Health insurance: Tips to ensure your health claim is not rejected

Most of the health insurance policies have a waiting or cooling period clause for certain pre-existing diseases or maternity. Further, the policies have an exhaustive list of exclusions that are not covered.

Rejection of insurance claims is common, especially in health insurance. Let us discuss the common reasons for which insurance companies reject claims, how to avoid the same and remedies available to the policyholder in case of rejection of health insurance claims.

False information
The most common ground for rejection is providing incorrect or false information in the application form. It is essential to provide correct information, especially data such as age, income, occupation and most importantly, lifestyle habits such as smoking, drinking, besides information on other policies and claims. Providing incorrect information is deemed as fraud because the premium amount is determined according to the information provided in the application.

Non-disclosure of pre-existing disease
It is very important to disclose any of the pre-existing diseases such as cardiovascular ailment, blood pressure, surgeries undergone, any other hereditary conditions, etc., since some of the pre-existing diseases are not covered and coverage / claim could probably be denied in times of hospitalisation due to the pre-existing ailments.

Waiting / cooling period
Most of the health insurance policies have a waiting or cooling period clause for certain pre-existing diseases or maternity. Further, the policies have an exhaustive list of exclusions that are not covered. So, any claim made from the exclusion list will not be considered by the insurance companies.

Exceeding time limit for claim
It is important for the insured to apply / intimate for reimbursement within a certain period of time.
As for emergency admission, the time given is 24 hours after the patient has been admitted, and in other cases, it can change according to the type of policy one opted for and the treatment being availed by the insured. If the policyholder did not apply /intimate within the time specified, then the claim can be rejected.

How to avoid rejections?
One should understand that insurance is basically a contract drawn upon good faith, so it is important for the policy holders to provide complete, correct, accurate and most recent information related to both medical and non-medical (financial information) at the time of applying for an insurance policy to avoid claim rejections later. It is always advisable to fill up your accurate claim forms through your insurance company’s Third-Party Administrators (TPA).

Appeal mechanism
There are elaborate and established procedures within insurance companies before rejecting or repudiating claims. As a first step, when the clam is rejected, the insured should approach the service quality team of the insurance company for escalation. It is very important to understand the reasons for rejection. Policyholders can ask the insurance company in writing to review their decision to deny the claim. The Insurance Regulatory Development Authority of India (IRDAI) has set a time limit of 15 days for insurance companies to resolve the issue.
If the insurance company fails to address the issue within the above time window or the insured is not happy with the resolution, then the policyholder can file a complaint through Irdai’s integrated grievance management system.
If the insurance company refuses to settle the claim after the regulator’s intervention, then the policy holder can approach the insurance ombudsman for grievance redressal.

To conclude, one can easily avoid claim rejection by avoiding the common mistakes as discussed above.

The writer is a professor of finance & accounting, IIM Tiruchirappalli

Reasons to reject
Incorrect information is deemed as fraud because the premium amount is determined according to the information provided in the application
Claim or coverage can be denied in times of hospitalisation due to pre-existing ailments or claims made within waiting period
If the policyholder does not apply /intimate within the time specified, then the claim can be rejected