Know why health insurers reject claims

Every insurance-be it health, life, motor or travel-is basically a contract between the insurer and policyholder based on principles of utmost good faith. If the policyholder fails to exercise complete honesty and accuracy while providing the information to the insurer, the insurer has every right to reject the claim stating it as the reason for its rejection.

According to a recent finding, the number of customer complaints against health insurers has significantly gone up primarily on account of dissatisfaction with the claim settlement process. However, after proper investigation and examination, it has been found that it is the policyholder who is at fault and responsible for rejection of health insurance claim. Some of the prominent reasons for rejection of claims are not declaring pre-existing diseases (PED), less or no knowledge about room-rent capping, extent of coverage of OPD expenses, day-care procedures covered and not filling the claim process completely.

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Stringent underwriting process

As a policyholder, it is important to understand that your job does not end at selecting the insurer with the highest claims ratio. It's much more than that! Health insurers these days are exercising extreme caution. The underwriting processes have become much more stringent, resulting in increased proposal rejections. This is the reason why policy seekers while buying a health insurance policy need to be extra careful. This has made it very important to pre-disclose all your medical conditions, including both current and past medical history.

The most important thing is to be mindful of detailing pre-existing disease -any ailment a customer had either as symptoms or was diagnosed with and received medical treatment for the same throughout the 24 months prior to the policy being issued by the insurer. If any ailment not declared earlier and found later, may restrict you from getting the claim proceeds.

As per a recent survey by ICICI Lombard, over 50% of the policyholders are not sure whether they should disclose their pre-existing ailments at policy inception. Moreover, over 27% policyholders say they would rather not declare any PED while purchasing the policy while around 30% feel they do not need to disclose pre-existing lifestyle diseases like diabetes and hypertension if they are under control. The fact is it is very important to disclose any PED while buying a health insurance policy to avoid claim rejection.

Inclusions and exclusions

Know the various inclusions and exclusions under your health insurance policy. Often people assume that their health insurance policy covers the OPD expenses incurred including doctor consultation fees and cost of medicines. Before filling a claim that includes OPD expenses, be sure if your insurer covers you for the same and if buying a new policy, do buy a policy that even covers OPD expenses along with day-care procedures.

Talking about rejection of claim due to exceeding room-rent limit, the sub-limit on room-rent is the most important. In most policies with sub limits, the cap on reimbursement of claim is linked to the room-rent limit. To avoid rejection of claim, it is always better to stick to the room-rent limit. If the sum insured mentioned in your policy is Rs 5 lakh, it is advisable to choose a hospital room with rent equal to 1% of the sum insured, i.e., Rs 5,000 or lower.

The writer is business head, Health Insurance, Policybazaar.com

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