Even though the claims process is the most critical aspect of your policy, yet, at the actual time of filing, it might be akin to navigating a complex maze.
Whether it’s term or health insurance, any difficulty in getting the claim means that it’s the policyholder who ends up bearing the brunt of the process, which eventually erodes the trust in the industry. It is, therefore, better to be informed and prepared with practical solutions for whatever the claims process holds for you.
Here we highlight some common problems faced by consumers and ways to address them.
Lack of understanding
Limited understanding of insurance policies is a common problem faced by policyholders. It might not always be clear what the complex jargon or insurance terms mean.
In fact, Policybazaar’s data suggests that close to 50 per cent claims in health insurance get rejected due to a lack of understanding of policies.
Policyholders should take the time to thoroughly review their insurance policy documents, paying close attention to key terms, coverage limits, and exclusions. To help consumers navigate this problem, the IRDAI in October issued the Customer Information Sheet which breaks down and simplifies complex insurance terms for policyholders.
The sheet includes coverage details, waiting period and other exclusions. It’s of utmost importance that policyholders seek clarification from their insurance provider. Additionally, utilising online resources or consulting a trusted insurance advisor can help policyholders gain a better understanding of their coverage.
Gathering documents
The claims process typically requires policyholders to submit various documents to support their claims, ranging from medical records and receipts, to police reports and witness statements. The process might also vary from one insurer to another.
The first step should be to approach the insurer for grievance redressal. If you are unable to arrange a particular document, discuss with them a possible alternative for it.
Make sure you submit the originals of documents pertaining to identity and address proof. To avoid any misunderstanding, understand from your insurer provider in advance about the documents needed at the time of claim. It’s best to create a digital folder to store all the relevant documents and make sure it’s easily accessible.
In the case of health and term policies, ensure that your nominee/family members are well aware of this folder since they’ll be the ones who’ll be required to take care of the documentation.
Delays and rejections
Policyholders often encounter delays or even rejection during the claims process, ranging from lengthy processing times to requests for additional information and red tape.
The regulatory body is increasingly making consumer-centric policies to simplify the insurance process for policyholders.
The guidelines advise you to first register a complaint with the insurer who, as per regulatory mandates, is required to resolve your concern within two weeks.
In fact, if the resolution is unsatisfactory, you can also approach the IRDAI regarding the same. If your claim ends up being rejected and your concern remains unresolved, you can also intimate your concern to the insurance ombudsman within one year of the claim rejection.
However, to prevent the situation from getting to this stage, it’s better to maintain a proactive line of communication with the insurer.
Lack of transparency
Insurance is a product that works on utmost good faith and so, trust and transparency are non-negotiable elements of this product. This just doesn’t apply to insurance companies, but also to policyholders. For instance, data also suggests that 25 per cent of rejected claims are due to non-disclosure of pre-existing diseases such as Diabetes or Hypertension by policyholders.
It’s important that both insurer and policyholder are transparent in their dealing and disclose all the necessary information to avoid rejection of a claim. While insurance companies should clearly lay out the terms and conditions applied to the policyholder, the latter should reciprocate the same by disclosing crucial information like pre-existing conditions, smoking habits or other lifestyle choices that may have a direct impact on your claim.
Often, unjustified hospitalisation also leads to claim rejection, which happens where policyholders can’t show a strong link between the hospitalisation and the medical necessity.
In a nutshell, it is important to understand the policy terms clearly, organise documentation, and maintain open communication with the insurer.
(The writer is Chief Business Officer – Health Insurance, Policybazaar.com)