Health Insurance: Flagging Claim Complications Hidden In Fine Print

Many have navigated the "how to buy health insurance" question. Despite this progress, there are details hidden in the fine print that may be missed while buying a policy. With various offerings available in the market, one needs to steer clear of conditions that might complicate coverage and settlements in the future.

There are a few things that should be avoided and checked for when buying health insurance.

Steering Clear Of Co-Pay Systems

The fine print of coverage, claim settlement, and more can seem complicated. However, it is important to read and understand the workings of the system, as crucial conditions like co-pay may be missed.

“Most people come to know what this is at the time of payment. Things like room capping and coverage, along with other aspects, may not be understood. In room capping, one cannot avail a room that costs more than one percentage of their cover. In case one opts for more, the insurance will only cover this portion of the room,” said Vinit Iyer, managing director at Prudeno Wealth Advisors.

There may be cases where the policyholder must have footed the bill at the hospital and the amount needs to be reimbursed. It is crucial that documents relating to prescription, procedure, and receipt are meticulously filed for the process.

How Much Insurance Do You Need?

The amount of cover that one really needs to take is a standing question when it comes to health insurance. While it depends on a few elements like age and pre-existing conditions, along with a few others, the largest amount can afford is the best option.

“Usually, people do not take insurance beyond Rs 5 lakh, but Rs 15-20 lakhs will help take care of serious and complicated emergencies,” said Iyer.

The premium would not be extremely pricier than the lower amounts, so the higher amounts are comparatively better. Highlighting the rise of serious diseases and costs, he recommends that the cover is over Rs 15 lakh.

Most salaried employees have a cover that comes from the employment itself. While this is a valid cover, it is important to also have individual health insurance.

“What to do when there are extra claims or a job-loss is something that salaried individuals with corporate cover do not think about,” he said.

Decoding Top-Up And Super Top-Up

The last 10 years have seen the introduction of two systems—top-up and super-top-up—that differ from traditional health insurance policies.

A top-up system establishes a threshold, beyond which a deductible applies. The system will cover any claim that exceeds the threshold, but it won't cover anything below it.

“If there is a Rs 25 lakh cover and Rs 5 lakh is deductible. So, anything up to five lakhs will not be covered. Claims above Rs 5 lakh up to Rs 25 lakhs will be covered,” said Iyer.

Launched 7-8 years ago, the super-top-up operates differently from the top-up policy. The difference here is that for a top-up policy, the deductible is applicable to every expense. A super top-up policy only applies the deductible once.

Timely Disclosures And Habits

Pausing habits like smoking when buying health insurance and intentionally not disclosing diseases from the past can only land one in deep trouble.

“Lifestyle habits and diseases in the past can be a problem if not disclosed. For instance, if there is a relapse of any sort, the company can reject the claim if this was not disclosed at detection,” said Iyer.

The non-disclosure of past ailments and health complications can give the insurer legal grounds to reject the claim completely.

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