Understanding a policy document

Health insurance policy documents can be daunting to read but should not be ignored either. Especially when the product can potentially fend off financial stress during health emergencies. One should have a fair idea of risks that are covered (the policy inclusions) and not covered (policy exclusions), apart from the process.

Also, the lack of awareness at one end, and product innovation at the other, makes it imperative to read the document thoroughly before signing on to the product. Here, we highlight typical points covered in a health insurance policy document that can guide a policyholder in reviewing their own contracts.

Inclusions

The core of the policy document is obviously the benefits, which begin with in-patient hospitalisation. A typical policy document would need doctor-prescribed admission for 24 hours or more, and the ailment to be contracted in the policy period, to kick-start the coverage. Injuries and accidents are also covered and so are day-care procedures and a list of approved procedures, in the policy document. Admission in line with policy document is crucial to all other benefits linked to the policy.

Medical costs, including doctors, room rent, ICU charges, nursing, consultations tied to illness, are covered including the organ donor (but limited to the hospital stay of the donor). Non-medical consumables are typically not covered, which should be ascertained, or an additional cover bought for the same as these can cost between 5 and 10 per cent of total bill.

Ayush (or non-allopathic treatments) are covered but from a government institute or State-recognised institute with qualifiers (number of beds, practitioners and records), which has to be ascertained in the policy document.

Policies will also have other useful features covered in the base policy itself. Policies are now covering single private AC rooms but this has to be confirmed in the document. A room upgrade beyond the policy mandate should be on account of documented unavailability and that should be conveyed to the insurer. Otherwise, this can lead to burdening a higher portion of the overall bill by the policyholder. All other benefits that are part of the base should be confirmed in the document.

No claim bonus and the steps involved in increase or decrease of bonus, restoration benefit for related/unrelated illness, yearly preventive medical tests and the authorised labs to conduct them should be understood. Road ambulances and air ambulances are covered but the conditions merit a closer look. For instance, air ambulance is triggered when one is 150 km away from residence on a trip shorter than 90 days. Road ambulance may not cover the ride home from hospital.

Wellness benefits are easy to pitch as a sweetener but the specific conditions to get 10-30 per cent discount on premium must be well understood. Active days (qualified by step count, fitness centre attendance and others) for a certain number of days per month must be completed to qualify for wellness-based discounts in most policies.

Exclusions

The first 30 days do not cover any ailment except for injuries and accidents. Pre-existing diseases, clearly conveyed at the time of application by the policyholder, are covered only after a period, typically 48 months. Apart from these, certain named ailments are covered only after 24 months, including cataract, knee replacement, gynaecology conditions or others. Then there will be permanent exclusions, including effects of war and other wilful impairments of health, congenital birth defects, artificial life maintenance.

Treatment at home is covered, on doctor recommendation, but not for care and recuperation. Cosmetic surgeries, including bariatric surgeries, are not covered, but some policy documents mention coverage only on doctor recommendation. Experimental treatments are also not covered, but policies typically mention a list of advanced treatment options that they cover.

Some policy documents of the insurers will also mention a list of institutes not covered by the insurer and the same should be avoided by the policyholders as well.

Process

After undergoing the prescribed medical tests and declaring all information and documentation, policy is issued to the policyholder. The policyholder should ascertain all details in line with pre-purchase expectations or can return the policy within 15 days — called the free look period. But the countdown begins from receipt of the policy documents.

Timely payments are essential to enjoy all the benefits and the payment date along with the grace period (generally 30 days) should be ascertained from the policy document.

Similarly, claims are processed in 30 days’ time from the receipt of the last relevant document in case of cash reimbursement. It is, therefore, useful to collect all relevant paperwork from the hospital upon discharge, including medical, pharmaceutical, diagnostic, and administrative bills, and submit them at one go to the insurer to avoid delay in reimbursement.

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