How To Make Multiple Health Insurance Claims

How to make Multiple Health Insurance Claims
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Content Team , 17 July 2015 , 09:27
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Introduction: Holding more than one health insurance policy
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you answer my above ... [More]
Lot of people these days hold more than one health insurance policy. For those wondering why and how an
individual can have multiple health insurance policies, here are some scenarios:
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a)
Health insurance cover from employer (you may be covered under a group health insurance policy by
your own employer and / or spouses employer and / or fathers employer and / or mothers employer)
b)
Over and above the health insurance cover from the employer (as seen in point (a) above) you may
have bought a personal health insurance cover (individual or family floater) because you did not want to
depend on your employers health insurance cover solely.
c)
You may have bought a health insurance policy some 10 years back and now feel the cover amount
is less as health insurance costs have gone up significantly in the last few years and hence you bought
one more health insurance policy to enhance your or your familys health insurance cover
d)
You may be covered under the group health insurance policy of your bank (provided to account
holders as a benefit) or some state / central government scheme or some other association / club /
group etc.
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e)
f)
You may have bought a separate critical illness policy or added an critical illness rider to one of your
life insurance policies to take care of critical illnesses
You may have bought a hospital cash policy that pays a fixed amount on the happening of a
specified event. This policy may have been bought to cover some expenses that may or may not be
covered by a hospitalisation indemnity policy.
How to make Multiple Health Insurance

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Now that we have seen the scenarios under which an individual may hold more than one health insurance
policy, the next two questions that come to mind are:
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a)
If there is a claim, can the claim be made from multiple health insurance companies?
b)
If yes, then what is the process?
Let us deal with both the above questions one-by-one
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Can a claim be made with multiple health insurance companies?

As per IRDA (Health Insurance) Regulations, 2013, the answer to the above question is yes.
Let us try and understand this with the help of some scenarios

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Scenario 1: When the claim amount is less than the sum assured of the policy against which a
claim is made

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has critical... [More]
Example: Ajay has the following 2 health insurance policies

Policy A from health insurer A for a sum assured of Rs. 2 lakhs
Policy B from health insurer B for a sum assured of Rs. 1 lakh

Laxminarayan wrote: Hi Sir, my parents are aged 73
and 63. Both have ... [More]
The claim is of Rs. 60,000

Ravi Nagrani wrote: Also I would be more happy if
In this scenario, Ajay can make a claim from health insurer A or health insurer B.
you answer my above ... [More]

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So if Ajay decides to lodge his claim with health insurer A, since the claim amount of Rs. 60,000 is less than
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the sum assured of Rs. 2 lakhs, the entire amount will be settled by health insurer A. Similarly if Ajay
decides to lodge his claim with health insurer B, since the claim amount of Rs. 60,000 is less than the sum
assured of Rs. 1 lakhs, the entire amount will be settled by health insurer B.
Vinita Kapoor wrote: I have a 6 Lac Family Floater

Plan for me, aged 50... [More]
Scenario 2: When the claim amount is more than the sum assured of the policy against which
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a claim is made
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Example: Vijay has the following 2 health insurance policies

Submit
Policy A from health insurer A for a sum assured of Rs. 3 lakhs
Policy B from health insurer B for a sum assured of Rs. 1 lakh

The claim is of Rs. 3.6 lakhs
In this scenario, the contribution clause will be applied by the health insurers. Vijay can lodge the first claim
with health insurer A or health insurer B.
So let us assume that Vijay decides to lodge his first claim with health insurer A. In this case health insurer
A will pay its proportionate share of the claim. Vijays total health insurance cover from the two health
insurers is Rs. 4 lakhs (distributed in the share 3:1 or 75%:25%). So health insurer A will pay 75% of the
claim amount (i.e. Rs. 2.7 lakhs). After that, health insurer B will then pay its proportionate share of the
claim i.e. 25% or Rs. 90,000. So the total payout received by Vijay from the two health insurers will be Rs.
2,70,000 + Rs. 90,000 = Rs. 3,60,000 (which is the total claim amount).
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Please note if there are more than two health insurers from whom the claim is to be made, then the same
process will apply as above.
Also you cannot profit by claiming the entire amount multiple times from multiple health insurers. Even if
there are multiple policies involved, you cannot get paid more than the actual hospitalisation amount.
So as you can see, IRDA has made the process simpler and policyholder friendly. Now that we understand
that a claim can be made with multiple health insurers, now let us address the next question: the process of
making a claim with multiple health insurers.
What is the process of making a claim with multiple health insurance companies?
In the event of a claim, if there is more than one health insurance policy involved (let us assume there is
health insurer A and health insurer B involved in this case), you need to take the following steps:
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If there are more than 2 health insurers involved in a claim, then the same process needs to be repeated as
mentioned above. Every subsequent claim can be made only after the previous claim is settled.
Policies with defined benefits
Hospital cash and critical illness policies are defined benefit policies. These policies pay a lumpsum amount
on the happening of a specified event and the policy terminates. The amount paid under such policies is
fixed in nature and is not related to the actual cost of treatment. In case the insured holds two such policies
and the specified event has occurred, then the insured can make a claim with both the insurance
companies for the specified amount (no contribution clause will be applied here).
Some points to consider
a)
Always declare all your existing policies in force when applying for a new policy (not applicable for
health insurance policy from employer). If the details of existing policies are not declared, then at the time of
claim, the insurance company may reject the claim on grounds of misrepresentation.
b)
When more than one health insurance policy is available for making a claim, preference should be
given to your employers policy (or other group policy) first. This is because in case of such policies the
claim processing is faster as compared to individual policies. Also in group policies there are fewer
restrictions (like waiting periods may be lower or may not be there, pre-existing diseases may be
covered) as compared to individual / family floater policies. If the entire claim can be settled from the
employers policy itself, it will not affect the no-claim bonus (NCB) on your individual policy at the time
of renewal.
c)
If you dont have an employer / group policy and have two of your own health insurance policies, then
claim from the older policy should be made first. This is because in case of the older policy, the waiting
periods for some diseases / treatment procedures may have been over.
Conclusion
It is ideal to have a single health insurance policy with a high sum assured amount so that you dont have to
go through the hassle of making multiple claims with multiple health insurers. It helps in avoiding excessive
documentation and in avoiding running around to multiple health insurers and at the same time it saves on
time and effort. The flip side to having a single policy is it may affect your no claim bonus (NCB) adversely
in the event of a claim. While having a single health insurance policy with a higher sum assured is an ideal
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thing, we understand that practically this may not be a feasible solution for lot of us. To conclude, we
sincerely hope that we have helped you to some extent in understanding how a claim can be made when
more than one health insurance policy is involved.
The article has been written by Gopal Gidwani who is the owner of personal finance website
www.bachatkhata.com
Additional reading
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Extract of IRDA (Health Insurance) Regulations, 2013
Multiple policies
i. If two or more policies are taken by an insured during a period from one or more insurers, the contribution
clause
shall not be applicable where the cover / benefit offered:
?
1. is fixed in nature;
2. does not have any relation to the treatment costs;
ii. In case of multiple policies which provide fixed benefits, on the occurrence of the insured event in
accordance with the terms and conditions of the policies, the insurer shall make the claim payments
independent of payments received under other similar policies.
iii. If two or more policies are taken by an insured during a period from one or more insurers to indemnify
treatment costs, the insurer shall not apply the contribution clause, but the policyholder shall have the right
to require a settlement of his claim in terms of any of his policies
1. In all such cases the insurer who has issued the chosen policy shall be obliged to settle the claim without
insisting on the contribution clause as long as the claim is within the limits of and according to the terms of
the chosen policy
2. If the amount to be claimed exceeds the sum insured under a single policy after considering the
deductibles or co-pay, the policyholder shall have the right to choose insurers by whom the claim to be
settled. In such cases, the insurer may settle the claim with contribution clause.
3. Except in benefit policies, in cases where an insured has policies from more than one insurer to cover
the same risk on indemnity basis, the insured shall only be indemnified the hopsitalisation costs in
accordance with terms and conditions of the policy.
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Abhay Taneja
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Smita Shetty
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Content Team , 17 July 2015 , 09:27

Religare Health Insurance's new product

Introduction: Holding more than one health insurance policy

Ravi Nagrani wrote: Also I would be more happy if

Upgrading your Health Insurance Coverage

Plan for me, aged 50... [More]

Individual Health Insurance Plan Vs. Family