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4 Clauses Hidden in the Fine Print of Healthcare Policies

Do any of us actually take the trouble of reading all the terms and conditions before signing an insurance policy? Not many of us do as we do not have the habit of looking beyond the first page of an application. However, if you are taking a health insurance policy, you will be better off by reading the fine print carefully. Most insurance companies have terms and conditions which could pose trouble later.

Let’s take an example. Mr. Sharma who got his cataract operation done last month is unhappy with his insurer. This is because the insurance company is reluctant to reimburse him for the operation. But, you may be wondering why Mr. Sharma’s plea has been rejected. Because the fine prints of the policy clearly stated that cataract is not covered in the first year of the policy.

Mr. Sharma did not read the wordings carefully. If he had read the terms and had delayed the operation by a year, he would have easily got the reimbursement. When buying health insurance, it is important to know the policy fine print.

In this primer, let’s take a look at the hidden fine prints that people mostly ignore, when buying a health insurance policy:

1. Pre and Post Hospitalization Expenses

Most are not aware about this benefit that an insurance company offers to the policy holder. As per pre-hospitalization expenses, the insurance company reimburses all the expenses before hospitalization.

Doctors may conduct a range of tests to diagnose the condition of a patient accurately before prescribing treatment. The number of days that fall in the ambit of pre hospitalization insurance may vary from 30 to 60 days depending on the insurance company.

Post hospitalization expense covers all charges incurred by an individual, after he is hospitalized. At times, the consulting physician may prescribe tests to ascertain the progress of a patient. The number of days that fall under the coverage varies across insurance providers.

It is important to note that therapies such as acupuncture and naturopathy are not covered, whereas consulting fees and diagnostic charges are covered.

2. Insurance Waiting Period

In most cases, individuals who have plans of buying a health insurance policy do not understand the term “waiting period”. It is one clause that can affect the possibility of receiving benefits from day one of the insurance policy. It is important to note that all insurance companies come with a waiting period, which is the length of time during which you cannot claim benefits from the insurance company.

Irrespective of what happens to you, you will have to wait for the “waiting period” to get over before making a claim. The waiting periods can be of three different types; initial, disease specific and pre-existing ailment.

In case of the initial waiting period, if you fall ill within 30 to 90 days from the start of the policy, you will not receive any help. If you are suffering from an adverse medical condition the waiting period can vary from few months to a few years, depending upon your medical condition. For specific diseases, the waiting period can go up to 2 years from the commencement of the policy. Read More.

3. Limit on the Room Rent

Room rent limit is a tiny clause that is buried in the text of a health insurance policy details. This clause can result in maximum headache. As per your health insurance policy you will be entitled for maximum per day room charges.

The problem arises when you realize that the hospital has better rooms. If you occupy a room that costs more than the room rent expense covered by the policy, the remaining amount has to be borne out of your pocket. And that’s not all!

All the other expenses that you incur will be charged as per the room type. The insurance company will not only deduct the room charges above your eligibility, but all other hospital charges will be proportionately deducted except for products with MRP.

The table below illustrates an example which will make it simpler for you to understand

Sum Insured

5.00,000

Room rent limit

3,000

Actual Room Rent

7,000

Number of days of hospitalization

5

   
 

Actual Bill

Reimbursed Amount

Rationale

Room Charges

35,000

15,000

Proportional

Doctor Charges

14,000

6,000

Proportional

Medical Tests

7,000

3,000

Proportional

Surgery Costs

1,40,000

60,000

Proportional

Medicines

21,000

21,000

At MRP

Total costs incurred

2,17,000

1,05,000

 
   

Hospitalization costs which you have to bear

1,12,000

 

Hence, you have to be clear on the policy that you have bought and what it covers, before you decide on a room in a hospital.

4. H2:Renewal Ceasing age and Age Brackets

When you buy a health insurance policy, it may never occur to you that you have to take into consideration the age of policy renewal. Renewal ceasing age refers to the time, when the insurer will refuse to insure your policy. The higher the renewal ceasing age, the better it is. You should have a clear picture on the maximum age, when you can renew an existing policy.

Make sure that you clarify this point with your insurance agent, before deciding on the policy. The insurance company is not bound to remind you about a policy renewal. It is advisable that you renew a policy before the expiry date. You would not be able to enjoy the benefits and discounts that you are entitled to, if you do not renew your policy on time.

Be Careful!

A careful reading of the policy is required if you want to identify the hidden clauses. When you have decided to opt for a health insurance policy, ensure that you read the fine print. If you have doubts after reading the fine print, do not hesitate to consult the insurance agent.

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