The Devil Is In The Details

The good news is that the uptake of health insurance has increased in India. According to the Economic Survey 2022-23, households with “any usual member covered under a health insurance or financing scheme” has increased from 28.7 per cent in 2015-16 to 41 per cent in 2022-23, according to the findings of the National Family Health Survey. This can be largely attributed to the spread of government schemes, such as Ayushman Bharat, and the rise of awareness about the importance of health insurance after Covid.

The bad news is that there are still many people who do not understand what they are getting into. That’s primarily because insurance proposals are complicated documents and some of the clauses can have a large impact on how your claims experience plays out in the future. Though the regulator has now asked insurers to provide a customer information sheet (CIS) that includes all major policy clauses in an easy-to-understand language.

Health insurance can help you shoulder the financial burden that an illness or hospitalisation may entail, but it may not be your ticket to complete freedom from medical expenses. That’s because these products often come with certain limitations and restrictions.

I believe doing three things can help ensure that you do not struggle later. First, reading and understanding the information in the CIS is imperative, if you do not want to read the entire document. I emphasise on understanding because that is the only way to assess if the policy is suitable for you. If you do not understand a particular term or its ramifications, reach out to the agent or distributor you are dealing with, or research a bit on your own.

Second, even if the agent tries to convince you otherwise, do not hide facts regarding your medical history, existing ailments or habits, such as smoking and drinking. Hiding these can affect your claims later. Remember that insurers investigate each case thoroughly before releasing the claim amount. The worst that can happen if you come out clean is the addition of a few exclusions, or introduction of waiting periods for certain ailments, or topping of the premiums. But compared to these, a claim rejection when you need the money is worse.

Third, keeping your documents updated and handy at the time of making a claim can solve most of the problems, whether it is at the time of making a claim, or when you are forced to take legal recourse in case of a rejection. This problem can get largely sorted if you opt for a cashless policy and stick to a hospital in the insurer’s network, even though the regulator has now extended the net to all registered hospitals.

As for insurers, it is important to realise that it may take a long time to build trust, but a single negative experience will be enough to break it completely. Effective communication at the time of sale and claims, timely intervention in genuine cases, and a supportive and willing-to-listen customer interface are some of the aspects that can go a long way in reducing the number of complaints, which are still substantial.

If you look at the flurry of regulatory proposals aimed at reducing complaints about rejection of health insurance claims in the last six to eight months, it seems the Insurance Regulatory and Development Authority of India wants insurers to tighten their belts. But whether these will translate into positive practical experience will depend a lot on both the insurers and the policyholders. But how things pan out in the future is something that still remains to be seen.