Top 14 Common Clauses in Health Insurance

Introduction

Table of Contents

Whenever we apply for health insurance, the insurance company completes its medical underwriting and all kinds of formalities and expects an applicant to provide all the correct information like basic information like name, address, Phone no. PAN Card No. Gender, DOB, details of family members; Key Information: Occupation, Past Medical History/Illness, Surgery, current health status and self-declaration by the applicant, after evaluating all this information the insurance company feels that the applicant needs to undergo a physical if any.

The advisability is found that the company either accepts it without loading or then imposes a loading which can be a small % of the total premium like 10%, 15% etc. If the proposal is accepted with the medical condition to “Pre-Existing Disease” clause is imposed and a waiting period of 24, 36 or 48 months is imposed, the “PED” waiting period varies according to the plans.

If after the medical procedure, the insurance company decides not to give the policy to the applicant then after deducting the medical charges the money is returned to the applicant.

Once the policy is issued, there is a contract between the insurer and the insured person, there are certain clauses in the contract which are mentioned below. Which has been decided by the Insurance Regulator (IRDA):-

14 Common Clauses in Health Insurance

SUM INSURED
DATE OF ACCIDENT
24 HOURS HOSPITALIZATION
LIMITS OF USAGE
DOMICILIARY HOSPITALISATION BENEFITS
Cashless Hospitalisation Procedures
Deductible
Co-Payment
Waiting Periods
Pre-Existing Illness
Exclusions
Cancellation Clause
Renewability Clauses
Enhancement of the Sum Insured

1. SUM INSURED

The liability limit of a health insurance policy is up to the sum insured, if the insured person has to pay from his pocket, then there is no Claim Bonus in the policy if NCB is to SI+. NCB will be utilized. Sum Insurer cover can be either individual or in the form of a family floater, like taking example, Mr Ram and his wife have taken a family floater policy till the cover is Rs 25 lakhs, and they are covered jointly in the sum insured. If both of you have different insurance amounts, you can avail of 25 lakhs and 25 lakhs in the same way. please remember one thing the Insurance company is only liable to plan the claim as its sequence (Base SI+NCB+SNCB) = per event of hospitalisation) and the following will apply on 2nd event of hospitalisation only up to the basic SI -Reload /Recharge/Refill/Unlimited-RRR

2. DATE OF INCIDENT

All the medical incidents during the policy period will be paid as per the policy terms and conditions, e.g suppose Mr. If the policy issue date is 01/12/2022, its cover will be 30/11/2023 and as per the terms of the policy in this period, even if the incident occurs on 30/11/2023, hospitalization will be on that day and for the next 10 days, the claim will be payable as per the eligibility.

3. 24 HOURS HOSPITALIZATION

Treatment expenses will be borne by the insurance company if there is a minimum of 24 hours of hospitalization justified. For some cases there is an exception where 24-hour hospitalization is not mandatory due to medical treatment advancement or fewer hours are required to operate the treatment procedures like Surgery related to eye, ENT, kidney stones etc, these are only the indicative list, it is called the “Day Care Treatment” it may be a very huge list for these day care produce or treatment

4. LIMITS OF USAGE

In this condition, the limits are kept in two categories, first hospital and room rent, let us talk about what should be the eligibility of the hospital. Hospitals – Should be duly licensed and registered, the hospital should also be under the supervision of a registered medical practitioner. For metro and big cities, it should be a minimum of 15 beds and for smaller towns and rural areas it should be a minimum of 10 beds.

5. DOMICILIARY HOSPITALISATION BENEFITS

This applies to hospitalization periods of more than 3 days, subject to certain conditions, such as that the patient is not able to go to the hospital and can be treated at home provided the hospital has assured that the patient will Treatment can be done at home also.

6. Cashless Hospitalisation Procedures

Health insurance companies have tied up with hospitals and brought them into their network, in which an MOU is signed between the hospital and the insurance company. Based on this MOU, the company pays the bill for the treatment of the patient. If a hospital has signed an MOU of Rs 20000 for some disease and final discharge time. There is two way to get the hospital in the panel/network, first company will manage the network hospital emplacement through its employee called In House TPA, another other is to hire the IRDA registered Third third-party administrator (TPA) to get this work and co-coordinate with hospital and insurance company for cashless claims activity, (source https://irdai.gov.in/document-detail?documentId=1339202)

7. Deductible

There is a clause in the base policy of health insurance that on the first claim of every year if your deductible is maintained i.e. the 1st row will be deducted from your net admissible claim amount; it can be Rs. 10K, Rs. 20K or even Rs. 25K, depending on the plans and according to whatever option you have taken. Thing deductible option will not reduce the SI.

8. Co-Payment

Some health insurance plans have a “co-payment” option, especially in plans for senior citizens. In this option, the percentage of co-payment on the total admissible claim is 10%, 15%, and 20% which varies as per the plans. In addition, Co-Payment will not reduce the SI.

9. Waiting Period

Health Insurance has some waiting period to cover all the admissible treatment, please refer to the below chart to clearly this: –

10. Pre-Existing Illness-

IRDA’s standard definition for Pre-Existing Diseases / Illness is “Pre-Existing Disease means any condition, ailment or injury or injury or related condition(s) for which there were signs or symptoms, and/or were diagnosed, and/or for which medical advice/treatment was received within 48 months before the first policy issued by the insurer and renewed continuously thereafter.” What this means in simple words is that if you have been medically diagnosed with any type of disease before the policy issuance, information about which is available to the policy applicant, all of them will be kept under the heading Pre-Existing Diseases.

11. Exclusions

Every common health insurance policyholder always has this question in their mind as to whether all types of treatments are covered or not, the indicative list of whether all types of treatments are covered in health insurance is given in another article. the link to which is given below (https://awarenessgyan.com/what-does-health-insurance-not-cover/

12. Cancellation Clause

Cancellation will be made from any side, based on Fraud, Moral Hazard, Misrepresentation or non-cooperation from the insured parties, simultaneously customer can also cancel the policy if the terms and conditions, features or any other reasons. if the policy cancellation request comes from the customer side within the policy documents received, the insurance company cannot deduct their administrative / policy source cost from the client, if the application But unless the policy is cancelled, if any claim is raised then the claim has to be paid to the insurance company.

13. Renewability Clauses

In health insurance, renewal can be done for a lifetime, and the insurer can never deny renewal irrespective of the number of claims, yes if the insured person gets any such serious illness then the sum insured will not be enhanced but the existing sum insured can be renewed by the insured person to their lifetime. One more condition is if the particular plans are withdrawn by the company then policy policyholder can’t renew their policy but in this situation insurance company will provide the option to policy holder that please switch to another available product after the medical underwriting. The grace period for health insurance plans is 30 days, but in the grace period, the insurer is not liable to pay the claim.

14. Enhancement of Sum Insured

For sum insured enhancement will apply at the time of renewal only, and the decision to be accepted by the insurer after medical underwriting, claims history, past illness, and present illness. Policyholders can’t enhance their SI if any ongoing treatment scenarios.

Conclusion – Now it is clear that you do not get a claim just by purchasing health insurance, you should know how it works

Points to be remembered while purchasing health insurance: –

Check all the clauses through the policy wording
Cannot relay to any advisor for policy terms and conditions, it is the insured person’s duty to get details information about the plans
Compare Premiums from the top 5 Health Insurance Plans
Do a review of the policyholder’s Claim and services Experience via online and offline as well.
Cross Check all the information in the proposal form, like basic and Medical & Lifestyle habits as well
Co-operative with insurance companies for their Medical Underwriting Process

Top 14 Common Clauses in Health Insurance

Introduction