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Smart and simple tips to file a health insurance claim

One of the key factors keeping people away from purchasing health insurance plans is the claim process. Many find it difficult, tedious and complex. We normally tend to assume that insurance companies never pay claims or at least don’t pay claims on time. People also tend to get put off by the tedious claims process and get the feeling that the insurance company is just trying to make life difficult for them.

But what if we said all these assumptions are completely wrong? What if we show you simple and smart tips to file health insurance claims to make your life easier and insurance experience pleasant? That’s exactly what we’ll do here. Remember, more often than not, the claims get delayed only because we don’t do the documentation and the paperwork properly.

Understanding the claim process for health insurance

The claim process is nothing but the request from a policyholder to the insurance company to compensate and make payment for the medical treatment costs incurred by the policyholder. There are two types of claims:

1.    Cashless

2.    Reimbursement

For both types of claims, health insurers follow a set of processes, which need to be completed within a few days to a few weeks of the hospitalization. Typically, the process involves informing the insurance company about the medical procedure/emergency within a specified time frame, submitting a claims form and the required documents. The insurance company then investigates the documents to release the payment.

Cashless claim

Cashless claim is an agreement between the insurer and the network hospitals to allow policyholders treatments without any payments from the policyholder. In this type of claim, the insurer pays directly to the hospital. The policyholder does not have to make the payment and then receive it back as reimbursement from the insurance company.

This process, typically, entails the following steps:

  1. Get treatment at a hospital which is part of the approved network of the insurer
  2. Submit a health insurance policy claim form at the hospital
  3. The insurance company sends an approval to the hospital or raises a query in case of missing information

 Reimbursement claim

In this type of claim, the policyholder has to make the payment to the hospital from his / her pocket, which is then reimbursed by the insurer upon following the reimbursement process. The process can be broadly summarized as under.

  1. The policyholder is required to fill a claims form and submit to the insurer along with the medical and hospital bills
  2. The insurer then investigates the documents
  3. If the claim is approved, the insurance company sends an approval letter. In case of rejection, a rejection letter along with the reasons is shared with the policyholder. 

Health insurance claim – steps to follow and process

The claim process would depend on the procedure followed by the insurance company. Each insurance company may follow a different procedure. However, the claim process typically involves these steps:

Connect with the insurance company or insurance agent: the health insurance company representative or insurance broker is the primary contact for health insurance policyholders.

Gather the required documents to file the claim: after the claim has been reported, the insurance company would need to investigate the relevant documents that have been submitted by the health insurance policyholder. Here’s a list:

  • Claim form, duly filled
  • Medical treatment certificate
  • Doctor’s consultation and prescription documents
  • Hospital discharge summary
  • Medical and pharmacy bills
  • Investigation reports

Review, investigation and evaluation conducted: once the claim has been reported and filed along with the required documents, the insurance company would evaluate the file and work out the amount to be reimbursed.

Payment is arranged and paid: next, the insurance company would arrange for the reimbursement and send out the payment to the health insurance policyholder through the mode chosen.  Normally, nowadays are done via bank transfers only.

 Insurance companies ensure every claim is handled and addressed fairly and carefully. However, for that your cooperation is also needed. Here are simple tips to make a health insurance claim you might find useful

  • A health insurance policyholder can file multiple claims in a year. But of course, one can file claims only up to the sum insured. Once the sum insured is claimed, the policyholder cannot make any further claims. Even if the policyholder makes a claim, the insurer will reject it as being outside the coverage limits.
  • A health insurance plan has an expiry date and usually it has to be renewed every year by paying the premium. To continue to make claims, the policyholder has to pay the premium and renew the policy. When policyholders renew policies on time, the insurer will offer a bonus known as the restoration or refill. 
  • Once the sum insured is exhausted, meaning claimed completely, the restoration benefit comes to help to make more claims and to continue making claims. This is a benefit that most family floater policies offer.

How to make claims for multiple health insurance plans?

Yes, you can have multiple health insurance plans and can make multiple claims from your policies. It is extremely important to understand the claim process in the case of multiple health insurance plans as it is different from having just one single plan. Let’s understand how you can do it in such a way that your claim does not get rejected.

Example 1

Let’s assume that you have two health insurance policies – one for a sum insured of Rs.1 lakh and the other for sum insured of Rs.2 lakh. You had to get hospitalized. Your medical bills amounted to Rs.1.5 lakh. What should you do in this situation?

The first thing you should do is, inform both the insurance companies about the hospitalization and medical bills and that you would be making claims with both or either one of the insurance companies. It is essential that you keep both the insurance companies informed and document the sharing of information with them even if you are going to submit the claim to only one insurance company.

In fact, the information about the number of insurance plans that a policyholder has must be truthfully submitted right at the time of buying a new insurance policy. One reason for this is the Contribution Clause, wherein some policies may have a clause under which, in case a policyholder has multiple policies, the claim will be settled by each policy equally or in a pre-agreed proportion. 

However, there is a new system in place in 2013. For the sake of simplicity, in 2013, the Insurance Regulatory and Development Authority of India (IRDAI) made amendments to the contribution clause. It must be noted that if the claim amount is within the sum insured then the contribution clause is not applicable. 

In this case, the claims will be paid according to the contribution clauses of both the insurance policies. You can choose to make the claim with either both or just one insurance company or would have to follow the contribution clause. It is advisable that one understands the contribution clause at the time of purchasing a policy. This is part of the fine print of the contract and you must familiarize yourself with these details. As they say, the devil in any contract normally lies in the detail.

Example 2

You have three health insurance policies from three different insurance companies of Rs.1 lakh each. Now take for example, you get hospitalized and the bill amounts to Rs.2 lakh. You can either claim Rs.1 lakh each from two policies or divide it between the three and claim Rs.66,700 from each. Here again, it would depend on the contribution clause in the agreement with the insurance company.

One thing you must definitely do is, declare the policies in the claim forms; and that is extremely important. Insurance companies usually provide a settlement certificate for the policyholder to make claims from the other existing policies. From the perspective of the policyholder, it becomes a lot simpler.

Example 3

You have two health insurance plans – one is a hospital cash policy and the other is a critical illness policy. If you get hospitalized due to an illness, you can make a claim from the hospital cash policy, not the critical illness policy, because the critical illness plan will only be applicable upon the diagnosis of a critical illness; not otherwise.

By now you must have grasped these key tips and cues for making health insurance claims. The key to understanding health insurance is to read each and every detail carefully. It will help in understanding when, how, and what to claim form, too.

Health Insurance Claim Process

How much time does the claim process of health insurance require?

Typically, health insurance companies take a few days to a few weeks time to make the reimbursement. The process involves the policyholder sharing the necessary documents with the insurer, the insurance company assessing and clearing the claims form and then making the payment. This mostly takes about 15 days to 30 days time.

Do insurance companies in India reject a lot of claims, as it is commonly known?

No, it’s a completely wrong assumption that insurance companies reject most claims or do not pay for the complete claim. However, there are some genuine reasons because of which the insurance company might reject claims. Here are a few common reasons:

1. If a policyholder makes a claim above the sum insured of the policy, the insurance company would reject the extra amount claimed.
2. The insurance company will pay for the claims made for the coverage mentioned in the policy. If a particular disease or expense is not included in the coverage of the policy, or if it is in the cooling period, the insurer will reject that claim.

If the policyholder does not follow the waiting period rules and makes a claim within the waiting period, the insurance company will reject that claim. Simply put, it is possible to just go to the IRDA website and check the claims settlement ratio of the insurer. That gives you a sufficiently good idea of what you are getting into.