Skip to main content

When health claims can get rejected

Your health insurance policy will not pay for the treatment of all ailments.


   If you have a health insurance policy, you might be aware that it covers certain diseases only after a waiting period of four claim-free years. But do you know that conditions related to genetic disorders are not covered at all? And that claims relating to certain self-inflicted ailments—such as cirrhosis (liver disease) due to excessive intake of alcohol, lung and throat cancer due to tobacco use, and HIV—can also be rejected by an insurance company. All this is explicitly stated in the policy terms and conditions but buyers seldom go through the fine print. Even the agent will not disclose these intricate features of the policy for fear of losing business. An agent will not usually tell the buyer about all the exclusions in the policy.

Congenital diseases

Conditions such as cataract, hernia and sinusitis, which take a few years to develop into a full-blown ailment, are usually covered after a waiting period of 1-2 years. But genetic disorders such as cystic fibrosis, Down's Syndrome, thalassemia and congenital anaemia don't ever get covered. Often a congenital disease is confused with pre-existing diseases, which are covered in most cases after the fourth policy year. If a person is hospitalised due to an illness and it is discovered that it is a congenital disease, the insurance company may deny the claim.


   There are instances when a person may never know that he suffers from a genetic defect. "If one has regularly undergone medical checkups but a pre-existing ailment never showed up in the tests, the courts have held that the cost of treatment of such an ailment has to be paid by the insurance company. Insurers too are lenient if they know that it was a genuine oversight. If the patient genuinely mistook an earlier heart attack to be only a chest pain due to indigestion, we will consider the claim.

Self-inflicted ailments

Another reason why a claim can get rejected is if the ailment has been self-inflicted. At the time of application, one has to declare whether he consumes alcohol or uses tobacco. If a person has stated that he is a teetotaller but ends up in hospital with cirrhosis, the claim may be denied. However, there is a fuzzy line of subjectivity here. Insurance companies deny claims for treatment of cirrhosis in such cases under the exclusion self-injury. But they pay for treatment of cancer even for smokers. The logic is that while in nearly 100% cases the cause of cirrhosis is alcoholism, no such empirical relationship exists between cancer and smoking.

Investigative diagnostics

Similarly, investigative diagnostics are not covered by insurance if there is no proof of treatment. There have been cases where doctors are unable to detect a problem and suggest a battery of tests. Later the tests reports revealed that nothing is wrong. The claims were rejected because the hospitalisation was primarily for diagnostic purposes. Even if the hospitalisation and the tests were prescribed by a qualified doctor, the claim will still be rejected. "The tests may have been conducted because a doctor prescribed them but there is nothing to justify payment. The insurer will pay only for curative treatment. Besides, policies reimburse costs incurred after hospitalisation for up to 90 days. Here too, there is the condition that the 90-day period must commence and end within the policy period.

Pregnancy

Though some standalone health insurance companies such as Apollo Munich do cover maternity costs after four years of continuing with the policy, most health policies do not cover these expenses. Even in the case of Apollo, there is a limit to the expenses under this head. Besides, insurers don't cover pregnancy related complications. But there are some exceptions again. Consider the case of a pregnant woman contracting jaundice. Had she not been carrying, jaundice may not have warranted a hospitalisation. But if it were not for the attack of jaundice, the woman might have normally sailed through her pregnancy without any hospitalisation. As such, if it is clinically established that it is jaundice that led to hospitalisation, cost of such hospitalisation will be paid despite the fact that hospitalisation may not have been warranted for treating jaundice had the patient not been pregnant.

Equipment costs

Medical equipment presents its own complications. The cost of prosthetic and other devices or equipment if implanted internally during a surgical procedure are covered. However, the cost of external aids such as ventilators will not be covered. The logic: Ventilation is merely a process helping ease breathing, not an active line of treatment in itself. However, if a patient is undergoing some active line of treatment and as part of it is also put under ventilation (immediately after a surgery), insurance cannot knock of the cost of ventilation from the admissible claim.

 

Popular posts from this blog

Tata Mutual Fund

Being a part of the Tata group, the fund has the backing of a very trusted brand name with strong retail connect. While the current CEO has done an excellent job in leveraging the Tata brand name to AMC's advantage, it is ironic that this was just not capitalised on at the start. Incorporated in 1995, Tata Mutual Fund remained an 'also-ran' fund house for around eight years. Till March 2003, it had a little over Rs 1,000 crore in assets and 19 AMCs were ahead of it. But soon after that the equation changed. It was the fastest growing fund house in 2004 and 2005. During these two years, it aggressively launched six equity funds, two debt funds and one MIP. The fund house as of now stands at No. 8 in terms of asset size. This fund house has a lot to offer by way of choice. And, it also has a number of well performing schemes. Tata Pure Equity, Tata Equity PE and Tata Infrastructure are all good funds. It also has quite a few good debt funds. The funds of Tata AMC are known to...

UTI Mutual Fund

Even though only a few of UTI’s funds are great performers, this public sector fund house has many advantages that its rivals do not. It has a huge base of retail equity investors and a vast distribution network. As a business, it looks stronger than ever, especially in the aftermath of credit crunch. UTI is, by a large margin, the most profitable fund company in the country. This is not surprising, since managing equity funds is more profitable than debt. Its conservative approach and stable parentage is likely to make it look more attractive to investors in times to come. UTI’s big problem is the dragging performance that many of its equity funds suffer from. In recent times, the management has made a concerted effort to improve performance. However, these moves have coincided with a disastrous phase in the stock markets and that has made it impossible to judge whether the overhaul will eventually be a success. UTI’s top performers are a few index funds, some hybrid funds and its inf...

Salary planning Article

1. The salary (basic + DA) should be low. The rest should come by way of such allowances on which the employer pays FBT and you don't pay any tax thereon. 2. Interest paid on housing loan is deductible u/s 24 up to Rs 1.5 lakh (Rs 150,000) on self-occupied property and without any limit on a commercial or rented house. 3. The repayment of housing loan from specified sources is also deductible irrespective of whether the house is self-occupied or given on rent within the overall ceiling of Rs 1 lakh of Sec. 80C. 4. Where the accommodation provided to the employee is taken on lease by the employer, the perk value is the actual amount of lease rental or 20 per cent of the salary, whichever is lower. Understandably, if the house belongs to a family member who is at a low or nil tax zone the family benefits. Yes, the maximum benefit accrues when the rent is over 20 per cent of the salary. 5. A chauffeur driven motor car provided by the employer has no perk value. True, the company would...

8 Investing Strategy

The stock market ‘meltdown’ witnessed since the start of 2005 (notwithstanding the recent marginal recovery) has once again brought to the forefront an inherent weakness existent in our markets. This is the fact that FIIs, indisputably and almost entirely, dominate the Indian stock market sentiments and consequently the market movements. In this article, we make an attempt to list down a few points that would aid an investor in mitigating the risks and curtailing the losses during times of volatility as large investors (read FIIs) enter and exit stocks. Read on Manage greed/fear: This is an important point, which every investor must keep in mind owing to its great influencing ability in equity investment decisions. This point simply means that in a bull run - control the greed factor, which could entice you, the investor, to compromise with your investment principles. By this we mean that while an investor could get lured into investing in penny and small-cap stocks owing to their eye-...

Debt Funds - Check The Expiry Date

This time we give you an insight into something that most debt fund investors would be unaware of, the Average Portfolio Maturity. As we all know, debt funds invest in bonds and securities. These instruments mature over a certain period of time, which is called maturity. The maturity is the length of time till the principal amount is returned to the security-holder or bond-holder. A debt fund invests in a number of such instruments and each of these instruments would be having different maturity times. Hence, the fund calculates a weighted average maturity, which would give a fair idea of the fund's maturity period. For example, if a fund owns three bonds of 2-year (Rs 30,000), 3-year (Rs 10,000) and 5-year (Rs 20,000) maturities, its weighted average maturity would be 3.17 years. What is the big deal about average maturity then, you may ask. Well, knowing a fund's average maturity is important because it tells you how sensitive a fund is to the change in interest rates. It is ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now