Health insurance serves as a safety net, protecting you from financial burdens during unexpected medical emergencies and preserving your long-term savings. However, when a health insurance claim is rejected, it can lead to serious financial strain. Here are five common reasons why claims are often denied, along with tips to help you avoid these pitfalls:
1. Pre-Existing illnesses
Pre-existing conditions are not covered from the start of your policy. Regulatory bodies set a maximum waiting period of two years for these conditions, meaning your insurer must cover pre-existing illnesses after this period. Some policies offer shorter waiting times, but the key is full disclosure of any pre-existing health issues when purchasing your policy. Failing to do so could result in complications later. Transparency from the outset helps avoid claim rejections linked to undisclosed conditions. But you should also know that there is a moratorium period of five years in health insurance policies after which an insurer cannot reject your claim unless it is on the grounds of fraud.
2. Exclusions in the health plan
Understanding what your policy doesn’t cover is just as important as knowing what it does. Policies often include exclusions like waiting periods for specific conditions or certain family members being ineligible for coverage under a floater plan. For instance, critical illness policies may require the insured to survive for at least 30 days after diagnosis and generally do not cover pre-existing conditions for the first 60-90 days. Carefully reviewing these exclusions is vital to avoid surprises when filing a claim.
3. Gap in renewal
Timely renewal is essential. Failing to renew your policy before the due date can result in claim rejections for treatments during the lapse period. A delayed renewal also causes you to lose your accumulated no-claim bonus, which can build up to as much as 50% over time. Additionally, any gap in renewal may reset waiting periods for certain coverages, adding further delays. To maintain uninterrupted coverage and avoid any negative consequences, make sure your policy is always renewed on time.
4. Complicated policy wordings
Health insurance contracts can be complex and filled with jargon, making them difficult to understand. It’s essential to sit down with your insurance agent or thoroughly read the terms yourself to grasp all details, such as sub-limits on room rent or consultancy fees. Many policies also stipulate that hospitalization must last at least 24 hours to be eligible for claims. Clarifying these terms in advance ensures you avoid misunderstandings that could lead to a denied claim.
5. Incorrect information
Providing inaccurate information when purchasing the policy or filing a claim is one of the most common reasons for rejection. This includes everything from incorrect patient details to missing or wrong documents like the hospital discharge card or medical bills. Double-check that all the information you provide is correct and that you submit all the necessary paperwork. This simple step can save you from a rejected claim and the resulting financial stress.
Most importantly if you are planning to port your policy do mention any illness contracted after buying the policy, as any non-disclosure at the time of porting can lead to claim rejection and treated as a pre-existing illness.
By avoiding these common pitfalls, you can ensure your health insurance works as intended, offering you protection and peace of mind during medical emergencies. Proper policy understanding and timely renewals, combined with accurate information, are crucial steps in making sure your claims process goes smoothly.