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News & Views

Friday, Jul 7, 2017

How to make a claim on multiple health insurance policies

[Source : The Economic Times]

Not many people hold health insurance policies but some of those who buy it have bought it from more than one insurer. Some policyholders could simultaneously be covered under a group cover.

Holding a policy from more than one insurer would make sense if the coverage, benefits are somewhat different from one another.

"Multiple indemnity policies having identical coverage does not benefit the policyholder, ideally coverage in multiple policies should be mutually exclusive. When buying multiple benefit policies it is utmost important that the second insurer is made aware of the existence of the first policy as that forms a crucial part of underwriting," says Parag Gupta, Chief Underwriting Officer, Bharti AXA General Insurance.

The health insurance policies such as Mediclaim are indemnity covers i.e. only the hospital bills get reimbursed up to the sum insured of a policy. The other variant of health insurance policies are the defined-benefit policies i.e. the entire sum insured gets paid on the occurrence of the defined event (ailment) irrespective of the hospital bills.

Holding multiple policies: indemnity covers

If someone holds more than one health insurance policy, as a policyholder, the claim can be settled from any of the insurers. It is not mandatory that the policyholder has to approach all the insurers whose policy he or she holds. The claim can be settled from any insurer which the policyholder prefers to go with.

The total hospital bill need not be shared between the insurers as the claims settlement is not on the basis of 'contribution clause' which was done away with, a few years back. Under that, the claim had to be settled by all the insurers in the ratio of sum insured of the policies held by the policyholder.

Partly paid by insurer

In case an insurer doesn't make the entire payment and disallows a certain amount, a policyholder can still approach the other insurer. Last year, IRDAI had clarified that "the policyholder having multiple policies shall also have the right to prefer claims from other policies for the amounts disallowed under the earlier chosen policy, even if the sum insured is not exhausted."

Exhaustion of sum insured

If the hospital bill exceeds the sum insured in a policy, one may apply for claiming the balance from the other insurer. "If the amount to be claimed exceeds the sum insured under a single policy after considering the deductibles or co-pay, the policyholder shall have the right to choose insurers from whom he/she wants to claim the balance amount," says M Ravichandran, President, Tata AIG General Insurance.

Which policy to choose

As a policyholder, if you are holding more than one policy, one can ask any one insurer to honour the claim. But, how should one decide as because a claim will have an impact on the no-claim bonus (NCB) and the waiting periods in an existing policy? "Cumulative Bonus is reduced in the same proportion that it increases every year but there is no impact on the waiting period," says Gupta.

For someone who is also insured under a group health insurance plan, the choice is much easier. "If a customer has one retail policy and a group policy, it is better to claim first under the group policy as there are no accrued benefits like NCB, no claim health checkup, etc in it. Also, group policies would generally have wider coverage than a retail policy, especially related to waiting periods," says Ravichandran.

How to claim

For claims, insurers insist on original hospital bills and discharge summary. If a policyholder has to make claims from more than one insurer, there could be concerns regarding documentation. Gupta informs, "For claiming from the second insurer customer can submit true copies (self-attested) of documents along with the original settlement letter from the first insurer."

Holding multiple policies: fixed-benefit covers

Critical illness plans are typical fixed-benefit insurance policies. They come as a rider (with a life insurance policy) or a standalone policy. As per the IRDAI rules, all the claims on multiple fixed-benefit insurance policies have to be honoured by each insurer. "Section 24 of the Health Insurance Regulations 2016 states that in the case of multiple policies which provide fixed benefits, on the occurrence of the insured event in accordance with the terms and conditions of the policies, each insurer shall make the claim payments independent of payments received under other similar policies," says Ravichandran.


As a policyholder, holding more than one policy, disclosure and transparency are important. Make sure you disclose not only material health conditions, pre-existing ailments but also let the insurer know about the existing policies if any.

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