New norms to make health cover claims much easier

Health insurance customers with multiple covers don't have to fret about making a claim anymore. They have the option of approaching one of the insurance companies and claim the entire amount.

Earlier, those with multiple policies were required to approach both (or all) insurers and the companies used to settle claim in the ratio of the sum assured. For example, if you had two policies with sums insured of Rs1 lakh each and the claim was Rs1 lakh, both the companies would shell out Rs50,000 each. But, the new health insurance regulations, effective from 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.

Moreover, one also gets to retain the no-claim bonus on a policy that is not used, which enhances the health cover at no extra cost. "As per the new guidelines, the customer can avail of the entire claim in any of the policies till the sum insured is exhausted and the remaining claim can be settled with other insurer or insurers," says Sanjay Datta, chief of underwriting and claims at ICICI Lombard. That means insurers cannot insist that the claim burden be divided as long as the amount does not exceed the sum insured. "Even if the claim amount is higher than the cover under one policy, the policyholder has the right to exhaust the limit and make a claim for the balance from the other insurer. So, in a sense, the contribution clause has become somewhat redundant," says Renuka Kanvinde, assistant vice-president, health insurance, Bajaj Allianz General Insurance. 

The new regime is also favourable to those with an individual cover plus group cover from the employer. The new rule gives you the choice of making a claim under the policy of your choice. "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," says Antony Jacob, CEO, Apollo Munich Health Insurance.

However, if you have bought a regular health cover and a fixed benefit cover that offers, say, Rs2,000 per day of hospitalisation or a pre-defined lump sum on diagnosis of illnesses to supplement it, the scenario will remain the same for you as the contribution clause does not apply to this combination. 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.

Typically, a policyholder has to submit a bunch of documents, including medical records, original hospital bills and discharge summary, along with the completed claim form while filing a claim for reimbursement of expenses. Since the emphasis is on originals, the procedure of claiming from more than one insurer always tended to be a long-drawn-out affair. While the new regulations have eased concerns on this front by nearly eliminating the contribution clause, you may still have to go through the process if your claim amount exceeds the sum assured.

Cashless procedure will be simpler. "The claim will be settled on a cash less basis by one insurer and the insured can then submit claim documents with the settlement report received from the hospital to the other insurance company for the remaining amount," says Jacob. Also, if all your insurers happen to use the same third-party administrator's services for processing claims, the procedure could be hassle-free.