Let not the small print surprise you

Claims payment is a sticky point for any policyholder, but is the insurer to blame?

It’s cliché that insurance companies ‘find’ a way not to pay your claim. However, when the ‘way’ had already been spelt out in your policy, it was up to you to be aware.

‘The large print giveth and the small print taketh away’ is exactly how my friend felt about the hospitalisation policy for her mother.

The policy was taken when her mother was well over 70 and the insurance company would offer only ₹2 lakh as sum assured to start with. As is usual, plans of enhancing the sum assured at subsequent renewals were forgotten.

When she required an operation, reality dawned that the daily room rent allowed under the policy was limited to 1% of the sum assured, that is, ₹2,000 per day.

However, the rate for the category of room that my friend’s family preferred cost four to five times as much.

This was not the only setback. In many hospitals, most other treatment costs including medical practitioners’ fees and ICU charges are pegged to the category of room you are in. That is, if you are in a semi-private room costing ₹8,000, your surgeon’s fee would be ₹X. If you were in a private room costing ₹12,000, it would be 1.5 times ₹X. There is some logic in there somewhere, but it was a total let-down for my friend who thought that she would be able to claim ₹2 lakh.

Sub-limits are only one type of small print that you have to become familiar with. If you had been aware of this, you may have been focussed on increasing your sum assured or taking an additional policy. Or, maybe, you would have had a rethink about a policy at all.

Other ‘small-print’ clauses in your hospitalisation policy, which, by regulation cannot be in actual small print, include standard exclusions, time-bound exclusions and specified limits for certain treatments.

Policy exclusions

Standard exclusions would include treatment outside India, treatment for self-inflicted injuries and cosmetic surgery except if necessitated due to an accident.

Time-bound exclusion refers to the waiting period — usually about 3 to 4 years after taking the policy — when pre-existing diseases are not covered. Some procedures are covered only after a 2-year waiting period and they will be listed on your policy document.

Some treatments, such as cataract surgery, have specified claim limits. Usually, you can enhance these limits by paying an extra premium.

Read in depth

So, it pays to read through what each policy offers and excludes and to spend quality time comparing the offerings of different companies before you sign up. Hospitalisation insurance is an enduring requirement and you are assured of lifelong renewal from your insurance company as per regulations.

Though you have the comfort of portability, which means you can change your policy from one insurance company to another, making the correct decision on the right fit the first time around is a prudent way to spend your premium money.

(The writer is a business journalist specialising in insurance & corporate history)

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