Dual Health Insurance Coverage: Understanding Claim Settlements and Policy Interactions

Health Insurance Policies: Understanding Contribution and Claims

Multiple Health Insurance Policies: A Common Scenario

Many individuals and families hold multiple health insurance policies, which can be a result of various situations such as:

• Employers providing corporate health insurance plans
• Purchasing separate top-up or super top-up plans to increase coverage
• Having individual policies and being covered under a spouse's family floater plan

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Holding multiple policies is perfectly legal, and insurers only require that all existing policies are disclosed when buying a new one.

Claims Settlement Process

When a hospital bill arises, insurance works on the principle of indemnity, reimbursing the actual cost of treatment and not allowing profit from a claim. If the entire hospital bill falls within the sum insured of one policy, the claim can be filed with that insurer, and the second policy will not come into the picture.

However, if the bill is larger than the sum insured of the first policy, the second policy can be used to cover the remaining amount. For example, a hospital bill of Rs 6 lakh can be settled as follows:

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• If the first policy has a sum insured of Rs 4 lakh, the insurer will settle up to Rs 4 lakh, and the remaining Rs 2 lakh can be claimed from the second insurer.
• In cashless hospitalisation, policyholders usually choose one insurer to handle the main claim, and any remaining amount can later be claimed from the second insurer through reimbursement.

Contribution Clause

When two policies exist, insurers may apply the contribution clause, where each insurer shares the claim proportionately based on the sum insured under their policies. For example, if one policy covers Rs 5 lakh and another covers Rs 10 lakh, the total coverage is Rs 15 lakh, and the insurers may share the payout in a 1:2 ratio.

Key Takeaways

• You can claim the same hospital bill from two insurers, but only up to the actual cost of treatment.
• There is no strict rule on which policy to use first, but many people use their employer-provided policy first to preserve the no-claim bonus and benefits in their personal policy.
• Disclosing existing health insurance policies is important when buying a new policy to avoid complications during claims.