The pros and cons of multiple health insurance policies

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The cost of medical treatment in our country is increasing day by day and the pandemic has brought the topic uppermost in the mind of most of us. Even individual health insurance worth Rs 5 lakh is really sufficient nowadays. Currently, many of us have multiple health insurance policies. For most salaried persons, one is an individual policy while the other is a group policy. Some might have more than two personal health insurance policies.

But how many of us know that one can claim from multiple policies at a single time? But for that, you have to follow certain things. Money9 gives you a guide on how one can claim from multiple policies and the procedure.

Multiple policies

Experts feel that nowadays having a single policy is not a very good plan for your health coverage. You should have multiple policies including a group one too. 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.

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 and one policy appears insufficient, feel experts.

If you have two 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.

And you have to inform both the companies about the alternative one which you have early before filing the claim, said an official from Bajaj Allianz life insurance.

How many are permissible

There is no cap on the number of health insurance policies one can buy, but experts suggest sticking to a maximum of three policies with an adequate sum insured is enough.

Out of these three, one should be a group policy which may be offered by your employer and the rest two should be personal one. But if you have one personal and one group policy then it might work fine. There is no bar on the number of policies one can buy.

How to claim

Suppose a person has two health policies for Rs 1 lakh and Rs 2 lakh each and he makes a claim of Rs 50,000. In this scenario the insurers will pay Rs 16,666 (Rs 1 lakh sum insured) and Rs 33,333 (Rs 2 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.

Also, you must obtain the claim settlement summary and certified bills from the first insurer before going to the second insurer, said Rinku Banerjee, a health insurance agent based in Kolkata handling more than 250 clients.

Understand first

You must first take cognizance of the total claim amount and the sum insured available on your various policies. Check if any clause for deductibles or co-payment exists. 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.

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 Rinku Banerjee. If you have a policy from your employer and an individual policy, it’s advisable to use the employer-offered 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 with your insurer first then proceed.

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 if any.