Health insurance policy: What do customary charges refer to?

livemint.com:

—Name withheld on request Reasonable and customary charges refer to standard charges, which are common for a particular line of treatment in the geographical area for similar types of hospital. If the clause is applicable in the policy, an insurer can limit the extent of reimbursement to the extent of what they consider as reasonable. The primary objective of this clause is to prevent overcharging by the hospital in connivance with the policyholder.

Considering that medical cases tend to vary substantially, it is extremely difficult to ascertain reasonable charges. So, insurers rarely enforce this clause. If your policy has no room rent capping, then the insurer cannot force you to opt for a lower category room.

The ‘reasonable and customary’ clause cannot be applied to lower the policy benefits. Often, insurers negotiate package rates with hospitals for single and shared room, as those are the most frequently chosen options. However, that cannot be a reason to deduct claims.

You should file a grievance with the insurer to reassess the claim. If they fail to address the grievance, you could write to the regulator and file a case with the insurance ombudsman. Such deductions and rejections are not common across all insurers.

While choosing an insurer, you must look at their number of complaints relative to the size of their business. This will help you ascertain the service quality of the insurers. —Name withheld on request Critical illness policies and family health insurance, operate differently and serve two different purposes.

A standard critical illness policy pays a lump sum on diagnosis of a specified illness. The coverage is limited only to the specific list of illnesses. Once the amount is paid, the policy