You land up in a hospital on a medical emergency. The treatment costs a bomb. Your only solace is your medical insurance policy, which you have kept alive for 10 years - that too, without even making a claim - by paying annual premiums without fail. You file a claim to get the reimbursement of the hospitalization expenses. However, to your horror, the insurance company rejects the claim, citing technical reason.
Such scenario is not unheard of in the health insurance sector. Consumer activist Jehangir Gai narrates such an incident where a policyholder's hospitalization claim was rejected because the insurer was intimated after the stipulated deadline. The fact that the policyholder was not in a position to intimate within the timeframe as he was hospitalized on an emergency and remained indisposed for a while failed to convince the insurance firm.
Explains Gai: "Sometimes, a person is admitted to hospital in an emergency (such as in the case of sudden appendicitis or heart attack) and his priority then is not to trace the policy document and intimate the insurance company. If a person forgets to inform the insurance company within the prescribed period (maximum seven days), then the claim is rejected even if it is submitted in time, within 30 days of discharge."
Then, there are cases where the claim-settlement process is stalled on the grounds that the original documents like discharge card, pathological test reports, X-rays, etc, were not submitted. "The original bills have to be submitted but not the documents, as these are required for subsequent follow-up treatment. There is no condition in a policy that requires the original reports to be handed over; just the copies would suffice. Yet, claims are rejected for non-submission of the original reports," he says.
In fact, so commonplace are cases of policyholders being dissatisfied with the insurers' claim-approval record that the Insurance Regulatory and Development Authority (IRDA) has had to issue a circular to life as well as health insurance companies asking them to refrain from repudiating genuine claims on the grounds that they are time-barred.