Wednesday, January 17, 2018

When buying Health Insurance Policies!!

Are you planning to buy Health Insurance Policies?

Health insurance sector has witnessed steep growth during the past few years in India. This has largely been contributed by the fact that people now understand the importance of health care and health insurance as medical treatment has gone expensive over the years. Another factor leading to growth of this factor is increase in disposable income of the people.

The main aim of health insurance industry is not to sell and market health insurance policies but also provide timely and efficient claims during their requirement. Health insurance policy holders often complain about claims being denied by insurance company on perky grounds.  
To a great extent, if the insured take care of certain points before buying any insurance policy can prevent the complaints to arise during the process of claim. With this view, the following points may be considered and taken care of at the time of buying the insurance policy.

Health Insurance Policy prominently known as Mediclaim policy reimburses the Insured for medical and surgical expenses arising from an illness or injury that leads to hospitalization. The insurance company known as insurer provides the insured with the facility of cashless hospitalization at a network hospital or provides a reimbursement for the expenses incurred. The premium paid by the insured is tax exempted at specified limit under section 80D.

Overseas Health Policies also cover not only hospitalisation but could also cover travel related risks like:

 Loss of passport

 Loss of cash      

 Loss of baggage and
 Repatriation expenses


  • Health insurance policies are dependent on individual profile including age factor and the amount of risk to be covered. It differ from person to person  While buying health insurance policies, select the insurance company, amount of the risk to be covered under the policy, type of reimbursement like cashless or reimbursement and inclusions & exclusions.
  • The health insurance policies in India cover the expenses incurred on Hospitalization, though a variety of products are now available which offer a range of health covers, depending on the need and choice of the insured. The health insurer usually provides either direct payment to the hospital (cashless facility) or reimburses the expenses associated with illnesses and injuries or disburses a fixed benefit on occurrence of an illness. The type and amount of health care costs that will be covered by the health plan are specified in advance.
  • Insurance companies have tie-up arrangements with several hospitals all over the country as part of their network.  Under a health insurance policy offering cashless facility, a policy holder can take treatment in any of the network hospitals without having to pay the hospital bills as the payment is made to the hospital directly by the Third Party Administrator (TPA), on behalf of the insurance company. However, expenses beyond the limits or sub-limits allowed by the insurance policy or expenses not covered under the policy have to be settled by you directly with the hospital. Cashless facility, however, is not available if you take treatment in a hospital that is not in the network.
  • Check if the insurance company selling health insurance policy is registered with IRDA.
  • Make sure you buy the policy through a genuine licensed agent or broker. Ask for an identity card or licence. You can also buy policies directly from the insurance company.
  • Spend time in reading the policy brochure/ prospectus carefully and get to know what the policy covers (inclusions) and does not cover (exclusions).
  • Fill the proposal form yourself correctly and truthfully. The correctness and truthfulness is the basis of your insurance contract. Do not leave any column blank. Never sign a blank proposal form.  
  • Disclose all material information about the risk you want policy to cover. Pre-existing diseases be disclosed to the best of your knowledge and belief. It is in the interest of the insured to undergo for a medical examination irrespective of any age so as to overrule the existence of any unknown disease affecting the policy. Remember disclosure of the pre-existing diseases is in the best interest of the insured. Pre-existing disease has been defined as “Any condition, ailment or injury or related condition(s) for which you had signs or symptoms, and /or were diagnosed, and /or received medical advice /treatment within 48 months to prior to the first policy issued by the insurer” and hospitalization as “A minimum stay for 24 hours in the hospital 
  • Consider the insurance premium you can afford to pay and the amount to be covered as risk.
  • Understand clearly the terms of the policy having exclusions as well as provisions for regular health check-ups, cashless services, pre and post hospitalization expense reimbursement etc.
  • Look at the list of cashless hospital contracted by the Insurer/ TPA in your city. The policy be preferred if the hospital near to your place of residence is included in the list of such hospitals for cashless treatment to meet exigencies. 
  • When you get a new policy, generally, there will be a 30 days waiting period starting from the policy inception date, during which period any hospitalization charges will not be payable by the insurance companies with an exception of  emergency hospitalization occurring due to an accident. This waiting period will not be applicable for subsequent policies under renewal.
  • The policy will be renewable provided you pay the premium within 15 days (called as Grace Period) of expiry date. However, coverage would not be available for the period for which no premium is received by the insurance company. The policy will lapse if the premium is not paid within the grace period.
  • The insurance companies have been directed to allow portability from one insurance company to another and from one plan to another, without making the insured to lose the renewal credits for pre-existing conditions, enjoyed in the previous policy. However, this credit will be limited to the Sum Insured (including Bonus) under previous policy.
  • Family Floater is one single policy that takes care of the hospitalization expenses of your entire family. The policy has one single sum insured, which can be utilised by any/all insured persons in any proportion or amount subject to maximum of overall limit of the policy sum insured. Quite often Family floater plans are better than buying separate individual policies.  The plan takes care of all the medical expenses during sudden illness, surgeries and accidents.
  • The following are generally excluded under health policies. The actual exclusions may vary from product to product and company to company. In group policies, it may be possible to waive / delete the exclusions on payment of extra premium.

a.        All pre-existing diseases (the pre-existing disease exclusion is uniformly defined by all non-life and health insurance companies).

b.      Under first year policy, any claim during the first 30 days from date of cover, for sickness / disease. This is not applicable for accidental injury claims.

c.      During first year of cover – cataract, Benign prostatic hypertrophy, Hysterectomy for Menorrhagia or Fibromyoma, Hernia, Hydrocele, Congenital Internal diseases, Fistula in anus, piles, sinusitis and related disorders.

d.      Circumcision unless for treatment of a disease.

e.      Cost of spectacles, contact lenses, hearing aids.

f.       Dental treatment / surgery unless requiring hospitalization.

g.      Convalescence, general debility, congenital external defects, V.D., intentional self-injury, use of intoxicating  drugs / alcohol, AIDS, Expenses  for Diagnosis, X-ray or lab tests not consistent with the disease requiring hospitalization.

h.      Treatment relating to pregnancy or child birth including cesarean section.

i.       Naturopathy treatment.

The Insured has a right

       Cancel a life insurance policy within 15 days from the date of receipt of the policy document. 
      If you disagree to any of the terms or conditions in the policy, you can

  1.  Return the policy stating the reasons for objection.
  2. You will be entitled to a refund of the premium paid.
  3. A proportionate risk premium for the period on cover and the expenses incurred by the insurer on medical examination and stamp duty charges will be deducted.
  4. If it is a unit linked insurance policy (ULIP) in addition, the insurer can repurchase the units at the price on the cancellation date.
  5. Once the proposal is submitted, you should hear from the insurance company in 15 days.
  6. If any additional documents are asked for, comply immediately. Once the proposal is accepted by the insurance company, the policy bond should reach you within a reasonable amount of time.
  7. When policy bond is received, check it and be sure that the policy is the one that you wanted.
  8. Go through all the policy conditions and be sure that these are the same that were explained to you by the intermediary/ insurance company official at the time of sale.
  9. In case of doubts, contact the intermediary/ insurance company official immediately for clarification.

Maintaining the policy:

  1.  Pay your premium regularly on the due dates/ within the grace period. You are entitled for a no-claim bonus if no claim has been preferred during the previous year. Do not wait for a premium notice. It is only a courtesy. It is your duty to pay the premium to avoid lapsation or other penalties.
  2. Do not wait for your intermediary or anyone to pick your cheque up. Make your own arrangement for paying the premium on time.
  3. If there is a change of address, please intimate the insurance company immediately.
  4. If you lose your policy bond, report it to the insurance company immediately.
  5. Get a duplicate policy by complying with the formalities.
  6. The duplicate policy confers the same rights as the original policy bond.


You can make a claim under a Health insurance policy in two ways:

  1. Cashless  basis and
  2. Reimbursement basis

 Cashless basis: For a claim on cashless basis, your treatment must be only at a network hospital of the Third Party Administrator (TPA) who is servicing your policy. You have to seek authorisation for availing the treatment on a cashless basis as per procedures laid down and in the prescribed form.  

Reimbursement basis:   When a claim arises you should inform the insurance company as per procedures required. After hospitalization, you have to ensure that you obtain and keep ready documents such as claim form, discharge summary, prescriptions and bills that you should submit for a claim.


Grievance  Redressal

If you are unhappy with your insurance company

  • Approach the Grievance Redressal Officer of its branch or any other office that you deal with. 
  • Give your complaint in writing along with the necessary support documents
  • Take a written acknowledgement of your complaint with the date.

The insurance company should resolve your complaint within a reasonable time. In case if it is not resolved within 15 days or if you are unhappy with their resolution you can take up your complaint before Insurance Ombudsman, the details of which are provided on the Policy Document.  Insurance Regulatory and Development Authority of India (IRDA) is the regulatory authority for Insurance Sector. The complaints can be escalated to IRDA. 

When you buy a health insurance policy you should: 

Know that there are restrictions on coverage
Conceal material facts or you could face a dispute at the time of a claim
Pay special attention to terms and conditions in the policy like:
The clause excluding pre-existing diseases
Waiting period before certain diseases can be covered
Restrictions or limits on various expenses relating to hospitalisation
Co-payment, which means you have to share a part of the claim
Pre-conditions for renewal
Claim procedure and documentation requirement
Allow a gap of even one day in your policy renewal or your cover may be insufficient or useless
Disclose details of all pre-existing health problems including
Major ailments
Conditions like high blood pressure or diabetes

The company may want medical test reports depending on age at entry, you should comply with all procedures and documentation requirements

Check where and how the medical tests will be carried out

Check who should bear the cost for the tests

Pay the premium only after the insurer accepts your proposal

Renew the policy meticulously for the rest of your life


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