Ask Mint | Spelling error can make claims tough

Ask Mint | Spelling error can make claims tough

Do health insurance policies cover all major diseases?

—Sudha T.

A health insurance policy in India is a hospitalization reimbursement policy. It covers all the expenses incurred for treatment while the insured is hospitalized, irrespective of the disease. But for certain major ailments, such as cancer and heart diseases, a lot of money is also spent outside the hospital. Health insurance does not cover these expenses.

My health insurance certificate has a minor spelling mistake. My agent assures me that I need not worry and he will take care if any issue arises. What should I do?

—Bobby Arora

An insurance policy is a legal contract, which defines the payment of claims. A minor spelling mistake may not affect the cashless process normally. But sometimes the hospital or the third party administrator may ask for a photo identity proof to cross check. Also, in case of a reimbursement claim, the insurance company will make the cheque in the exact name mentioned on the policy. Hence, the cheque will spell your name wrong, which may lead to non acceptance of the cheque by your bank. So, it’s better to get the name corrected.

I am 55 years old and bought a health insurance 16 years ago, which covers my spouse and my son, now 21. The premium is around Rs20,000. Can the premium amount be reduced?

—Shashank Singh

Looks like your current policy has a separate sum insured defined for each person covered. You can reduce the premium by taking a floater policy, wherein all the members of the policy are covered under a single sum insured. Any claim reduces the sum insured by that extent.

However, taking a floater policy is not advisable since as you and your spouse grow older, your chances of getting ailments and diseases would increase. It is better to keep giving this premium and keep yourself financially secure.

I have recently taken a housing loan, but the property is yet to be built. The loan providers are insisting that I take a householder’s policy, which will cover my loan and give some add-on benefits. Do such cover make sense?

—Nishant Mehta

Home loans can cover both the cost of the land the cost of building the house. However, home insurance does not cover the cost of land. Hence, you can take a home insurance only after the property is built. You can instead take a “building under construction" policy to cover the banker’s risk, while the property is being built.

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