How to manage multiple Health Covers!
An increasing stressful life coupled with the wide variety of healthcare insurance plans available in the market today has made a number of individuals to opt for more than one health covers. A majority of salaried individuals covered by their respective company are also on the lookout for stand-alone retail health care plans to compensate for a wider health coverage in case of a medical emergency or in case of a red slip from the existing employer. Several others especially high net worth individuals have a tendency to opt for more than one health insurance plan to increase their health cover protection costs.
Is it Necessary?
Here are cases where multiple policy combinations are useful
Employer’s Group Insurance Policy + Individual Policy: Group insurance policies are usually more relaxed when it comes to covering pre existing illness while individual retail policies provide insurance on such diseases only after a lock in period of 3 to 4 years depending on the policy terms and conditions. So a group policy helps here in this case. Also if your group policy’s limit is exhausted and at the same time an emergency has come to you or anyone in your family, your individual health cover will be a solace for you.
In case of pre existing illness or any doubtful claims you can request the payout with the group insurance provider. The other one can be kept as a reserve.
Health Plan + Critical Illness Plan or Personal Accident Insurance: Several life and general insurance companies sell separate fixed benefit plans, critical illness covers, personal accident insurances ULIP Health plans and hospital cash-benefit policies. As health plans provide insufficient covers at times, several people take these plans separately. These plans provide a onetime fixed sum in case of any hospitalization due to any of the diseases or situations as mentioned in their clauses which has higher expenses, usually beyond the limits of a general health cover.
While having multiple health covers are in fact a good thing from an individual’s perspective, it is imperative for individuals to understand its intricacies in case of claims. Also one needs to thoroughly inspect whether they are really useful or simply increasing your expenses. Health insurance plans have been largely misunderstood by a wide section of individuals due to various intricacies and technicalities.
Transparency is the key before signing multiple policies: Many people are unaware of the intricacies involved with the transparency while having more than one health covers. Most insurance companies have a clause seeking details of any existing health covers. Many of us do not disclose our existing health covers even though it is mandatory under the rules as well as a moral obligation. One of the most misunderstood perceptions for most people is that disclosing any existing health covers may hamper any possible medical claims in the future. But the fact is that claims are not always affected by multiple health covers.
If you have a group plan: In case an individual has a combination of group as well as an individual cover policy, it is imperative to note that experts say to use the group plan first. Because claims made against your group policy will not increase your premium while you apply for renewal. Whereas other health covers may charge a lodging fee while applying for renewal in case you had claims during the previous year. Also group plans do not have any restrictions in connection with pre existing illness, where as normal health covers do have it for the initial 3-4 years.
Multiple Personal Plans: For individuals having more than one insurance covers from two different insurance companies, any pay out request would be settled in accordance with the ‘contribution clause’ in accordance with IRDA rules. In case the operating principals of both policies are similar to each other, the contributions for any claims would be divided between in the two companies evenly.
So proceed your claim request with one insurer by submitting original documents and then issue a written request along with it mentioning the claim balance you would like to have. After processing the claim with the first insurer, your TPA will issue a settlement note to the other insurer along with certified copies of documents.
In case of pre-existing illness both insurance companies will make their payments only according to their norms.
Fixed Benefit Policies: Fixed benefit policy plan as the name suggests offers a onetime fixed sum in case of any hospitalization and individual can claim insurance cover from both insurance companies separately. Fixed benefit policy plans include critical illness plans and disability plans. The reimbursements made by critical illness cover in no way affect the claim settlement of a general health cover, as the two are separate entities.
While insurance companies reimburse clients depending on the illness covered and the sum insured by the policy holder, different insurance companies have different benefits associated with various covers depending on the type of policy taken and its combinational factor with other existing policies. Also if you are taking two policies from two different insurance companies, an important thing to check is the TPA. If for policies the TPA is the same, claim settlement will be easier.
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