The whole reason you even go in for a health insurance policy is the timely availability of funds in case of a medical emergency. Imagine then, when an insurer fails to settle your claim in time. This completely defeats the purpose of working month after month to pay insurance premiums, doesn’t it?
And that’s not all; sometimes, these delays also end up in a long-winded back-and-forth that ends with the insurer refusing to pay the claim.
“What’s the point of claiming insurance when you’re not even guaranteed a timely payout?”, you may ask. Well, certain insurers have started offering ‘claim service guarantees.’ Let’s take a look at these, and what they can do for you.
The Claim Service Guarantee
This is, in essence, an effort on the insurer’s part to assure policyholders that they will pay out claims within the specified period.
How they do it: the companies offer to pay a penalty whenever they miss paying out a claim. Some do this by paying high interest rates if they fail to deliver 100% reimbursement on time. Others offer a fixed cash amount they’ll pay for each day the disbursement gets delayed.
Does this System Really Work?
Such lofty words are merely words. They’re simply meant to inspire confidence, and effectively don’t mean much.
The insurer, or a Third-Party Administrator (TPA) can further delay the pay out by suddenly asking for documents, irrespective of the ‘service guarantee.’ Moreover—and more importantly—the guarantee only ensures that the insurance provider provides a prompt reply to your claim, not an actual approval.
Even if the guarantee were followed to the letter, you could still end up with a timely reply politely stating that your claim was rejected.
In fact, consumer activist Jehangir Gai has this to say on the matter: “In my opinion, such clauses are for marketing the policy and not of any genuine help to the consumer; and hence these clauses would be irrelevant for the purpose of buying a policy…they do not ensure prompt settlement of claim”.
As is evident from this statement, the ‘claim service guarantee’ works like a great TV ad: you’re impressed by the great visuals and catchy tunes, but it has no bearing or effect on the actual product.
So, if we can’t depend on this feature to decide on a particular health insurance provider, how can we make that decision?
The Record of Health Insurers
Forget all the candy coated ‘guarantees.’ Instead, try and do your own research about the provider, checking how many claims they settle vs. how many claims they deal with. While many companies claim that they settle in a matter of hours, the truth might be far from this.
Ask around, and put your trust in word-of-mouth recommendations; ask the customers who’ve actually dealt with the insurer. Check the organisation’s claim settlement ratio, instead of their guarantees.
When you apply for an insurance policy, never get carried away by empty claims, instead choosing to go with the hard truth. Know your rights; for instance, the insurer (or) their representative Third-Party Administrator can only ask for documents once.
They cannot refuse your claims on documentation grounds either; the Insurance Regulatory and Development Authority of India (IRDAI) has ruled that insurers can only refuse claims on medical grounds.
Armed with this knowledge, you should be able to choose the insurance provider that truly assures pay-outs. Choose wisely.