While buying an overseas insurance policy at the click of a mouse, please check your proposal documents before you buy, as more travelers are discovering that when it comes to claims, insurance companies deny claims on grounds of pre-existing ailments.
Ombudsman offices are flooded with complaints from policy holders that claims are getting repudiated. For example, the Chennai office of insurance ombudsman has seen more than 85% of all complaints in the non-life sector related to medical insurance. “It was slightly lower last year,” said an official at the office of the Ombudsman. “Across India too, the situation is same.”
Sample this: Meera Chandrasekaran wrote an overseas travel policy with Bajaj Allianz for a policy cover for $50,000 through an advisor of Bajaj Allianz. No proposal was obtained at the time of insurance and no evidence of any pre-medical done before acceptance of the insurance. The sub limit under the policy i.e. the maximum liability for any illness was $12,500.
She travelled to the US and fell ill. She was soon admitted in Hill Crest Hospital, Ohio, with complaints of tightness in chest. The claim was intimated to insurer for reimbursement of treatment expenses of $19261.15.
However, the claim was rejected by the insurer on the grounds of non-disclosure of pre-existing disease i.e. Hyperlipidemia, which was recorded in the hospital records.
She stated that due to language problem and difficulty in understanding English spoken by US doctors, the doctors have recorded that she was suffering from chest discomfort, which is incorrect.
Further, she referred to the attending physician’s report wherein it is stated that the chest tightness and pain is not due to any pre-existing conditions and that she was not suffering from cardiac ailments.
The ombudsman rejected the repudiation by insurer.
“There is an increase in complaints that we get due to mis-selling of policies online. Either there aren’t relevant ailments in the drop-down column of online applications or only some of the ailments are available in the relevant fields. If an applicant does not fill in with relevant information, we see insurance companies denying claims,” said M Vasantha Krishna, insurance ombudsman, Tamil Nadu and Pondicherry.
Officials at the Chennai office said that in a specific case, a medical insurance claim was repudiated by the insurer as the insured underwent a surgery for Tonsillitis as child 35 years ago.
“The insurance company rejected the claim terming that the surgery details were not disclosed. We had to step in and get the claim honored,” the official said.
Law mandates that every insurance policy before being written must have a proposal and the policy holder must be handed over the proposal along with the policy.
“Most cases, policy holders don’t bother to look into the details and get stuck,” the official added. Even if the policy is offered online, the proposal must be shared offline, the official said.
“I am aware of cases where a portal mails a document instead of a proper policy. These overseas policies are only for psychological benefit of the traveler and I have come across several instances of repudiation of claims,” said R Venkatasubramanian, founder of VKC Forex.
Most of the travel agents have tie ups with insurance companies as medical insurance is a must for getting visa to Europe and the US. The forms are filled up by agents of the insurance companies using the information supplied by the travel agent, the same way in which application forms for credit card or bank loans are filled and submited.
Basheer Ahmed of Metro Travels said: “There have been instances when passengers had trouble in claiming the money in case of hospitalisation abroad. But in majority of such cases passengers had applied online. They may not give relevant information which leads to a failed claim.”