How to Claim Health Insurance From Multiple Insurers?

In a time when medical expenses are continually increasing day by day, a need arises to have higher amounts of sum insured in health insurance policies. However, insurance providers cannot provide higher insured sums beyond a certain limit due to various factors.Due to this, individuals seeking expansive health coverage with high insured sums are posed with a problem, because no single health insurance policy can give them what they’re looking for. In such cases, these individuals have no other option but to go for multiple policies, the combination of which can give them the higher insured sums that they require.An individual may also opt for multiple policies if they want health coverage for themselves, their spouse, parents and children. Also, employees of firms may buy additional individual health insurance because their employer’s insurance policies are not sufficient or do not cover certain illnesses.So, even when one cannot get a high sum insured policy, they can take multiple policies. Doesn’t that solve their problem and give them extra financial cover? The answer is yes, it does provide additional cover, but the actual claims process is not so simple. One cannot simply claim an amount from one insurer and claim another amount from another insurer. There are certain protocols that need to be followed during the claims process. Read on to find out the exact process of claiming from multiple health insurance policies .

The first thing that multiple policy holders need to know is that it is mandatory to inform all of your insurers about the existence of the other. When you’re filing your claim and filling out the form, there is a disclosure section that specifically asks you whether you hold any other insurance policy and asks for details of the policy.You must be honest and accurate about this disclosure, failing which you may be held responsible for misrepresentation and be in violation of the insurer’s terms and conditions. Non-disclosure can lead to a reduced insured sum which can put unnecessary financial burden on you to pay the rest of the medical expenses.But what is the need for disclosure? Why do insurance companies need to be informed about all my policies? The answer lies in a clause called the contributory clause.

Before we understand the process of claiming multiple policies, we must understand the contributory clause, which is a clause included in most insurance policies. The contributory clause states that if a person is holding multiple health insurance policies, then the claimed amount must be shared by all the insurers in equal proportion to the sum insured by each.For eg. If Suresh has Policy A with a sum insured of Rs. 4 Lakh, and another Policy B with a sum insured of Rs. 2 Lakh, then according to the contributory clause, if a claim for Rs. 1 Lakh is made, then both Policies A and B will contribute in the following ways: Policy A (4 lakh sum insured) will pay Rs. 66,666/- Policy B (2 Lakh sum insured) will pay Rs. 33,333/- Thus, the contributions of both policies are an equal proportion of their insured sums which is 16.666 %.It must be noted, however, that recent rule changes regarding the contributory clause have simplified this process. According to the new rules, the contributory clause only comes into effect when the claimed amount exceeds the sum insured. If the claimed amount is less than the sum insured of either policy, then the insurer cannot impose a contributory clause.

Let us now understand the procedure that you must follow to claim multiple policies.

Scenario 1

In this case, you have multiple health insurance policies, and your claim amount does not exceed the sum insured of any of your policies. For eg.. Your claim amount is Rs. 1 Lakh, while both your Policies A and B have sum insured of Rs. 2 Lakh each.Here you’re absolutely free to choose which insurer you want to choose for your claim. You may choose either one, and get the entire claimed amount settled. You must still disclose the details of all your other policies to the insurer from whom you’re claiming your insured sum.

Scenario 2

In this case, your claim amount exceeds the sum insured of either policies. For eg. Your claim amount is Rs. 2 lakh, while both your Policies A and B have sum insured of Rs. 1 Lakh each, and you want to use both of them to make the settlement.Here you need to first make a claim with one insurer, you’re free to choose which one and inform them about the existence of your other policy. The insurer will impose the contributory clause and settle your claim based on their calculations. You need to then take the settlement certificate and submit it to the second insurer along with all other documents. The second insurer is now liable to pay the balance claim amount.

• The contributory clause is not applicable when the cover or benefit is not related to the medical expenses, or if the cover is fixed in nature, like in critical illness insurance , where a fixed, lump sum amount is paid.
• If you have two individual policies, claim the older policy first, because the waiting period for pre-existing diseases will be over and you can benefit from it.
• In case you have a group health insurance policy as well as an individual insurance policy, then it is wiser to go for the group policy first. Group policies usually do not have waiting periods for pre-existing diseases and claiming them is less complicated. Also, if the entire claim is carried out by the group policy, the co-claim bonus of your second policy will remain unaffected.

In this way, you must keep the above situations in mind when claiming from multiple insurance policies . Getting more than one health insurance is a great idea, but one also needs to know how to best utilize them and follow the required procedure in order to make the most of them. Always remember to read all clauses, terms and conditions of any health insurance policy that you buy to understand them and avoid any unfortunate surprises in times of crisis.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.