One of the most important steps to take when planning your finances for the future is to make sure that you are insured. Be it a life insurance policy, health insurance policy or a motor insurance policy, the policyholder and his/her dependents are financially protected following an unforeseen event such as an accident, death, illness, or disability. With regard to health insurance, the policy ensures that the expenses for hospitalisation, surgeries, or treatments are covered up to the sum assured of the policy that one holds. This reduces the out-of-pocket expense of the policyholder and ensures that he/she is not financially set back if he/she is hospitalised or has to receive treatment.
However, quite often health insurance policyholders assume that just by paying the premium of the health insurance policy, the insurer will cover the expenses come what may. This is a false notion, as insurers have every right to not offer coverage for the medical expenses, irrespective of whether the policy is valid, and most often, their reason to reject a health insurance claim boils down to the mistake of the policyholder. Following a claim for medical coverage by the policyholder, the insurer assess whether the policyholder is eligible to receive coverage and the factors that lead to the policyholder raising the claim. That said, in order to help policyholders avoid claim rejections, we’ve listed out a few instances when insurers will reject claims and the reasons behind the rejection of the claim.
Reasons for Health Insurance Claim Rejections:
Some of the common reasons why health insurers reject claims are listed below:
- Incorrect facts or non-disclosure of facts
If the policyholder submits wrong information at the time of the issuance of the policy, such as wrong credentials, if he/she suffers from a pre-existing disease or is a smoker, then the insurer has every right to reject the claim. In addition, giving wrong information with regard to illness or disease, or what leads to the hospitalisation of the insured person, is another reason why insurers will reject the claim.
- If the disease or treatment is under the exclusion list
If the policyholder raises a claim for coverage of medical expenses, and if the treatment or disease is listed under the exclusion list of the policy, then the insurer will reject the claim. In addition, if hospitalisation or illness is caused as a consequence of any of the conditions listed in the exclusion list, then the claim will be rejected. For example, if the insured person meets with an accident because he/she was intoxicated, if the insured person tried to commit suicide, etc.
- If the policy has lapsed
If the policyholder raises a claim and the policy has lapsed, then the claim will be rejected by the insurer without thinking twice. Following the expiry of the policy, the policyholder is given a grace period to pay the premiums. If he/she fails to pay the premiums during the grace period, then the policy will lapse.
- If the policyholder has not disclosed information about his/her existing policy
If the policyholder is applying for a fresh health insurance policy and does not disclose facts about his/her current policy, then the insurer has every right to reject the claim of the policyholder.
- If the policy is still in the waiting period
For a lot of policies, the policyholder will have to serve a waiting period before he/she can raise a claim. In addition, the treatment for certain diseases and critical illnesses comes with a waiting period. If the policyholder raises a claim during the waiting period, then the claim will be rejected.
What to Keep in Mind to Avoid a Health Insurance Claim Rejection:
Policyholders have to keep in mind the below-listed points to avoid a claim rejection:
- Ensure that you fill the form
Most often, policyholders leave the filling of the form to the insurance agent, and in the process, some details mentioned on the policy issuance document might be wrong. The credentials and other personal details of the policyholder have to match other government approved documents, if not, this might come to the notice of the insurer at the time of the claim and the insurer will reject the claim.
- Be honest when disclosing facts
One of the main reasons why claims are rejected is because the policyholder hides information to get a better premium rate. Not disclosing facts such as whether you are a smoker, if you suffer from pre-existing diseases and other relevant information will result in the insurer rejecting the claim. In addition, the insurer has every right to even terminate the policy if the policyholder has failed to disclose facts.
- Read the fine print of the policy document
As clearly mentioned, policyholders often assume that just by paying the premium of the policy, the insurer is entitled to cover all hospitalisation and treatment expenses up to the sum assured of the policy. However, the insurer will extend coverage for hospitalisation only if the treatment or hospitalisation does not fall into the exclusion category. If the treatment or reason for hospitalisation is under the exclusion list, then no coverage will be extended.
- Getting unnecessary treatments or tests
Since they have a health insurance policy, policyholders often assume that the insurer will cover all the costs. This could lead to the policyholder taking unnecessary tests which will very well be supported by the hospital. However, with regards to tests and treatments, there are certain policy terms and conditions that the policyholder might not be aware of.
- Check which treatments and diseases the policy covers
When buying the health insurance policy, the policyholder has to go through the policy document thoroughly and see what sort of treatments, surgeries, diseases, and illnesses the policy will cover. If the disease or illness is not covered by the policy, then the claim for coverage of medical expenses will be rejected immediately.
- Know the listed hospitals
Every health insurer has a list of hospitals that they work with to offer their policyholder the benefit of the cashless facility. Prior to admission, ensure that the hospital is listed by the insurer else you will have to settle for a reimbursement claim.
All in all, when buying a policy, the policy applicant has to take the responsibility of going through all the policy terms and conditions, the extent of coverage, what will be covered by the policy, and the listed hospitals. When raising a claim, the policyholder has to be 100% sure that he/she is eligible to receive the coverage and by being confident, he/she can take the the insurer to task if by chance the claim is rejected.