When does Health Insurance refuse to Pay?
Health Insurance has gained huge importance due to the ever-increasing costs of healthcare treatments. People are suffering from various diseases and health issues that need medical treatment in todays world. And undoubtedly, the cost of these treatments is tremendous. Not everyone can afford this cost, which might destroy the entire saving of that person. So the solution to this issue is health insurance. But when health insurance refuses to pay, then? Lets understand these situations and the remedial options available to tackle them.
Situations in which Insurance Provider refuses to pay-
There are some situations in which the insurance provider may not pay for your claims as the policy rules are not in your favour. Following are those situations which you need to take care of.
The claim arises after the expiry of the policy period. The insurance provider will not pay for your claim if it arises after your policy has expired. It is not the responsibility of the provider to pay for health issues after the period of cover.
For example, if you have purchased a health insurance policy that expires on 31st December. If your claim arises after 31st December, the insurance company will refuse your claim.
- The hospitalization date is before the policy start date.
Similar to the above situation, the insurance company is not responsible for paying your claim if your hospitalization date is before your policy start date. It indicates that you bought the policy after you got hospitalized.
For example, Mr X has purchased a health insurance policy whose period of cover begins on 1st January. If Mr X claims for the hospitalization that started on the 25th December of the previous year, the insurance provider will refuse his claim.
- The claim arises during the waiting period.
The newly issued health insurance policies generally have a waiting period of 2-4 years for the pre-existing health issues of the insured. Now, if the person claims during this waiting period to treat the pre-existing diseases, the company will refuse the claim.
For example, if you have some medical history and have purchased a new health insurance policy that has assigned a waiting period of two years. No, if you claim to treat your old disease within the waiting period, the company will deny your claim.
- The claim is related to exclusion.
Exclusions are nothing but things that are not covered under the insureds policy. Insurance companies generally do not provide coverage for certain things like participating in adventurous sports, consumption of alcohol and some hospitalization costs such as ambulance and toiletries.
For example, if Mr Z has bought an insurance policy and claims hospitalization for an accident caused by consuming alcohol, the insurance provider will refuse to pay the claim since driving a vehicle after consuming alcohol is not covered.
- The claimed amount is higher than the sum insured.
This situation is quite simple to understand. None of the insurance providers will accept the claim amounting to more than the sum insured. The claim amount must be less than the sum insured under the insurance policy.
For example, if the sum insured under the health insurance policy you have bought Rs. 5 lakhs, and you have claimed Rs. 6 lakhs for treatment and hospitalization. The insurance company will pay for the amount acceptable under the policy, and the additional claim amount will be rejected.
- The claim is not fitting the terms and conditions of the policy.
The terms and conditions of the insurance policy are very important for claim procedure. The coverage and allowances depend on these conditions. Hospitalization without the recommendation of a qualified doctor and non-recognized centres for Covid-19 treatment are some of the above conditions.
For example, if Mr Y gets admitted to the non-recognized centre for the treatment of Covid-19 and claims under his health insurance policy, the insurance company will deny the claim of Mr Y. The Insurance claim must adhere to the terms and conditions of the policy.
- Non-disclosure or misrepresentation of material facts.
If you purchase a health insurance policy, you must provide all the necessary information to the insurance provider. Non-disclosure of the material facts or misrepresentation of the important information leads to direct refusal of an insurance claim. The companies do not entertain such claims.
For example, if you have purchased an insurance policy from the provider. And you hide necessary information regarding your health or other related issues from the provider. If you claim for one of the above issues, the company will not accept your claim.
- Wrong claim procedure for health insurance.
The insurance company has certain steps assigned to the policyholder for making a claim. These steps include making the insurer aware of the emergency, availing the treatment in the network hospital or other recognized hospital, specific claim forms and relevant reports and documents submission, etc. Improper or incorrect claims result in refusal.
For example, Mr P has a health insurance policy and files a claim for treatment and hospitalization. He completes the claim form and submits it without the necessary supporting documents. The insurance company will deny the claim of Mr P due to a lack of important documents.
- The Claim amount is more than the sub-limit assigned in the policy.
Along with the main coverage limits, the health insurance policy has some sub-limits for particular illnesses, some specific medical treatments such as dialysis for kidney, cataracts and total knee cap replacement. Even if the sum insured is higher than the sub-limit, the claim for such issues will be settled up to the sub-limit only. The insurer will not settle the additional claim amount.
For example, you have a health insurance cover of Rs. 2 lakhs with a sub-limit assigned for the abovementioned health issues up to Rs. 50,000/-. Now you undergo treatment for cataract, which costs you Rs. 1 lakh. If you claim Rs. 1 lakh for a cataract, the company will pay Rs. 50,000 only as per the policy sub-limit. The additional claim will be refused.
How can we avoid the Rejection of Health Insurance claims?
We have seen the health insurances circumstances refusing to pay for your claim. To avoid such issues, we need to take the following preventive measures.
- Always read and understand the policy in detail. The terms and conditions are very important for filing a claim and completing the process.
- Understand the coverage offered under the policy. Purchase add on covers as per your requirements. You cannot claim for the things not covered under the policy.
- The temporary and permanent exclusions are important to understand and the coverage. The claims related to these exclusions directly get rejected.
- You must be aware of the period of cover under the policy. You can claim for treatments taken during this period only. Before and after this period, the health issues are not the insurers responsibility.
- Ensure that you have fully disclosed the necessary information related to your health and other aspects to the insurance provider when buying the policy. Avoid any misrepresentation regarding this information.
- Pre-existing diseases and the waiting period is important for filing a claim. Make sure you claim for this disease after the waiting period gets over.
- You can avail of the claim up to a certain limit which is your sum insured under the policy. Make sure that you are not filing the claim above this limit. The company will pay you only up to the sum insured.
- Make sure that your claim is adhering to the terms and conditions of the policy and that you provide the necessary forms and supporting documents to the insurance provider.
- Along with the coverage and exclusions, you must be aware of the sub-limits of your insurance policy. If your claim is related to the sub-limit, make sure it is within the specified amount. The company will not settle an additional amount.
Apart from these, there are some possibilities of refusal of health insurance claims that you might come across. We will now understand what we can do or need to do when our claim gets rejected even after taking care of the above situations.
- If you feel that you have taken all the necessary steps to file a claim, and everything is valid as per your knowledge, the company still has rejected your claim. Then there is an option for you to lodge a complaint with the Insurance Regulatory and Development Authority of India (IRDAI) against the insurance company. They acknowledge your grievance within 3 working days and try to resolve the issue within 15 working days.
After understanding the cases of refusal of health insurance claims by the provider, and necessary precautionary measures to avoid such issues, we can say that- health Insurance Claim is a process which you should understand thoroughly and then apply for it to get the expected benefits.