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News & Views

Wednesday, Nov 20, 2013

Which to use first for making a claim – group or personal health cover?

[Source : The Economic Times]

Hit hard by soaring healthcare costs as well as concerned over the inadequacy of health coverage provided by a single policy, a growing number of people now-a-days are opting for multiple health insurance. After all, what if a single policy is not enough to cover the costs of a medical treatment and one has to fork out the extra amount from one's own pocket? So why to take risk when one can get extra health cover just by shelling out some additional money?

This usually happens particularly in case when one is having a policy provided by one's employer and the coverage is not adequate for the entire family. Or one is having an old policy and may need additional coverage. One may also like to have separate policies for one's parents as well as for one's spouse and kids. There may be, thus, many reasons for which one would like to go for multiple health covers.

But just having multiple health policies is not enough. You also need to know how to use them efficiently as well as the procedure of making a claim, so that you don't have to face the situation of reduced claim settlement.

In the previous article on multiple health covers, we have already discussed how to make a claim on multiple health policies. Here we will discuss which insurance to use first for making a claim - your group health insurance cover provided by your employer or the health policy you have bought as per your requirements. Although this looks like a simple procedure, but you need to tread cautiously as there are some issues involved, owing to which even experts are not unanimous in their views which policy to use first for making a claim. Some experts, for instance, are of the opinion that you should always claim insurance from your group insurance first simply because the claim settlement would be faster. Also, you would save on your no-claim bonus or premium loading during your next renewal of personal health insurance policy.

"If a customer is holding more than one health policy, he has the choice to prefer the claim with any of the insurers. For example, if he holds an individual health policy with Insurer X and a group health policy with Insurer Y, he may choose make his claim with any insurer. However, it is advisable to make his claim with Insurer Y since the terms of a group health policy are generally wider than an individual health policy," says Ajay Bimbhet, managing director, Royal Sundaram Alliance Insurance Company Ltd.

Some experts, however, think otherwise. Harsh Roongta, CEO,, for instance, has a different view. According to him, the consumer has a choice to decide which health insurance policy to use for making a claim when he has a choice from among several policies that he might have (this could be policies he has bought himself from multiple companies or those that his employer has bought for him or some other group policy that he might have).

"However, the consumer would be well advised to reserve some policies exclusively to cover people such as his parents. For example, if the employer group policy covers the consumer, spouse, children and parents, he can reserve this policy for his parents since the chances of getting an independent policy for them might be more difficult (or much more expensive)," says Roongta.

Typically the employer provides a group cover which may cover parents as well, including pre-existing diseases for the parents. Typically elder citizens with pre-existing diseases will find it difficult to get a cover at an economical cost independently and even if available may not cover pre-existing diseases which are typically covered in a group policy. "This makes the chances of claim settlement virtually painless. Hence if available such policies should be reserved for parents or another dependent who may have difficulty getting an independent policy," says Roongta.

In such cases, it is better to use one's personal policy first for making a claim, while one may keep the employer group policy for use in future. The consumer should also choose a policy that has no/lower loading for claim (or no/lower increase in the next year's premium due to claim made in the current year) for making his claim.

Thus, you should choose a policy for making a claim depending upon your present needs and also keeping in view the future requirements, so that you don't have to repent at leisure just for acting in haste.

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