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Check your insurance policy before going abroad

Rosy Kumar

"MediClaim means peace of mind," is a claim made by the insurance companies. But it doesn't always work that way and the insurance companies often try to wriggle out of their liabilities.

It is always prudent to read the fine print before signing on the dotted line - especially if you're planning to opt for an overseas MediClaim policy. An overseas MediClaim policy is supposed to take care of all medical needs when the policyholder is abroad.

Take, for instance, the case of S J Lobo, who had obtained such a policy for the period April 2, 1997, to September 28, 1997, from Oriental Insurance before leaving for the US.

Unfortunately, Lobo had to undergo angioplasty surgery with a stent implantation while he was travelling. Consequently, Lobo informed the US hospital that the bill would be paid directly by the insurance company as per the MediClaim policy.

Soon after his return, Lobo submitted a claim to Oriental Insurance with the supporting documents for all the expenses incurred on treatment in the US.

Oriental, however, returned the claim documents with instructions that the policy holder should approach Mercury International, Brighton, UK, for the settlement of his claim. Oriental refused to entertain his claim.

Lobo then filed a consumer complaint with the Karnataka State Consumer Disputes Redressal Commission, Bangalore, asking that the insurance company pay him $40,000, or Rs 1.6 million, as reimbursement of medical expenses incurred by him.

The insurance company filed a reply in which it rejected its liability to honour the medical claim on the ground that it was clearly mentioned on Page 15 of the policy that claims in excess of $500 should be submitted to Mercury International at their UK address and they alone were responsible for settling overseas MediClaim policies.

Having agreed to abide by the terms and conditions, as stipulated in the policy documents, the claimant could not make the Indian company liable in any way, it pleaded.

The state commission dismissed the complaint filed by Lobo. In its order, the commission observed that, "what we see from the material placed on record is that the complainant has blissfully closed his eyes on all specific stipulations contained in the policy and has come out of slumber only when he reached back India."

Kavita Kundra's experience was worse. She had taken an overseas MediClaim insurance policy, again from Oriental, before leaving for the US. When she fell sick she tried to contact Mercury Insurance in the US on the telephone number given in the insurance policy.

Kundra failed to establish contact with Mercury Insurance and as she did not have enough money to afford the treatment, she cut short her trip and returned home.

On her return, Kundra found that Mercury's phone number in the US - as mentioned in the policy - was incorrect. Kundra filed a case before the MRTP Commission, but was just awarded Rs 5,000 for her inconvenience.

The Karnataka State Commission - in its judgement in Lobo's case - went to the extent of observing that "in the scheme of insurance of whatever nature, the terms and conditions issued along with and forming part of the policy is paramount and invariably such conditions may contain terms which have no place in a proposal form."

"The policy and the terms and conditions appended thereto in fact constitute the whole gamut of contract between the parties entered into on the principles of uberrima fides and hence it cannot be said by any semblance of logic that any one or more of the conditions stipulated therein cannot be enforced simply because a parallel condition is absent in the proposal form."

The two cases mentioned here should be an eye-opener for anyone taking out a MediClaim policy. There are hundreds of escape clauses for the insurance companies and it's better to read them before falling sick rather than the other way round.

The author is an advocate and the editor of Consumer Protection and Trade Practices Journal.

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