The Covid-19 pandemic has made many of us realise the importance of health insurance to secure our families from financial hazards. No doubt, the penetration of health insurance has been rapidly growing in recent times but only a few policyholders are aware of claim settlement processes and related issues. Many policyholders are under the impression that they are eligible for a complete claim amount. But, in reality, the insurer may not settle the entire claim amount. For the benefit of the unversed, ETV Bharat explains six reasons why your insurer may not settle the complete claim amount.
1. Copay
Copay is a cost sharing provision where a percentage of the claim must be borne by the customer. For instance, if you have a 20% copay in your policy, and you make a claim for Rs 50,000, you will have to bear Rs 10,000 and the insurer would pay Rs 40,000. In some policies, the choice of room, the city of treatment, etc would trigger the quantum of copay, hence understanding these provisions is important before purchasing a policy.
2. Room rent restrictions
The most common mistake customers make is not paying attention to the restrictions on room rent and room category in the policies. Depending on the sum insured and the hospital you choose, the out of pocket expenses will vary. Generally, insurers limit the room rent to 1 or 2% of the sum insured you choose, though this limit cannot be applied in case of admissions in the ICU as per the regulations of the Insurance Regulatory and Development Authority (IRDAI).
So, if you have a policy of Rs 3 lakh, you are eligible for a room rent of Rs 3,000 (assuming a 1% limit) and if you get admitted in a room with a daily room rent of 5,000, you would end up paying Rs 2,000 from your pocket towards room rent alone. Hence, it is not advisable to buy a plan with a very small limit on room rent.
3. Geography-based restrictions
Some policies have geography-based pricing with customers in metros paying a higher premium than those living in smaller cities and towns. If a customer buys a policy in a small town and seeks treatment in a metro, there would be a copay. This is not an issue for general illnesses like fever, diarrhoea, etc where treatment can be taken in a small town.
