I was recently hospitalised and only then the realization hit me as to how clueless I am about the nitty gritty of medical insurance. Frankly, that is not the best of times to make oneself aware.
Is it necessary to have a personal medical insurance cover when you have a corporate cover?
Salaried employees often are provided with Mediclaim under Group Health Insurance by the employer. The most obvious benefits are cashless hospitalization and faster claims processing. Another significant benefit is “no terms and conditions”. What this means is that the policy provides you with a cover from the day you join the company and there is no waiting period, as is the case with a personal Mediclaim policy.
If you are entitled to such a policy, do you really need one of your own? Most financial planners and insurance advisers, including myself, will answer with a resounding “yes”. Even if you have a health insurance cover provided by your employer, it always makes sense to have your own personal health insurance policy.
Why?
There could be a chance, however slim, that you may get laid off. Or, you may decide to resign and start off on your own. What if you switch jobs and your new employer does not offer a cover? Even if your new employer provides health insurance, a medical emergency during the time you are between jobs could leave you with a hefty bill.
Let's take the example of an individual who has been hospitalized and has run up expenses of Rs 10 lakh. The health insurance cover provided by the employer is just Rs 5 lakh. In such a situation, his additional cover will be of great help.
Can you combine your personal medical cover with the group insurance cover?
Let’s say you find yourself in the above situation where you have two health insurance policies of Rs 5 lakh each; one from your employer and one your own.
Use your employer policy to claim the first Rs 5 lakh of your expenses (assuming you have the cashless option). Exhaust your limit of Rs 5 lakh from your policy. The balance Rs 5 lakh will then come from your personal health insurance policy.
Now, for a single hospitalization the hospital will not give you a cashless claim with two separate health insurance companies. You will have to pay the balance Rs 5 lakh and then claim it by way of reimbursement from your own personal health insurance policy.
You will be required to fill in a form and submit a complete set of documents attested by the previous health insurance company which has passed the first payment, to your own health insurance company.
Can you combine two separate personal covers?
Let's take another case where a self-employed individual has no group insurance cover, but two health insurance policies from two health insurance companies. One cover is for Rs 10 lakh, and the other is for Rs 3 lakh. What happens in this case?
She should use the policy with the higher insurance cover first. So she should first take up the policy of Rs 10 lakh cover. The reason being that many policies have the room rent limited to 1% of the sum insured. So, if she claims from a Rs 3 lakh rupee insurance policy, the room rent will be capped at Rs 3,000/day. But with the Rs 10 lakh policy, it will go up to Rs 10,000/day. That increases the chances of her getting the claim.
Now, let’s take this further. Let’s say the total expenses amounted to Rs 12 lakh. The first health insurer settled Rs 10 lakh cashless. The balance Rs 2 lakh will need to be claimed from the other policy.
She will need a full set of papers attested by the first health insurance company along with a settlement letter stating that out of the total of Rs 12 lakh, Rs 10 lakh has been approved and settled. The balance Rs 2 lakh will be provided by the other health insurance company.
What happens if the insurance providers are not tied up with the hospital she got admitted into?
Then she cannot avail of the cashless claim. She will have to pick up the tab and then work towards a reimbursement.
Once discharged from hospital, she must put up a claim with both the insurance companies. Claim from the Rs 10 lakh policy first while keeping the other insurance company in the loop by informing them that she got hospitalized and will be making a claim.
Once the Rs 10 lakh claim is settled, attested documents from the first health insurance company will be needed to be given to the second health insurance company for claiming the balance Rs 2 lakh.
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