{"id":12769,"date":"2016-03-03T05:08:24","date_gmt":"2016-03-03T05:08:24","guid":{"rendered":"http:\/\/securenow.in\/blog\/?p=2215"},"modified":"2021-01-21T13:09:13","modified_gmt":"2021-01-21T13:09:13","slug":"fuzzy-logic-in-health-cover-contracts","status":"publish","type":"post","link":"https:\/\/securenow.in\/insuropedia\/fuzzy-logic-in-health-cover-contracts\/","title":{"rendered":"Fuzzy logic in health cover contracts"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p><em>Published in Mint on 23rd June,2014, Written by Kapil Mehta<br \/>\n<\/em><br \/>\nInsurance contracts are one-sided. You see it after paying and completing your medical tests. There is little you can do to change the contract. Last year, the Insurance Regulatory and Development Authority (Irda) standardized definitions for several diseases and terms in health insurance contracts. This was a good step but much work remains, particularly in critical illness and personal accident plans that are subjective.<br \/>\nTake this critical illness exclusion from the contract that a leading insurer has on its website. \u201cCritical illness symptom\/s (and\/or the treatment) of which were present in the insured person at any time before inception of this policy or on the date on which cover here under was granted to such insured person, or which manifests itself within a period of three calendar months from such date, whether or not the insured or the insured person has knowledge that the symptoms or treatment were related to such critical illness.\u201d<br \/>\nThat\u2019s scary. I assessed this paragraph for readability in the lovely Hemingway App and learnt that a post-graduate degree is necessary to understand this clause. Hemingway would have preferred \u201cWe will not pay a claim if the disease began before you bought this insurance. Whether you knew it or not.\u201d The app confirms that this new sentence can be understood by a child in grade 3. The original clause is unreadable but even understanding it does not simplify the problem. Why should a claim be denied if the insured did not know she suffered from a disease? The standard definition prescribed by the regulator is simpler but leaves scope for claim denial even if the insured was not aware of the disease. Consider a person who has suffered from migraine for several years and, after buying insurance, is diagnosed with brain tumour. Under the current contract definition, this claim can be denied. Contrast this with the Australian Insurance Contracts Act, 1984 that prohibits insurers from limiting their liability in situations where a consumer had symptoms but was not aware that she suffered from the disease. The Australian Act is well drafted, consumer-friendly and a good reference point for our own law.<br \/>\n Another stand-alone health insurer\u2019s contract states that claims can be rejected for \u201cfailure to seek or follow medical advice\u201d. Who decides if the patient should have sought medical advice earlier? Think of a patient whose claim is denied based on this clause\u2014she is now critically ill and penalized for not reaching out to a doctor in time? That\u2019s unfair.<br \/>\nSome health insurance contracts exclude \u201cmedical expenses where inpatient care is not warranted\u201d. Does the insurer or the doctor decide this? I experienced this clause first hand. In January this year, my daughter was diagnosed with tapeworm in her brain. The paediatric neurosurgeon recommended she get hospitalized for two days to initiate treatment. The oral medicine to kill the tapeworms sometimes causes a seizure and hospitalization allows immediate action. My health insurer pre-approved this hospitalization but when the time to pay came, it backed out because, in its view, hospitalization was not required. Later, in a chance meeting with senior executives of that insurer, I asked the rhetorical question\u2014what would their chief executive officer have done if his own child was involved? Would he differ with the surgeon\u2019s recommendation and keep his child at home? The claim was paid because I had privileged access. Most don\u2019t. Another insurer excludes occupational diseases. What\u2019s that? Is heart attack an occupational disease? Perhaps there was too much work pressure? Insurers exclude injury in a war, whether declared or not; civil commotion; unrest. How does that work? The gem is an exclusion for critical diseases that reads \u201closs caused directly or indirectly, wholly or partly by infections or any other kind of disease\u201d. So what\u2019s covered? Several health insurances come bundled with personal accident cover. These claims are excluded if there is \u201cany change of profession after inception of policy which results in the enhancement of our risk\u201d. The UK Financial Conduct Authority and financial ombudsman would not allow this because it changes the terms after insurance has been bought. Customers cannot anticipate career changes or assess which changes are relevant to report. I don\u2019t want to highlight only the negative points. There are several good clauses in our contracts, particularly in mediclaim and term insurance. Unlike some other markets, our contracts do not allow insurers to penalize consumers for small mis-declarations or inadvertent mistakes. Disease and accident definitions are clear. Suicide in the first year is the only exclusion allowed in term insurance. Our ombudsmen are strongly pro-customer. However, we do need comprehensive insurance contract guidelines and a mechanism for monitoring deviations. The Australian, the UK and South African markets have excellent examples of contract principles that are directly applicable to us. The UK financial ombudsman and Financial Conduct Authority provide an online option to report unfair contract terms. Read more about this at http:\/\/goo.gl\/utgCTe, http:\/\/goo.gl\/lM3Ntr and http:\/\/goo.gl\/oaIxTa. Insurers have an excellent opportunity. Those that make contracts more readable and go beyond the regulator\u2019s prescribed minimum standards will be highly respected. Note: Some clauses have been paraphrased for brevity.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Published in Mint on 23rd June,2014, Written by Kapil Mehta Insurance contracts are one-sided. You see it after paying and completing your medical tests. There is little you can do to change the contract. Last year, the Insurance Regulatory and Development Authority (Irda) standardized definitions for several diseases and terms in health insurance contracts. This [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":2641,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_lmt_disableupdate":"","_lmt_disable":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[319],"tags":[],"class_list":["post-12769","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-media"],"acf":[],"modified_by":"blog","_links":{"self":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/12769","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/comments?post=12769"}],"version-history":[{"count":1,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/12769\/revisions"}],"predecessor-version":[{"id":14179,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/12769\/revisions\/14179"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/media?parent=12769"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/categories?post=12769"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/tags?post=12769"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}