PREMIUM CONCERN

How to ensure your claim is honoured if a medical emergency occurs closer to the policy renewal date

Medical emergencies tend to catch us unawares. If hospitalisation occurs closer to a health insurance policy’s renewal date, and you have neglected to pay the premium, you risk the dishonouring of your claim, resulting in a heavy financial burden.

Of course, IRDA or the Insurance Regulatory and Development Authority allows a 30-day grace period within which insurance premium paid should be accepted and the policy benefits reinstated. However, it is essential to understand three situations that could arise if a family member is hospitalised close to a policy anniversary to avoid claim rejections.

PRE-RENEWAL CLAIM

When a claim is made within the policy period before the expiry of cover, irrespective of whether the renewal premium has been paid or not, provided it falls within the purview of the policy, based on the clauses specified.

CLAIM BEYOND RENEWAL DATE

When hospitalisation in one policy year spills over to the next, the date of admission is critical, says Yashendra Sharma, senior vice-president, Alliance Insurance Brokers. “If a policyholder is hospitalised before the expiry of a policy year and the lapse time, the insurer might still consider the claim in entirety if the next premium is paid post-

hospitalisation,” he says.

If hospitalisation occurs within the policy term, then the claim is honoured even if the hospitalisation extends to the policy renewal period. “All one needs to do is to intimate the claim to the insurance company immediately,” says Anurag Rastogi, member of executive management, HDFC ERGO General Insurance.

HOSPITALISATION IN GRACE PERIOD

What if one has not paid premium on time for renewing the policy and the medical emergency occurs within the grace period? “If the hospitalisation occurs even two hours after the policy has lapsed due to non-payment of renewal premium, the insurer will not entertain the claim even if you have been a policyholder for several years together,” says Sharma. This is because a policy is a contract, which expires on a set date or time, Sharma clarifies.

Illustrating by example, Ashish Mehrotra, CEO, Max Bupa Health Insurance, says, “If your cover expired on September 30 and you pay the premium on October 14, then the claim arising on October 12 won’t be covered. But any clagim arising after October 14 will be paid if premium’s been paid to reinstate the policy benefits within the grace period.”

LAPSE IMPLICATION

“In India,” says Sharma, “the cover starts only after the money is paid. So, even if you pay your premium three days after the cover ends, the policy lapses and there’s a gap in the policy. In such a situation, the policyholder loses the continuity benefit, and the waiting period clauses for pre-specified and select surgeries apply all over again,” says Sharma.

Rastogi issues another warning. “If the customer contracts any disease during the grace period, it’s treated as a pre-existing disease when the policy’s renewed.”