policy. Manyprefer to buy a separate plan despite being covered by their employers undergroup medical health policies, as it eliminates the chances of going uncoveredin the event of a job loss or while switchingjobs.
Managing MultiplePolicies:
Sure, opting for an individual cover is indeed awise decision. However, many people are not aware of the details involved inmaking a claim when they have more than one health cover. Especially, because‘one plus one’ does not necessarily equal two in this case. This isdue to the contribution clause in your policy which states that if you havepurchased insurance policies from more than one insurance company, all theinsurers will share the payout in the ratio of the sum assured.
Onyour part, you are required to be transparent while buying a health cover.“While signing up for an insurance policy, the individual is under anobligation to declare if s/he is already covered under any other health policy.If s/he acquires another policy during the course of the first one, s/he isrequired to intimate the latter,” says Anthony Jacob, CEO, Apollo MunichHealth Insurance. In practice, though, industry-watchers admit that individualsdo not always disclose the presence of another policy in their portfolio which,according to them, is not the right approach. “No attempt should be madeto withhold the information as it could go against you during processing of theclaim. It is best to be transparent,” says Sanjiv Bajaj, managingdirector, Bajaj Capital. Also, the clause will not come into the picture all thetime – its applicability depends on a variety of factors. Here’s alist of scenarios a policyholder with multiple policies may encounter at thetime of making a claim:
Group &Individual Cover Combo:
You must inform both the companieswhen you make the claim. However, this will not apply if the terms andconditions of the two policies vary hugely. “The group health insuranceschemes are pretty wide in terms of coverage and features. For instance,pre-existing illnesses are covered under such policies whereas in case of retailcovers, this cover is extended only after 3-4 policy years. If a claim —pertaining to one of these pre-existing illnesses — is made beforecompletion of the waiting period, issuer of the individual claim will not sharethe payout,” says Jacob.
For other claims, though, both thecompanies need to be informed. “Usually, in case of a cashless claim, onecompany has to be contacted and provided details of the second policy. Fromthereon, the two companies will coordinate and settle the claim,” he says.However, Pawan Bhalla, CEO of third-party administrator Raksha TPA suggests thateven in case of a cashless claim, the hospital is required to alert both theinsurance companies /TPAs. The procedure may not be smooth all the time.“The issues could be in the nature of both companies insisting on originaldischarge documents,” points outBajaj.
Two ReimbursementPolicies:
Barring critical illness covers, most generalinsurers offer only reimbursement policies – the ones which undertake topick up the expenses you may have incurred during hospitalisation. Lifeinsurers, too, offer reimbursement covers, but many also sell fixed benefitpolicies. If you have bought two reimbursement covers, the contribution clausewill come into effect since the operating principles of the two policies are thesame. “Irrespective of who the issuer is, if the features are the same,the claim payout will have to be split between the two companies,” addsJacob.
Reimbursement & FixedBenefit Policy Combo:
Fixed benefit covers, which aretypically offered by life insurance companies, promise to hand out a predefinedsum upon hospitalisation. In such cases, you can make a claim under both thepolicies separately – that is, both the companies will settle the claimyou are eligible for. Moreover, the issuers of fixed benefit policies usually donot insist on original hospitalisation documents. This could perhaps be theideal combination, as the claim amount from the reimbursement cover will pay forhospitalisation expenses while the fixed benefit dole can be used to fundpost-hospitalisation recoverycosts.
Two Policies from OneInsurer:
Consider another situation, where you decide to buy ahealth policy from the same insurer that provides your group cover. Here, it isbest to make enquiries first. “Due to the accounting procedures, theinsurer could insist on dividing the disbursal between two policies, even ifboth are issued by it,” addsBhalla.
Two Polices Serviced ByCommon TPA:
Again, this could help simplify the entireprocedure. If the claim servicing of your health insurance policies is handledby the same TPA (third party administrator), the time taken could considerablycome down, as the need to transfer the documents from one TPA to another is doneaway with. If you have to deal with different TPAs, you may need to ask for acertificate from the TPA in possession of your original bills, stating that thedocuments have been retained for verification of the claim made. This, alongwith photocopies of the relevant documents, has to be submitted to the other TPAfor processing at its end.
Despite the complexities involved, youshould opt for an additional individual cover. Especially, since the group willcease with your employment. Besides, if you were to buy an individual mediclaimwhen you are working, you would have also crossed the milestone of four policyyears, which is the waiting period for covering pre-existingillnesses.
DoubleProtection
If you have two health policies that are similar inprinciple, the claim payout will be shared between the two. The disbursal willtake place in proportion of the sum assured under the two policies. However, incase one policy covers pre-existing illnesses while the other doesn’t, andthe claim relates to such an ailment, the former will pick up the entire amount.If one policy is reimbursement-based and the other is a fixed benefit one, youcan claim the entire eligible amount under both policies. You will be better offinforming both the insurers while making a claim. It also makes sense to retaincopies of all the bills. The insurers or the TPAs will then co-ordinate with oneanother and pay out their respective share.
