My wife is about to undergo a surgery after a month. My employer insurance can take care of expenses up to ₹2 lakh. I also have a family floater policy of ₹5 lakh coverage. I am worried about the claims settlement process. What do I do when two insurers are involved and both require medical documents?
—Name withheld on request
Many medical claims use two insurance policies. The practice is to use one insurance for cashless settlement and then charge the outstanding expenses as a reimbursement claim in the other policy.
Selection of which insurance to use first should be such that it minimises the amount you have to pay out-of-pocket and, to the extent possible, use the company insurance rather than your own. If your medical expenses are likely to be closer to ₹2 lakh then use your employer insurance first and the small unpaid amount can be claimed as a reimbursement in your personal plan. If the total expenses are closer to ₹7 lakh then use your personal insurance first and claim the smaller unpaid amount in the company plan.
When you file for reimbursement of the excess amount, the first insurer or hospital will give you a settlement letter stating how much of the expense has been paid by the insurer. You will need this to file a reimbursement claim for the balance payment. The hospital will also give you a set of original bills that you can use for your reimbursement application. The hospital can also give you two sets of originals if you explain the purpose to them.
A fully cashless settlement is possible if you are willing to wait in the hospital. First get the cashless approval from one insurer and then apply for cashless to the second insurer with the settlement letter of the first insurer! This does take time and many just opt to go home and claim reimbursement later.
I am 34 years old and have a term insurance plan of ₹50 lakh. I want to increase my coverage as I am about to have a baby. Is it possible to revise the coverage upwards within the same policy or do I need to apply for a new term plan?
—Name withheld on request
In most term plans, it is not possible to increase the cover mid-term. You can buy a new term cover to enhance your insurance. Your first step must be to determine the additional sum assured that you want. I would say that there should be enough money to educate the child through school and college in the unfortunate event of your demise. Let us assume that this additional amount is ₹50 lakh, you can then buy a new insurance for the additional ₹50 lakh. Or you could simply buy a new insurance for ₹1 crore and let your current plan lapse.
The decision between these two is a financial one, select the lower-cost option. You should not worry about insurer selection because all life insurers have good death claims payment track record on term plans. The main reason is that the only exclusion allowed is suicide in the first year.
Insurers will insist that you buy a new term plan after the baby is delivered so you may need to wait for that.
Do nominate your child into the insurance. If you have one policy then specify a proportion of the sum assured that should go to the child or if you have a separate term cover for the child then make it the stand-alone nominee.
Kapil Mehta is co-founder, SecureNow Insurance Broker
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Updated: 12 Oct 2023, 06:34 PM IST