Insurance is considered to be one of the primary building blocks while constructing a financial plan. Opt for health insurance, life insurance, accident insurance and home contents insurance before allocating money for investments, we are told often.
However, before buying these policies, it is important to read the fine print contained in each of them. Remember that there is no use of a policy, if the company can wriggle out of its obligations because of clauses, which are already there in your policy, but you have not noticed them.
Here are a few common 'escape clauses', formally known as exclusions across most health insurance policies.
No payment for pre-existing diseases: Diseases that were in existence before the commencement of the policy are not covered. And hold on, it applies even if you were unaware of the existence of such a disease. In recent times, some companies are relaxing this requirement by reimbursing the treatment of such diseases after a period of four years of the policy being in force. Remember to thank them...
No to first 30-days: Any expense incurred for the treatment of any disease occurring within 30 days of the policy coming into force (except through bodily injury due to accident). Also in case some cases such as in cataract surgery, there are sub-limits on reimbursement even after the exclusion period has passed.
No to teething problems: Expenses incurred for laser treatment of eyesight due to any refractive error, dental treatment, cosmetic surgery, cost of spectacles or contact lenses etc.
No to war: Injuries due to wars, invasions or any claim directly or indirectly caused or contributed by nuclear weapons.
No to herbal: Treatment through non-allopathic methods is not allowed.
No to pregnancy: Treatment arising or related to pregnancy or any fertility procedure.
There are also certain sub-limits for reimbursement. Some of these are:
Room rent: 1.5 per cent of the sum insured per day. If your insurance cover is Rs 2 lakh, room rent will be capped at Rs 3,000 per day.
ICU charges: 3 per cent of the sum insured per day.
Doctors' Fees: 40 per cent of the sum insured.
The best ones: A disputed matter can only be referred to an arbitrator, in case the company has admitted the claim but the amount of reimbursement is disputed. Cases where the company has refused to admit the claim cannot be put up for arbitration.
In case of cashless treatment, the company will have to be informed a week in advance in case of a pre-planned operation so that written consent from the company is obtained.
In short, as more and more schemes come up, it becomes necessary for you to read the fine print. After all, depending on the company for reimbursement, which may never come about may be as injurious (financially) as the disease itself.
The writer is vice president, Parag Parikh Financial Advisory Services.
