Consumer Guidance Seminar on Medical Insurance, Part 2: Understanding a Policy Document

Part 2 of 5: Understanding a Policy Document

The second section of the seminar began with Dr. Arjun Rajagopalan explaining what an insurance policy document is and what it covers. He introduced Dr. Jai Kishen Avula - a medical practitioner and an expert on health insurance who explained in detail the process of understanding an insurance policy document. He reiterated that health insurance is gaining more importance and that 60% of in-patients admitted into hospitals have medical insurance.

He explained that the “policy document” is a crucial component of the entire relationship between the insured consumer and the insuring company. It is typically a forty-page long document that covers various details on exactly what the consumer has signed up for. Details including what type of hospital accommodation is exactly covered (whether private, shared or general ward) is clearly mentioned in the document. These details are specific and limiting to each individual policy and based on what coverage a consumer has chosen. If consumers have not been explained these complex terms and conditions, one can anticipate that they are likely  to have difficulty going through the claims process encountering prolonged delays and rejections.

He  advised consumers that they should be aware that there is a built-in no-commitment “free-look” period of 15 days within which the consumer can familiarise himself with the document and if dissatisfied, return it for a full refund. Commonly though, the consumer is unclear about technical terms used within the document. Technical phrases such as “non-medical expenses” “copayment”, “deductible” frequently confuse the reader. He went on to then explain commonly-used insurance jargon terms and caveats by walking the audience through a standard policy document. He warned consumers to be alert for the following caveats listed below:

1. Is the consumer eligible for daycare? Note: Daycare is different from a regular admission.
2. Ask specifically for the Product Benefit Table from the agent.
3. Be very careful about “top-ups” or refills and all its caveats.
4. Be careful when porting from one company to another or one policy to another within the same company. There is a waiting period to accrue benefits after porting into a new company.
5. “Exclusions”: Know that there are many diseases excluded completely from payment.
6. “Personal waiting period” and what it covers.
7. Very important: Know  that conditions such as addictions, congenital conditions, puberty, dental and oral, psychiatric conditions are not covered. Therefore, if under psychiatric care at any time, you might not be covered for stomach problems. Usually, hereditary conditions are strictly not covered. 
8. “Thirty-day initial waiting period”: Some policies will pay for emergency and accidents, but some repay only for emergency. Check carefully which they cover.

1. “Other non-payables”: This is a big problem! For example, any pre-treatment “fit-for -surgery package” done before the actual surgery may not be covered.
2. What are “non-medical expenses”?

A: Note that over 200 items such as pulse-oxygen meter, pumps, ICU equipment, cosmetics used, etc. supporting a treatment may not be covered!

He also explained the following phrases:

• What is a co-payment?
  • A: Its what you first pay upfront at the hospital (say 20%).
• What is a deductible?
  • A: Its that minimum amount that has to be paid as premium without which your coverage will not start.
• What is a sub-limit?
  • A: It is the maximum amount that can be covered for each component of treatment e.g., room charge, doctor’s charges, etc. For e.g., If a total policy is for 1 lakh, and 10% is listed as doctor’s charge sub-limit, then only Rs. 10,000/- can be covered as doctor’s charge!

His final and strong advice was for all to read their policy document carefully.

Next, Dr. Jai Kishen took questions from the audience, with Ms.Saroja also in the panel.  Some observations from question-time were: 

1. Question on eye-care coverage ambiguities:

A: Yes. Insurance companies are currently guarded and strict with eye-care coverage. 

1. Question on policy cancellation:

A: The cancellation terms and refund schedules are given in the cancellation schedule in the insurance policy document. Consumers are advised to read this schedule carefully.

1. Question: Local language translations of policy documents are not available presently.

A: Yes. Most policy documents are in English presently. Translated versions in local languages need to be made available to help consumers understand the complex terms and conditions better.

1. Question on whether payments due to administrative errors done by hospitals are claimable:

A: No. Administrative errors and payments made for such reasons are not typically covered in the insurance policy.

Video link available here: https://www.youtube.com/watch?v=RFJLdiMoYu8