Multiple health insurances – How enjoy best of both worlds?

Did you know that you might end up getting reduced claim settlement though you might have two or more health insurance policies with adequate cover? This happens because there is a contribution clause in most policies and you failed to inform both the insurers (new and existing) about the other policy.

Contribution clause means that if there is more than one policy, then in case of any claims made, all the policies will contribute in equal proportion to the amount insured.

When you have two or more health policies, you can make a claim under one or all of the policies. Let us consider the three possible scenarios.

Scenario 1: If the amount claimed doesn’t exceed the sum insured under a single policy, then contribution clause will not apply.

Scenario 2: If the amount claimed exceeds the sum insured under a single policy, then contribution clause will be applied. So, if you have not disclose about the other insurance policy or policies, then the insurer will pay only up to the sum insured and you have to bare the rest.

Scenario 3: When the claim is under Defined Benefit Policies (like critical Illness, hospital cash), the contribution clause will not be applicable and the insurers will pay the lump sum.

So, to enjoy the benefit of having multiple health insurance policies, ensure to keep both (or all companies) insurers informed about your other policy. Now you can happily enjoy best of both policies if the need arises.


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