By Sapan Parekh:
Health insurance of late has seen widespread demand from the rich and the poor alike. This sudden popularity is due to the realisation that high inflation and the ever growing health-care costs coupled with the poor general hygiene of our cities would make illness inevitable and would keepout-of-pocket payments exorbitant.
What has been seen in these health insurance policies is that the liberal use of medical and legal terms makes the policies incomprehensible for majority of the insurers. Thus they basically rely on the good-will of their insurance agent to understand the nitty-gritty of the policy. Though such dependency on agents for your policies may be convenient, but it is always better to understand the terms of your policies first hand.
Thus in the following paragraphs I have attempts to inform the readers about the basic terms used in any health insurance policy.
Waiting Period Exclusion
Insurance providers without any exception exclude any disease/injury/condition from claim, if the policy holder had symptoms or had received medical advice/treatment for the same within 4years prior to the first taking the policy. This is called ‘Pre-existing Disease’ exclusion. Such exclusion is generally for 2-4 years depending on the policy taken and the risk involved. Due to such clauses in a health insurance policy, it is always recommended to take a health insurance policy at as young age as possible.
In addition to this exclusion, another exclusion to avoid fraudulent claims is generally present in health insurance policies. This exclusion renders any expenditure for a disease contracted or treatment undertaken by the Insured during the first 30 days from the commencement date of the policy, inapplicable to be indemnified. Nevertheless an exception exists for this exclusion. All accidental injuries are covered by the policy irrespective of the exclusion clauses.
Third Party Administrator and Cashless Facility
Nowadays, insurers are increasingly providing cashless settlement facility. That is, the insurance company has a service provider called the ‘Third Party Administrator’ (TPA), who liaises with the hospitals and directly makes the payment for the policyholder’s treatment as per the terms of the policy and coverage. Such a TPA is licensed by the IRDA and is engaged by the Company for a fee or remuneration. For instance ICICI Lombard has TTK health insurance as its TPA.
The TPA’s have helped insurers ensure seamless insurance services by providing the policyholders with instant benefit so that out-of pocket payments and standard processing delays do not hinder or delay health insurance claims. Thus a policyholder’s availability of cashless facility is subject to obtaining pre-authorisation from the TPA. Also one needs to submit to the TPA complete information about the disease, illness or injury requiring treatment to be undertaken in a hospital which is within the TPA’s network, along with certification from the medical practitioner or hospital.
Considering the above, the TPA shall issue pre-authorisation to the hospital concerned for cashless hospitalisation for the treatment of the policyholder up to the limit of the sum insured as specified in the policy.
However, cashless facility for hospitalisation will not be available if the treatment is undertaken in a non-network hospital, in which case, the policyholder should, after due intimation about the hospitalisation details to the company/TPA, pay the hospitalisation expenses directly to the hospital concerned and later claim reimbursement from the company.
An insurance company may engage more than one TPA and similarly one TPA may serve more than one insurance company. Also the TPAs are prohibited from charging the policyholders with any separate fees.
Material Change in Risk
Now, contrary to what many may think, health insurane is also a kind of contract which is between the policyholder and the insurance company. This contract is renewed every year when you pay your premium. Thus during renewal there is an assumption that the risk has remained the same from the preceding year. Therefore if there is any material change in the risk related to your health, you should immediately notify the company giving circumstances that may give rise to the claim which may lead the Company to adjust the scope of cover or premium. Failure to do the same gives the insurance company an excuse to avoid the contract and turn down the claim for reimbursement.
All in all, even a perfunctory reading and a basic idea about the terms of an insurance policy would go a long way in ensuring a speedy settlement to your insurance claim.