Study fine print before buying insurance policy

Source:- timesofindia.indiatimes.com

Insurance companies project the benefits of a critical illness policy, but the hidden terms and conditions are not known till one carefully studies the terms and conditions of the policy. In worst cases, many realise that the treatment cost is also not covered.

Case Study: Bhupinder Kumar was associated with Bajaj Allianz Life Insurance since 2005. He insured himself for Rs 2 lakhs under the company’s Criticare Insurance Policy. The policy commenced on September 28, 2005 and was renewed every year.

Kumar suffered a heart attack on April 29, 2007 and he was hospitalized at the Patiala Heart Institute. He was later shifted to Dayanand Medical College and Hospital in Ludhiana. During his hospitalization, he underwent an angiography and a stent was placed in his heart. He was discharged on June 20, 2007. The total cost came to Rs 2.5 lakh. He lodged a claim under the policy, but the claim was not settled despite followup.

He then filed a consumer dispute. The district forum allowed the complaint, and directed Bajaj to pay Rs 2 lakhs along with 9% interest and Rs 7,500 as cost. Bajaj appeal to the Punjab State Commission which reversed this order. Kumar approached the National Commission in revision.

The commission considered the clauses of the policy to ascertain whether angiography and placement of stent fell within the scope of a critical illness policy. It observed that regardless of the ailment or the treatment given, coverage would be determined by the definition of “critical illness” stated in the policy. A consumer forum has to strictly construe the policy terms. It cannot expand the scope of coverage beyond the definition and ambit stipulated in the policy. If the forum attempts to do so, it would be transgressing its powers to confer an unjustified benefit on the consumer.

The National Commission observed that the medical record showed that Kumar was diagnosed to be suffering from single vessel coronary artery disease for which he underwent a procedure called PTCA with stenting. This was not within the scope of the criticare policy. As per the policy conditions, it covered heart surgery for correcting the narrowing of three or more coronary arteries with 75% blockage. Angina and chest pain were also excluded. On comparing the policy terms with the treatment given, the commission observed that even though Kumar had suffered from a critical illness and was treated for it, the ailment did not fall within the scope of “critical illness” as defined under the policy.

Accordingly, by its order of July 4 delivered by Anup Thakur, the National Commission upheld the state commission’s order and dismissed Kumar’s revision, holding that the claim was beyond the scope of the policy.

Conclusion: A coverage under a critical illness policy is limited. Some policies provide that the insured has to survive for 30 days, and only thereafter he would be entitled to lodge a claim for planned treatment. There are several other riders which exclude the insurance company’s liability.

A regular mediclaim policies give better coverage than critical illness policies. So study the scope of the benefits rather than be deprived of reimbursement when a claim arises.