Have multiple health insurance policies? Here’s how you can manage

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Health insurance is one of the most important things instruments of financial safety nowadays. The pandemic has drilled in us the importance of comprehensive health insurance policies. An individual health insurance with a coverage of Rs 5 lakh is not really sufficient. Many of us, who are salaried individuals, have multiple health insurance policies including a personal and a group policy. Money9 gives you a guideline on how to manage multiple health policies.

Know what they offer

First, clearly understand what coverage are those policies offering. Group insurance policies often cover maternity benefits and cataract surgery. But in personal health insurance coverage, these facilities often come with top-up facilities.

There are critical illness plans and personal accident policies, which have fixed benefits. Some life insurers also sell fixed-benefit health plans, unit-linked health plans and hospital cash-benefit policies. Since these plans are different, the claim procedures differ according to the combination you have.

Claim properly

A claim can be lodged with any of the two insurers. However, experts say one must first exhaust the group claim limit. The group health policy should be the first choice as the claim will not result in an increase in premium.

Group policies are slightly more liberal and cover even pre-existing diseases. In an individual policy, one has to usually wait for three-four years for coverage of pre-existing illnesses. Experts say, having a health plan would not affect underwriting for the second health policy and it would be treated as a fresh proposal. However, it helps if the existing policy has a good claim experience.

It is important to maintain transparency. Intimate both the insurers and their third-party administrators, or TPAs, about the claim. This will help if you exhaust the limit of the first policy and need the second one as well.

If both have reimbursement facility

If you have two reimbursement policies, the ‘contribution’ clause will kick in. This means both insurers will pay in proportion to the coverage. If you have declared that you hold another health policy in both proposals and claim forms, you need not inform the second insurer separately.

In this case generally, the first insurance company can settle the complete claim, up to the sum insured limit and claim the pro-rata settlement amount under the ‘contribution’ clause of the policy from the second insurer.

Two different plans from the same insurer

If you have two different plans from the same insurer, understand the policies and procedures right at the outset. Having the same TPA for both policies may be an advantage. The claim settlement time may be less as documents for both the policies are managed by the same set of people.

The time and effort required for transfer of medical records, duplication and verification are shorter if the TPA is the same, say experts.

Same plan

Almost all of us have this combination when health insurance is concerned. Suppose a person has two health policies for Rs 2 lakh and Rs 5 lakh each and he makes a claim of Rs 50,000. In this scenario, the insurers will pay Rs 16,666 (Rs 2 lakh sum insured) and Rs 33,333 (Rs 5 lakh sum insured), respectively.

“If the policies are from two different insurers, then both the companies need to be informed about the other policy,” said Naval Goel, founder of PolicyX, an online insurance aggregator. He also said that this is important because your claim may get rejected as non-disclosure of policies is a violation of the insurance contract.

For example, if you have two health insurance policies with a sum insured of Rs 3 lakh and Rs 2 lakh respectively and you want to make a claim of Rs 1.5 lakh, then you have the right to choose either of the two policies. However, if the total claim value is Rs 4 lakh, then the insurers can choose to settle the claim in equal proportion to the sum insured.

Older and cashless first

Always remember to place the older policy first, as the waiting period and others are likely to have been completed in the older policy earlier, said an insurance agent in Kolkata. If you have a policy from your employer and an individual policy, it’s advisable to use the employer’s policy first than the individual one, she added further.

If you have two policies with the same 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. For this situation, you should contact your insurer first then proceed.