It makes sense to exhaust the sum insured provided by your employer's group health insurance first
Line up your individual health insurance and top-up plans next
The number of covid-19 cases in the country are spiking with each passing day, resulting in more people getting treated in hospitals or make-shift facilities. For individuals with co-morbidities, the period of hospitalization, due to covid or other diseases, could be longer, resulting in huge medical bills.
But if you have multiple health policies, there is no need to worry. You are allowed to use multiple policies, such as the group policy from your employer, your individual health policy and your top-up health policy, for a single claim.
We tell you how to go about it and the terms and conditions to keep in mind.
Using multiple policies
“Keeping in mind the increasing medical costs, policyholders may purchase multiple health insurance policies across different insurers if there’s a need for a higher sum insured in case it is insufficient under a single policy," said Bhaskar Nerurkar, head, health claims, Bajaj Allianz General Insurance.
If you have two indemnity policies, you have the right to choose the policy under which you want to make the claim first. If the claim amount is higher than the sum insured under the policy on which you first made the claim, you can claim the balance bill amount on the second policy.
Remember that while buying health insurance, you are required to fill proposal forms wherein the insurer asks for disclosure of any existing policy. “If the policies are from two different insurers, then both the companies need to be informed about the other policy," said Naval Goel, CEO and founder, PolicyX, an online insurance aggregator. Nerurkar said this is important because your claim may get rejected as non-disclosure of policies is a violation of insurance contract.
Insurance companies need this information as most policies come with a contribution clause. This clause means that if the same insured person has more than one policy, then all the policies will contribute in equal proportion to the sum insured in case of a claim.
For example, if you have two health insurance policies with a sum insured of ₹3 lakh (policy A) and ₹4 lakh (policy B) and you want to make a claim of ₹2 lakh, then you have the right to choose either of the two policies. However, if the total claim value is ₹7 lakh, then the insurers can choose to settle the claim in equal proportion to the sum insured.
Also, you will need to obtain the claim settlement summary and certified bills from the first insurer before going to the second insurer.
Things to keep in mind
You must first take cognizance of the total claim amount and the sum insured available on the various policies. Check for any deductibles or co-payment clauses. Under the co-payment clause, a percentage of the claim amount has to be borne by the policyholder, while deductible refers to the fixed amount of deduction on the claim amount beyond which the insurer will pay up.
It’s advisable to use the policy without any co-payment or deductible because both these clauses require the policyholder to bear a part of the claim amount out of pocket or through another policy. “Always remember to check the older policy first, as the waiting period and pre-existing exclusions are likely to have been completed in the older policy," said Nerurkar.
If you have a policy from your employer and an individual policy, it’s advisable to use the employer-offered policy first. Nerurkar said claim settlement is usually faster and simple in case of group policies. “Once you opt for your group policy, your no-claim bonus on the individual policy will be retained, which is an added benefit for not opting for the individual policy first," he added.
Further, if you have two policies with cashless facility, the hospital may offer you this option only on one of the policies and ask you to pay the remaining amount and get it reimbursed by the other insurer.
Also, not all the policies you’ve bought may have the cashless claims facility. You can either opt for the policy with cashless claims first or the reimbursement claim. In any case, you will have to get the claim summary from the first insurer along with the certified hospital bills and submit them to the second insurer for the reimbursement claim.
It’s advisable to go for the policy with the cashless claims facility first as you can avoid paying out of pocket and then get the surplus amount reimbursed under the second policy.
There is no cap on the number of health insurance policies one can buy, but experts suggest sticking to a maximum of two policies with adequate sum insured (one base policy and a top-up) over and above what your employer offers in order to avoid confusion at the time of claim settlement.
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