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Reasons for your individual health insurance plan to get rejected

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We live at a time when affording basic healthcare facilities is also difficult due to their rising prices. That’s why staying protected by an individual health insurance policy is vital. However, if you ever speak to anyone whose claim request was denied, he/she might tell you that buying a health plan is a complete waste of money. Such statements lead to more misinformation. Well, merely purchasing a plan doesn’t guarantee claim approvals. Every policy has terms and conditions. Let’s take a closer look at the different reasons why your individual health insurance claim gets rejected and how to avoid such rejections.

What is Health Insurance?

Health insurance is your trustworthy companion when you are in a medical crisis. If you need hospitalisation due to an emergency or have to undergo a planned surgery, health insurance will cover the hospital bills up to the sum insured. If your health plan has a sum insured of INR 5 lakhs, and the surgery costs INR 4.5 lakhs, insurance will cover a major chunk of the expenses except the deductible, which you must pay. But if the cost exceeds the sum insured, you must pay the excess amount.

So, health insurance is an agreement between the insurance company and the policyholder. The insurer agrees to cover the medical costs, and the insured has to pay a premium for availing of the benefits. There are different types of health insurance plans – individual health insurance, family floater, senior citizen healthcare plans, critical illness healthcare policy, group health insurance, etc.

Is Health Insurance Compulsory in India?

Health insurance is not compulsory in India, but investing in a comprehensive healthcare policy for financial security against a wide range of ailments is wise. A health insurance plan covers the costs incurred on hospitalisation, pre- and post-hospitalisation, daycare treatments, domiciliary care, mental healthcare, organ donor expenses, AYUSH treatments, and more. With health insurance, you can also access quality care and treatment without worrying about the costs. You can also avail of a tax rebate on the premium paid towards a healthcare policy.

Reasons Why your Health Insurance Claim can get Rejected

It can be distressing when your health insurance claims get rejected, and you end up paying for the treatment costs from your pocket. It’s important to be aware of the reasons behind claim denials so you can avoid them in future.

1. Lapsed policy:

When you raise a claim, the insurer will first check whether your policy is active. If you have failed to renew the policy on time and it has expired, the insurer is not liable to cover your medical expenses. Every policy has a validity period, and you must renew it by paying a premium before the due date. If you miss the due date, there’s a grace period, which varies between insurers; if you also miss the grace period, the policy will be considered null and void.

2. Incorrect information:

One of the primary reasons for claim denials is incorrect or wrong information on the claim form. While filling up the form, make sure you enter the correct details with regard to the policy number, name, age, details about the illness, etc. Any incorrect/missing information will lead to the rejection of your claim.

3. Filing claim during the waiting period:

The waiting period is the time you have to wait to avail of the coverage benefits. Most insurance plans have waiting periods for pre-existing conditions, specific ailments, maternity coverage, etc. If you have raised a claim within the waiting period, your claim is likely to get rejected.

4. Hiding information about pre-existing diseases:

If you have any pre-existing conditions like diabetes, hypertension, or heart ailment, you must honestly disclose them while buying health insurance. If your claim is related to a pre-existing condition that was not disclosed, it will lead to claim rejection. The insurer estimates the premium based on your health profile and risks; non-disclosure of information will misrepresent your health profile.

5. Delay in filing the claim:

Most insurance companies have a timeframe within which one must notify the insurer and file the claim. The insurer has the right to deny your claim if you fail to submit the claim within the specified timeline. Timely filing of claims is crucial for the smooth processing of claims.

6. Insufficient documentation:

Insurance companies require certain documents to check the authenticity of claims, which you must submit at the time of settling claims. If some documents are missing or incorrect, it can lead to denial of claims. So, double-check the documents before submitting the claim.

7. Exhaustion of sum insured:

If the sum insured has already been exhausted in previous claims, you are not eligible to file any more claims during the same policy year. Similarly, if the claim amount exceeds the sum insured, the insurer will reimburse only up to the sum insured. The payment of the excess amount must be borne by you.

8. Out of coverage:

If the claim is for a treatment not covered by your policy, the insurer will not compensate for the costs incurred. It is, therefore, imperative to carefully read the inclusions and exclusions before buying a policy and also prior to raising a claim. Remember, every policy has certain exclusions and limitations.

9. False information:

If the insurer suspects you have provided false information, your claim can get rejected on the grounds of fraud.

10. Pre-authorisation:

Some treatments or procedures require prior approval or pre-authorisation from the insurance company. If the insured has gone ahead with the treatment without taking approval, the claim may be rejected.

How to Avoid Claim Rejections

Here are some ways to avoid claim rejection in health insurance –

• Renew your policy on time for continuity in coverage. Insurers generally send reminders at least 15 days prior to the policy’s expiry date. So, as soon as you get the reminder, pay the premium for renewal of the policy.

• Ensure you provide correct information relating to your medical conditions while buying the policy. Also, you must disclose all pre-existing health conditions.

• If it’s a cashless claim, you need not worry about the payment because the insurer will settle it directly with the hospital on the day of discharge. However, if it’s a reimbursement claim, you must submit the claim form along with the required documents within 15 days after discharge from the hospital. The timeline can differ from insurer to insurer.

• Read the policy document carefully to understand the terms and conditions of coverage.

• Inform the insurer on time. If it’s an emergency hospitalisation, notify the insurer within 24-48 hours of getting hospitalised; in case of a planned hospitalisation, you must inform the insurer at least 2-3 days in advance.

Conclusion

The whole purpose of having a health insurance plan is financial security during medical emergencies or planned hospitalisations. When a claim gets rejected, it can get stressful. So, to avoid claim denials, you must be aware of the steps mentioned above and reduce out-of-pocket expenses.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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