Health Insurance Customers - Know Your Rights

Are you one of those Indian Citizens who thinks that fighting with Insurance Co's is a Lost Cause? Are you one of those people who think that Insurance Customers are forced to accept the decisions taken by Insurance Co's? If so, this article is for you. In this article we are going to cover the basic rights that you and I have as Health Insurance Customers.

Right No.1 - The Premium Amount has to be Justified

Yes, the Insurance Company fixes the Premium for all Insurance Policies sold by them. But, this does not mean that they can just quote any number they want.

First of all, they have to submit their Premium Amount calculation details with IRDA when they register the Policy. If you jumped the gun and said "How will I know whether I am being Over-charged?", don't worry my friend. I am just getting to the Good Part.

There is something called a "Premium Chart" which every Insurance Company has to put up on their website. This will contain details on how the Premium Amounts will vary based on the policy holders age, claims history etc. Practically, premiums go up during renewal of Health Insurance policies if, the policy holders age goes up or if claims were made in the previous year. By knowing these details you can check the website and confirm if the premium you are paying is appropriate for the policy you are purchasing.

Tip: If you are still not sure of whether you are being over-charged, compare similar products offering similar insurance benefits from other Insurance Company's. The difference in premium must not be more than a few hundred rupees. For ex: If LIC Offers me Health Insurance worth 10 lakhs for Rs. 15,000/- per year and if ICICI Prudential asks me Rs. 30,000/- for the same policy, then either of the following is true:
1. ICICI Prudential is probably offering me much higher benefits than the policy offered by LIC
OR
2. ICICI Prudential is over-charging me

Note: The above is just an example. I am right now working abroad and have practically 0 idea about the current prevailing Health Insurance policy premium rates in India.

Right No. 2 - Policy Renewal cannot be Refused without a Valid Reason

There are numerous cases where Insurance Co's reject policy renewals citing arbitrary reasons. For ex: they cannot refuse to renew your policy because you had claims last year. The following are the legitimate reasons for which policy renewals can be refused:

1. If the Policy Holder has crossed the age limit for the policy - maybe 65 or 70. This age has to be clearly and explicitly mentioned in the policy document
2. If the Policy Holder misrepresented facts or provided false details
3. If the Policy Holder did not pay his premium on time and the policy lapsed

In Short, if you are within the Age Limit for the policy, and have submitted all documents truthfully and have paid your premiums on time, the Insurance Company cannot refuse to RENEW your policy.

Right No. 3 - All Claims/Requests Must be Processed Within Deadlines

As per the guideliness set up by IRDA, all Re-inbursement Claim Requests must be processed/paid within 14 to 30 days of submission of all necessary documentation. Usually we will be asked to submit all original bills and receipts, letters from the hospital and doctors along with proof of holding the Insurance Policy to the Insurance Company within the timeline stipulated by the Insurance Co. In the policy it will be mentioned that all claims must be submitted within 'N' days from treatment completion (Usually 'N' will be 7 or 14 days). If the Customer follows the procedure and submits all necessary documents on time, the Insurance Co is supposed to settle the claim within 30 days.

Tip: If the Insurance Co does not settle the claim within 30 days, the policy holder has the right to claim interest on the payout if they have submitted all necessary artifacts on time

In case of Cashless Hospitalization, the amount is settled during the Treatment period itself, so this above Right is not applicable here.

Right No. 4 - Free Look Period

Every Insurance Policy has something called "Free Look" Period during which the policy holder can cancel & return the policy if they are not satisfied. In such cases the Insurance Co has to ensure that the Premium Amount paid by the customer is refunded after deducting any fees/charges as applicable. A point to note here is that, details of the no. of days in the Free Look period as well as the fees payable in case of policy termination during the Free Look period have to be clearly mentioned in the policy document.

In some cases, the Insurance Co may actually delay the approval of your policy until the free look period is over and so by the time your policy is approved, you cannot cancel or return it. This again is wrong.

If the Insurance Co does not refund your amount or does not approve your policy application during the "Free Look" period you can raise a Grievance with IRDA as explained in the previous article.

Some Good News to Wrap Up the Article

Of late, there have been numerous cases in the Health Insurance Space, file by customers against hte Insurance Co's. The Good news is that, there have been Several Judgements where the ruling was in favor of the Insured Individuals and directed the Insurance Co to pay the compensation immediately along with interest and fines.

The IRDA too has been very strict on Insurance Co's that delay claim settlement. Recently, they even pulled up the Government Owned New India Assurance Co for Overcharging of Premiums as well as Delay in Claim Settlements.

At the end of the day, we are not exactly where we must be ideally, but things are changing and changing for good. So, lets hope for the best in the coming years.