Super Top Up Individual Claim

Hi Devang,

Very pertinent questions. It will require a marathon effort to provide clarity and I'm happy to attempt that. There are not 3 but 5 questions in your post. I will address the queries first and then jump to questions, because answers to queries will set the stage for answers to the 3 questions. My responses:

Claim 2 query

For a moment just forget there is a base policy. Also forget Person 1 exists. We'll now only focus on Persons 2-5 and the super top-up policy. First a primer -

Super top-up is a product that allows policyholder(s) to aggregate all their hospitalization expenses during the policy period and use the aggregate for the purpose of calculation of deductible. A regular top-up policy does not allow this aggregation and deductible is evaluated for the purpose of every claim.

With this definition in place, now let us look at claim 2. Person 2 or P2 spent 6 lakhs during the policy period. Super Top up (STU) has deductible of 5 lakhs. So 6 minus 5 equals 1, i.e. only 1 lakh of spend would be considered for claim in the STU. Why?

An STU is not bothered how you paid the deductible amount. Whether it is spent out of pocket by policyholder or paid partially by a base policy is none of the concern of STU.

Therefore, only 1 lakh would come in the ambit of consideration for claim by the STU. It would pay as per the policy terms and conditions.

BUT BUT BUT, As a claim expert I need to add an insight which nobody from insurance industry would tell you -

The STU will take the entire bill of 6 lakhs, evaluate how much is payable IN THAT 6 LAKHS. Say there is proportionate deduction of 33% due to room limit. So 4 lakhs is payable amount. STU would say that you haven't crossed the threshold of 5 lakhs deductible and decline the claim. Just a scenario to warn you.

Claim 3 query

You mentioned that STU for P2 to P5 are all individual policies. Hence, deductible is considered individually.

P3 spent 3 lakhs on admission, while their deductible is 5 lakhs. So claim will be declined.

Had the STU been a floater policy like the base policy, STU would have allowed aggregation of treatment expenses of all the policyholders. So 6 by P2 and 3 by P3 (assuming expenses were made during the same policy period) would make it 9 and STU would consider with deductible of 5 on this 9, so potentially 4 lakhs are up for evaluation for claim.

Question 1

My answer to query for Claim 3 answers your Question 1.

Since all STUs here are individual policies, deductibles will apply INDIVIDUALLY to each policyholder. STU doesn't care about the base policy. I know agents mix up the story for customers, but forget you have a base cover. Each policy evaluates claim in isolation.

Question 2

Yes, if the insurer or insurer-TPA combination is same in multiple policies, then in the same cashless you can request insurer/TPA to consider claim for same admission.

Why it is NOT possible when insurers are different, you would ask? Time for another primer -

Each insurance policy has different terms and conditions. A second policy would consider the entire expense and then calculate what is payable as per its terms and conditions. By the principle of INDEMNITY, if any part of the the approved portion of the expense has been paid partially or fully by a first policy, then second policy only needs to pay the remainder. To do so, the second policy needs a document called as SETTLEMENT LETTER from first policy to check which of the approved expenses were paid in the settlement letter, thus deriving the remainder payment liability for second policy. When insurers are different, this handover of settlement letter from one insurer to second can be an elaborate process and take considerable time. However, when both claims in 2 policies are housed within the same insurer or TPA, then the sourcing of settlement letter can be instantaneous.

The above rule is also applicable if a policyholder were to split kharcha over 2 or more base policies. I mean I've done plenty of split claims now on 2 or 3 policies very very successfully. A claim for admission in base and top-up policy is nothing but a split claim.

Question 3

Answer to this question originates from answer to Question 2. Use the principle of indemnity to do your calculations. STU will evaluate the whole bill and check its liability. Then if certain part of the eligible amount has been paid via capping in the base policy, then STU will pay the residual amount as per its terms and conditions.

Example, base and STU have 20k limit for cataract, and say the STU has deductible of 1 lakh. You use some jazzy lens for cataract surgery and cost comes to 1.5 lakhs. You file a claim with base, it pays you 20k and rejects 1.3 lakhs. Now you file this 1.5 lakhs with STU. It says okay the entire 1.5 lakhs for cataract is eligible and deductible is breached. Now from the 50k that is to be considered, STU finds that the base has already paid 20k. So liability drops to 30k. But hey, there is cap of 20k in STU as well. So it just pays 20k and you make 40k from 2 policies. I hope this is clear.

I hope my answers have done justice to your queries and questions. If you have any followup doubts, happy to answer them.

Anuj Jindal

Co-founder

SureClaim