<div><em>An important disclosure goes missing from health insurance brochure thereby impacting claim settlement and customer experience. <strong>Sunil Dhawan</strong> explains</em></div><div> </div><div>Almost all health insurance policies have sub-limits inbuilt into the plan. No matter how much coverage (sum insured) one has, the claim happens as per the sub-limits. The doctors’ fees, surgery, operations, nursing expense, medicine cost including room rent, all can have a specific cap called the sub-limit. </div><div> </div><div>Sub-limits for each admissible hospital expense is defined as a percentage of the sum insured. For example, room rent could be capped at 1 per cent of sum insured and hence for a policy of Rs 1 lakh, room rent will be restricted to Rs 1,000. </div><div> </div><div>The most important of all these is the room-rent and yet highly ignored and played-down by insurers at large. One big setback many of the health insurance policyholders get on receiving the claim amount is when they receive only a partial claim amount. The reason could lie in the ‘room rent’ adjustment leading to partial claims. Not only this, one might have to pay from out-of-pocket because of the ‘room-rent’ clause. Let’s see how. </div><div> </div><div><strong>Proportionate affect:</strong> The problem arises if the hospital doesn’t have a room available at that price or when the policyholder wishes to occupy a room with higher rent. On taking the room of a higher value, there could be a negative impact on one’s claim amount. The claim amount of all hospital expenses such as medicine, doctors’ fees, operation charges etc. may get reduced proportionately. Bhaskar Jyoti Sarma, Managing Director & Chief Executive Officer, SBI General Insurance says, “If an insured individual decides to opt for a room rent higher than the permissible limit under the policy, then a proportionate reduction is applicable to all other associated medical expenses and it has to be borne by the insured person.” If the room rent is 50 per cent more than the allowed limit, the claim gets reduced by equal per cent age. The claim amount is directly linked to the room rent and hence plays an important past in overall settlement of the claim. </div><div> </div><div><strong>Hidden in policy document:</strong> Almost all health plans will have sub-limits in them. However, the impact of room rent on other expenses if the limit is breached is something not very explicitly mentioned and disclosed on the brochure of products. Sarma informs,” This clause is stated in the policy document.” However, if the policy document is silent on this proportionate reduction, and there the claim is being adjusted, one stands a chance to claim it full. Reading the policy document helps. </div><div> </div><div><strong>What to do:</strong> While choosing health plan, go through brochure else confirm from insurer if proportionate reduction happens. Some new health plans are available in which on paying an additional premium, sub-limits itself may be removed. As far as coverage is concerned, go for higher sum insured and ensure you stick to your room-rent limit<br> </div><div><strong>End note</strong>: If room rent plays such an important part in claim settlement, it requires a more prominent upfront disclosure for better customer experience. Insurance policies are highly technical at times and nomenclature may not be fully understood by all at all times. Important information should come upfront at least in the brochure. As has been the practice in mutual funds though a Key Information Document, health plans too need such document showing information other than the features of the plan, to help people take informed decision. With health plans getting more varied, it’s important that the regulator and insurance companies relook at them to make it more customer-centric and friendly.</div><div> </div><div> </div><div> </div><div> </div><div> </div><div> </div><div> </div><div> </div><div> </div>
