Old illness rips through medical cover
Ambiguous Wordings Put Policy Holders At Disadvantage, Result In Rise Of Insurance Claim Disputes In City ………Viju B | TNN
The number of cases relating to medical insurance claims filed at various consumer courts across Mumbai and Thane have gone up by around 70% over the last one year alone. TOI found that the reasons for this drastic increase was because claims of a majority of complainants had been rejected by insurance firms on the grounds of some pre-existing illness.
In fact, in many cases, insurance firms have been found to reject the claims on flimsy grounds. Consumer activist Jehangir Gai said that in a majority of the cases, insurance companies use the clause of pre-existing disease to reject the claims. He said insurance companies often claim that the policy holder is suffering from a disease for a long time. This is proved wrong when the case comes up for hearing at a consumer court as the firms do not have any solid evidence to back their claims. They come up with medical reasons not even remotely connected with the policy holder, he said.
Agrees consumer activist Arun Saxena, president of the International Consumer Right Protection Council, an NGO that takes up consumer cases. In the last six months alone, we received around 50 disputes related to medical insurance. In most cases, the claims have been rejected stating that the person has some pre-existing illness, said Saxena.
The opening up of the insurance sector in the late 1990s, brought in private players and all-out competition to grab a share of the pie. The result: insurance policies are now sold over the phone or even through the internet. Consumer activists complain that many private sector insurance firms provide medical insurance without even doing a medical check-up for people below the age of 45. Insurance firms, out to capture a greater market share, do not realise that false claims may arise if they do not do a proper check on the applicant when selling the policy, Rajan Alimchandani, a consumer activist said.
The Insurance Regulatory Development Authority (IRDA), the nodal authority that formulate norms and rules in the insurance sector, last year issued a circular making it mandatory for applicants taking medical insurance policies to submit their medical records, details of ailments, diseases, diagnosis and hospitalisation in the previous four years. This rule is applicable for all non-life insurance policies. For life insurance policies, the applicant will have to p rov i d e the entire medical history, said an IRDA official.
The IRDA now plans to come up with a uniform definition of pre-existing illness that would be binding on all insurance companies. This circular, which is in the final stages, will have a standardised definition of pre-existing illness. It will ensure correct usage, language and meaning of pre-existing illness while issuing policies, said a senior IRDA official.
Reasons for rejection
Reasons for rejection
* Insurance firms argue the claimant has a pre-existing illness
* There is no clarity on the existing definition of pre-existing illness
* The claimant has hidden certain ailments and previous medical records from the insurer
* The insurance agent does not inform the client about the details in the contract
* The policy holder does not read the fine print properly
* Insurance companies do not conduct any medical check-ups on policy holders in the age group of 35 to 45
SOME CASES ALREADY SOLVED, OTHERS KNOCKING ON JUSTICES DOOR
The South Mumbai Consumer Forum in March this year passed a landmark order, compensating the family of a woman killed in an accident. Homai Mehta, a Dadar resident, died in a road accident in May 4, 2001. She had an accident policy cover from New India Assurance Company Ltd. But the firm rejected her claim saying she had a pre-existing illness Dermatonuositis a growing weakness on four limbs. The consumer forum, after hearing the case, awarded Rs 10 lakh as compensation on March 13 this yearUrmila Shahs claim for two knee-replacement surgeries was rejected by Royal Sundaram General Insurance two years, ago on the grounds that her knee problem was chronic and not new. When the case came up before the insurance ombudsman, he upheld the insurance companys stand. Shah, a Mahim resident, then filed a complaint with the Central Mumbai Consumer forum which granted around Rs 5.5 lakh as medical compensation for her knee operation on February 12 this year
Hirali B Desai , who was doing her articleship in chartered accountancy, felt giddy in office and had to be admitted to the ICU of Bombay Hospital on June 11 this year. Though she had a cashless insurance policy, ICICI Lombard delayed her claims for 24 hours and she had to pay cash to get discharged from the hospital. The insurance firm insisted on her detailed medical report, though rules state that in the case of an approved hospital, cashless claims can be entertained after doctors provide an estimated cost. Hirali is now planning to approach the consumer court
When Andheri resident Vandana Lakhias joint mediclaim insurance policy was not renewed by New India Assurance Company, her husband Dr Ajay Lakhia approached the South Mumbai consumer forum in October 2006. Vandana, a cancer patient, had earlier got compensation for medical treatment, but the insurance company refused to renew her policy. When the case came up for hearing, the consumer forum asked the insurance company not only to renew the policy and but also to provide compensation, on April 16 this year
Vasudha Sanglekar, who was treated for cerebrovascular disease, did not get her mediclaim as the insurance firm said that she had diabetes which the company termed as a pre-existing illness and the cause for the cerebrovascular disease. This, in spite of the fact that the cardiologist had certified that diabetes cannot be the primary cause of this disease. The Sanglekars are now planning to approach the consumer court shortly against the insurer, New India Assurance, next week