DON'T Buy Health Insurance

Summary

In this video, the host highlights the hidden clauses in health insurance policies that often lead to claim rejections, amounting to over 26,000 crores in 2024. Key issues include sublimits, room rent capping, co-payment clauses, restoration benefits, and no-claim bonuses, which can all drastically reduce the amount insurers pay out. The host explains how these sneaky clauses work, providing examples and offering advice on how to avoid pitfalls, like zonal co-payments and unreasonable charges. The video aims to raise awareness and help consumers make informed decisions when choosing health insurance.

Takeaways

• 😀 Health insurance claims worth over 26,000 crores were rejected in 2024 due to hidden clauses in policies.
• 😀 Sublimits in health insurance policies can lead to insurers paying only a fraction of your medical bills, even if your sum insured is high.
• 😀 Room rent capping is a common clause, where insurers can pay only a portion of your room rent based on set limits, leading to disproportionate deductions from your total bill.
• 😀 No claim bonuses increase your sum assured each year, but this doesn’t affect room rent capping, which is calculated based on your original sum insured.
• 😀 Restoration benefits sound attractive but often don't cover the same disease, making them less useful than they seem.
• 😀 Co-payment clauses require you to pay a percentage of your bill, increasing your out-of-pocket expenses despite lower premiums.
• 😀 Zonal co-payments can result in higher costs if you make claims in a city with higher medical expenses than your declared zone.
• 😀 The waiting period clause in health insurance often involves a 30-day waiting period for all claims and specific exclusions for certain diseases.
• 😀 Top-up policies seem beneficial but only activate after your sum assured is exhausted, meaning they may not help with smaller bills.
• 😀 The 'reasonable and necessary' clause allows insurers to reject claims based on what they deem fair, often leaving the policyholder with no recourse to challenge unfair decisions.

Q & A

What are the nine hidden clauses that can affect your health insurance claim?

The nine hidden clauses include sublimits, room rent capping, co-payment, co-payment zones, waiting period, top-up clauses, daycare treatment restrictions, cashless benefits, and the 'reasonable and necessary' clause.

What is a sublimit in a health insurance policy?

A sublimit is a cap set by the insurer on specific treatments or services. For example, if you have a sum assured of 10 lakh rupees, but a sublimit on a certain treatment, the insurer may only cover a portion, even if the total bill is less than your sum assured.

How does room rent capping affect health insurance claims?

Room rent capping limits the amount you can spend on a hospital room. If you choose a room above the capped amount, the insurer applies a proportionate deduction to the total bill, reducing the coverage for other treatments.

What is the issue with the 'no claim bonus' in health insurance policies?

The 'no claim bonus' increases your sum assured each year you don’t make a claim. However, room rent restrictions are often calculated based on the original sum assured, not the increased sum after the bonus is applied, which can be misleading.

What is a restoration benefit in health insurance, and why is it problematic?

The restoration benefit replenishes your sum assured if it's exhausted. However, it may not cover the same disease or condition, rendering it less useful than advertised.

What does the co-payment clause in a policy mean?

Co-payment means you share a portion of the bill with the insurer, such as paying 20% of a medical bill. This reduces the insurer’s payout but can lower the premium of your policy.

What are zonal co-payments, and why should they be avoided?

Zonal co-payments require policyholders in different geographic regions to pay varying premiums. If you make claims outside your assigned zone, you may have to pay a portion of the bill yourself. This clause should be avoided to prevent unfair charges.

What is the waiting period in health insurance, and how does it affect you?

The waiting period is the time you must wait after purchasing the policy before certain conditions are covered. For example, a 30-day waiting period means you can’t claim for medical treatment during the first 30 days of the policy.

What is the problem with top-up policies in health insurance?

Top-up policies only come into effect when medical bills exceed the initial sum assured. If the bill is below the top-up threshold, the additional coverage is useless, and you are left to cover the costs yourself.

What is the 'reasonable and necessary' clause in health insurance?

This clause allows insurers to refuse claims if they deem the costs of treatment unreasonable or excessive. The problem is that the insurer decides what is 'reasonable,' often leaving policyholders without recourse.