Claiming medical expenses from two policies

I have a ten lakh base policy and a 15 lakh super top-up (10 lakhs deductible) family floater policy from oriental insurance from 2008 covering me, my wife, and my daughter. As you mentioned in the article, – it has a room rent sub-limit of 1 % of the insured amount. So, I bought another policy from Liberty with a base policy of 3 lakhs and a super top-up of 1 crore.

My question is – in the future –  if I claim medical expenses from the first policy, if they did not pay the full amount because of the room rent sub-limit, can I claim that balance amount (not paid because of the sub-limit) from liberty insurance

It would be really helpful if you reply here or write an article about claiming medical expenses from 2 policies. I wish to know how to use the second policy to overcome sub-limit and co-pay clause limitations.

About the author: Ajay Pruthi is a fee-only SEBI registered investment advisor. He can be contacted via his website plnr.in. Ajay is part of the freefincal list of fee-only advisors and fee-only India.

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The question here is whether you can claim from two policies. The answer is yes, you can claim from two policies.

First, let us understand room rent sub-limit with an example:

Room rent sub-limit is essentially a cap on your room rent charges per day. Suppose you have taken a health insurance policy with a sum insured of 10 lakhs. If the room rent sub-limit mentioned in the policy is 1% of the total sum insured, this means that if you are hospitalized, you can spend only 10,000 per day on a room. This limit is not only applicable to room rent but also affects other costs proportionately.

Proportionate charges are the expenses that are applied in proportion to your room rent limits if you are admitted to the hospital.

Let’s say the surgery cost in a single room is 5 lakhs rupees. You have a room rent limit of 10,000, but you opt for a room with a rent of 12,000. In this case, you would be paid only 4.17 lakhs for the surgery.

Proportionate Charges: Rs. 5,00,000 * (10,000/12,000) = Rs. 4,16,666

Now, coming back to the main point: which policy to use and how to claim from two policies. We will take the example of the policies mentioned at the beginning of the article.

Scenario 1

Room Rent Sub-limit: Rs. 10,000 per day
Actual Room Rent: Rs. 8,000

Since the actual room rent is within the room rent sub-limit of 1% of the sum insured of 10 Lakhs, it is better to claim from the Oriental Insurance policy.

Scenario 2

Room Rent Sub-limit: Rs. 10,000 per day
Actual Room Rent: Rs. 12,000

Let’s say the hospitalization cost is 5 lakhs. Oriental Insurance will pay 4.17 lakhs in this case, as the actual room rent is higher than the sub-limit, and the proportionate amount would be paid (though medicine bills are paid at actual cost, let’s ignore that for calculation purposes). The remaining amount needs to get reimbursed from Liberty Health Insurance policy

Scenario 3– Taking example of scenario 2, would not it better to claim from Liberty Insurance?

Yes, it would be better to claim from Liberty Insurance if the hospitalization is pre-planned. Pre-planned here means, you already know that the total expenses would be around 5 Lakhs for the hospitalization. You can submit both policy details to hospital to take a pre-approval. 

One thing you need to keep in mind in this scenario is that the waiting period of pre-existing diseases in the policy from Liberty Insurance is over (if the policy has been purchased recently and there are some pre-existing diseases)

Scenario 4 – Unplanned hospitalization where you do not know the expenses

In this scenario, check the room rent first, if it is less than 10,000 per day. It is better to go for the Oriental Insurance policy. 

If the room rent is slightly more than 10,000, it is still better to go for Oriental insurance as you may not get cashless claim form Super top-up policy from Liberty insurance if you do not submit the details of both base and super top-up policy from Liberty at that time. I will write a separate article on how cashless claims work.

Scenario 5 – 

Room Rent Sub-limit: Rs. 10,000 per day
Actual Room Rent: Rs. 15,000 per day

Hospital Bill – 12 Lakhs

The Oriental Base policy will pay 8 Lakhs here (proportionate charges). You will have to pay 4 Lakhs from your own pocket. This 4 Lakhs now can be either claimed through Liberty base and super top up policy or 2 Lakhs from Liberty base policy and remaining 2 Lakhs from Oriental Super top up policy, which may again have room rent sub-limits. So, it is better to use Liberty base and super top up policy in the beginning itself.

To Summarize

1. It is always advisable to opt for the Oriental Insurance policy if the actual room rent per day is less than 10,000 and the estimated cost for hospitalization is less than 10 lakhs. Even if the hospitalization cost is slightly more than 10 lakhs, you can still choose the Oriental Insurance policy.
2. It is always advisable to opt for the Liberty Insurance policy if the estimated cost for hospitalization is significantly more than 10 lakhs. Ensure that you submit details of both the base and super top-up policies together.
3. It is always better to consult with the TPA (Third Party Administrator) in hospitals before submitting the policy details for claims.

*Disclaimer- Nothing contained in the article is a solicitation, recommendation, endorsement, or offer by me. If you have any doubts as to the merits of the article, you should seek advice from an independent financial advisor. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors. Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.