How to get more from your health insurance

If you have been running from pillar to post to make your health insurance claims, you must be heaving a sigh of relief.

The new health insurance regulations, effective from October this year, have made it easier for policyholders to claim for expenses which arise from hospitalisation or treatment.

To top it, insurance companies are going out of the way to make the claims process simple and easy for individuals with minimum documentation and a quicker turn-around time.

Till now, individuals who held multiple health insurance policies had to make multiple claims with all the health insurance companies they had taken policies from.

Here the claims process would take months as individuals were expected to file multiple claims from several insurers.

Not any more.

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The new health insurance regulations, effective from this October, and the abolition of contribution clause that dealt with claims under multiple policies, have made life simpler for health insurance customers.

Policyholders will benefit from fewer delays in claim settlement and less paperwork.

Earlier, those with multiple policies were required to approach both (or all) insurers and the insurance companies used to settle claim in the ratio of the sum assured from different health insurance companies.

In other words, the amount spent on medical expenses had to be recovered from various insurance companies in proportion to the insurance covers taken.

For instance, you have two policies from insurers A and B, with sums insured of Rs 100,000 each.

. . .

Now, say you make a claim of Rs 100,000, then in such a case both the insurers A and B will have to shell out Rs 50,000 each.

Insurers will have to shell out equal claims because the policyholder had the same amount of cover taken from both the insurers.

However, here the policyholder had to go through the same paperwork twice, apart from going through the hassle of approaching multiple insurers.

Now, with changed rules, an individual can just approach one insurance firm.

Hence, in this case, the policyholder can claim the entire amount of Rs 100,000 from insurer A, while the existing policy taken from insurer B will continue to remain in operation or active.

In other words, a policyholder's trackrecord of ‘no-claims’ from insurer B will continue as before. 

. . .

When an individual doesn’t make any claims in a given year, he gets the status of no-claim bonus.

As one retains the ‘no-claim bonus’ on a policy that is not used, it enhances the health cover at no extra cost.

That means insurers cannot insist that the claim burden be divided as long as the amount does not exceed the sum insured.

If the claim amount is higher than the cover under one policy, then the policyholder has the right to exhaust the limit and make a claim for the balance from the other insurer.

For instance, in the above case if the insurance amount is Rs 150,000, then the policyholder has the option of approaching insurer A with a Rs 100,000-claim and insurer B with the remaining Rs 50,000 claim.

. . .

This will also help those who have an individual cover plus group cover from the employer.

The process of claims would be similar as both the policies would be treated as independent policies irrespective of whether it is group or retail.

The contribution clause will not be applicable if you have a regular health cover and a fixed benefit cover.

Reason: The regular health covers promise to reimburse expenses incurred by you, while the fixed benefit covers that are usually sold by life insurers hand out a fixed sum when you make a claim.

While the new regulations have eased concerns on this front by nearly eliminating the contribution clause, you may still have to go through making multiple claims if your claim amount exceeds the sum assured from one insurer.

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Make strategic claims

Individuals can draw up better strategies on their health insurance covers now.

For instance, individuals can buy new plans with special covers and greater benefits depending on one's age and keeping in mind the ailments that are not covered.

At the same time, it can also help in protecting and keeping older health policies active, where an individual has already developed track record of ‘no-claims’.

This will help make good use of the ‘no-claim’ bonus.

When the policyholder makes no claim in a particular year, policyholders can enhance their covers with a no-claim bonus at no extra cost.

Individuals can safeguard a long built trackrecord in such cases while utilising the new health insurance plans to make claims.

. . .

Do take into consideration the ease of making claims.

For instance, cash-less hospitalisation plans might be better used in some situations as against a regular policy in case of others.

Individuals can segregate their insurance policies based on number of years they have been in vogue, on specific ailments covered, and on the no-claims bonuses accumulated.

This will also help in judiciously utilising the health insurance policy that gives the maximum benefits when you make a claim, at the same time it will help keep your benefits in other plans intact.

Some policies cover certain ailments better with higher benefits.

A short self-note on the policies that can during certain situations go a long way in maximising the benefits of all your health insurance policies.

At the same time, it can also help reduce the premium cost of your health insurance.

By not making multiple claims, individuals can keep some plans going for a longer time at cheaper premiums.

The author is a Certified Financial Planner

Smoother processing

• Earlier, health insurance claims had to be made proportionately, based on the coverage and number of policies held
• Now, one can make a claim with any one of the insurer despite owning multiple policies
• If the claim amount exceeds the cover given by one insurer, he can approach the other insurer to claim the balance amount
• This will reduce paperwork for insurers and policyholders also
• This will be applicable to both individual and group covers provided by employer

Arnav Pandya is a Certified Financial Planner