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Pros and Cons of Having Two or More Health Insurance Plans

advantages of having two or more health insurance plans

These days, more and more people are getting health insurance coverage. Due to the rising cost of healthcare, having this kind of financial protection can be an essential safeguard in unexpected medical emergencies.

However, if one policy is good, are there any benefits to buying multiple medical policies for extra protection? Read to know the pros and cons of having multiple health insurance policies.

Team Digit

What is Multiple Health Insurance?
Can You Have Multiple Health Insurance?
How Does Multiple Health Insurance Work?
Pros of Multiple Health Insurance
Cons of Multiple Health Insurance
When Should You Get Multiple Insurance?
Effective Use of Multiple Plans
Things to Consider
Frequently Asked Questions

What is Meant by Having Multiple Health Insurance Plans?

Multiple Health Insurance means having more than one health insurance policy, either with two different insurers or private and public health insurance. It is also called "multi-policy" or "dual health insurance." An insurer can create a regular finance structure, such as a payroll tax or monthly premium, to provide necessary funds.

This fund pays for the health care benefits outlined in all the insurance agreements by evaluating the overall risk of health risk and health system expenses over the risk pool. A central organisation, such as a government agency, commercial company, or non-profit organisation, administers the benefit.

Can You Have Multiple Health Insurance Coverage?

It is definitely possible to get a second or even a third health insurance plan. Indeed, it can be a great way of getting additional or more comprehensive coverage. It can also serve as a backup to an employee's health insurance and can reduce the risk for those with pre-existing conditions.

However, it is important to remember that having more than one plan does not mean that you get reimbursed twice for medical treatment. Even when you have more than one plan, the total amount that they will cover at the time of a claim will not exceed 100% of the treatment cost.

For example, if you get surgery, you will choose one plan to pay for this up to its coverage limits. Once this insurer has paid the amount, the remaining bill goes to your second or third insurance, which will then cover part of or all of the remaining costs, again up to its coverage limit.

How Does Having Multiple Health Insurance Work?

If you have two or more insurance policies, one will serve as your primary source of coverage and the other as your backup. As the titles suggest, your secondary coverage takes up any unpaid bills if needed after your primary coverage kicks in. This depends on your Coordination of Benefits (COB), which specifies which health plan kicks in first.

Each health insurance plan has a COB policy that sets forth how it works with other health insurance. By doing this, the insurance companies may communicate with one another and prevent paying for a patient's services twice. You will receive up to 100% of the cost of a procedure or doctor visit if you have the COB.

What are the Pros of Having Multiple Health Insurance?

benefits of taking multiple health insurance plans and policy

Having a second or even multiple health insurance policies can have several benefits, such as:

1. Wider Coverage

Having more health plans will give you the scope to have more widespread coverage. If you look closely at your first policy, you can choose the second and any subsequent policies based on what is not covered in that policy, such as a critical illness cover, or a maternity cover.

Additionally, if your primary plan is an Employee Health Insurance, having an additional plan will ensure that you have consistent coverage even after you leave the company.

2. More Effective Premiums

When you invest in multiple health policies with smaller covers instead of one plan with big coverage, you are likely to have lower premium amounts. And, the smaller covers can ultimately lead to having more widespread coverage as mentioned above, without placing too much stress on your pocket.

3. Coverage for More Specific Conditions

When you have multiple policies, you have the option to cover more illnesses. For example, by having one generic policy and one specific policy you can cover both basic hospitalization and treatments as well as critical conditions through a Critical Illness Policy.

Based on your and your family’s situation, you can also opt for Individual Plans, a Family Floater Plan, or COVID-19 Insurance, to maximize your coverage as compared to one generic plan.

4. More Efficient Policy Management

When you have multiple policies, you will be able to decide which one to make a claim against, should such a situation arise. This way, you can ensure that one policy remains undisturbed and earn a No Claim Bonus or Cumulative Bonus for a claim-free year.

5. Protection Against Claim Rejection

In case you make a health insurance claim, and it is rejected, it can be a financial disaster. But when you have more than one insurer, the claim that was rejected by one insurer might be accepted by another.

6. Further Tax Benefits

Having multiple health insurance plans will also result in additional tax benefits under Section 80D of the Income Tax Act. When you have a health plan, you can further claim tax returns and actually save money on income tax.

What are the Cons of Having Multiple Health Insurance?

Having several insurance policies guarantees additional insurance coverage, but it does have some negative probabilities as well:

1. Extra Expenses

Maintaining multiple health insurance policies can become expensive, often outweighing the benefits of the additional coverage. Your overall spending increases, and you might never end up using all the policies. A smarter approach is to combine a comprehensive health insurance plan with a term insurance policy. This combination is more cost-effective and ensures you're protected against both medical emergencies and life uncertainties.

2. Difficulty in Management

Maintaining several policies at a time is bewildering and may lead to partial loss of benefits or duplication of certain benefits. Knowing when to pay for which policy can be difficult and what to use in the time of need.

3. Duplication

You might pay for a policy that covers what you already have. This does not add value. This duplication does not provide additional value but represents wasted expenditure on unnecessary coverage.

4. Claim Problems

The involvement of several insurers makes claims processing more cumbersome and often delayed or disputed. This can frustrate policyholders and result in longer waiting times for claim resolutions.

5. Administrative Inconvenience

Keeping track of multiple policies with their renewal dates and coverage details is relatively precise. This administrative burden increases the risk of missing important deadlines or failing to update necessary information, which affects your coverage.

When Should You Get More Than One Health Insurance Plans?

There are a number of reasons why you might wish to have two or more health insurance plans:

You are covered only under a group plan like your parent’s Family Floater Plan and or an Employee Health Insurance and you want additional coverage from an Individual Health Plan.
You only have an Individual Health Plan and need more specific coverage like a Critical Illness Plan or a COVID-19 cover.
You have just gotten married and wish to get a Family Floater in addition to either an Individual Plan or an Employee Health Insurance.
You require a Top-up or a Super Top-up Plan over and above your current policy.

All of these scenarios will help you to ensure a strong health insurance portfolio that will provide financial stability in a health crisis.

How to Effectively Use Multiple Health Insurance Plans?

Utilising multiple health plans has its advantages, though it requires proper management and seeking ways to keep your out-of-pocket costs as low as possible. The steps listed below are ways to use multiple health insurance plans effectively:

1. Understand Coordination of Benefits (COB)

Health Insurers have rules on who pays as the primary payer or secondary payer. Read your plans' COB policies to understand their process when paying claims.

2. Compare Your Plans to Check Overlaps

Compare your plans to see what services are covered and to what extent. Be aware of any overlap in coverage.

3. Use Primary Insurance First

As you receive medical care, use your primary insurance plan first. That plan pays its share of the costs under its benefits.

4. Submit Claims to Secondary Insurance

After your primary insurance has processed the claim, submit it to your secondary insurance to pick up other costs.

5. Understand Your Coverage Limits

Know each plan's limits and exclusions to avoid unexpected costs. Many plans limit certain types of treatments.

6. Review and Update Your Plans Regularly

Review your insurance plans to ensure they meet your needs and remain on top of all available benefits.

Following these steps, you can coordinate different health insurance plans and maximise your health benefits.

Things to Consider for Additional Health Insurance Plans

When you opt to buy a second (or even a third) health insurance plan, it is essential to go through the fine print of the policy in detail to ensure that you are making the right decision.

Here are some things to keep in mind:

Things to Consider	Description
Look at the Coverage	See what is covered in the second policy you wish to get, and ensure that it will offer a wider range of coverage than your first policy.
Go Through the Terms	Check the details of the policy such as co-pay clauses, room rent conditions, sub-limits, deductibles, and more.
Note the Sum Insured	Look at what the SI of the policy is, and check that it is enough for your needs when added to your current coverage.
Check the Renewability	Opt for a plan that offers lifetime renewability, especially if your current plan only covers you until a certain age.
See if You Need a Critical Illness Add-on or a Top-up Plan	Many insurers have the option of adding to your existing coverage top-up and super top-up plans or with add-ons for critical illness coverage, or maternity cover. Check if this additional coverage will fulfil your needs before opting for a second insurance plan.

With rising healthcare costs, it's increasingly common for individuals to hold multiple health insurance policies, such as critical illness and personal accident covers, alongside their base health plan. While this may offer broader protection, it can also lead to higher premiums and overlapping benefits. Instead of juggling multiple policies, consider a more balanced approach: combine a comprehensive health insurance plan with a life insurance policy.

This not only ensures financial support during medical emergencies but also provides your loved ones with a safety net in case of your untimely demise. Ultimately, whether you choose a single high-coverage plan or multiple smaller ones, the key is to align your insurance strategy with your financial goals and family needs.

FAQs about Pros and Cons of Multiple Health Insurance

All

Is it worth having more than one health plan?

It is up to you to decide whether you require more than one health policy. Doing so will increase the chances of your claims being approved, and will also offer more coverage. On the other hand, it will also mean more premiums to take care of, more paperwork, and having to deal with two plans rather than one.

Can you use multiple health policies for a single claim?

Yes, in most cases you can use two different policies to settle one claim. You must go through one insurer first, and then if the cover is not sufficient, the other policy can be used for the expenses.

The second insurer might require a claims settlement summary from the first insurer (noting the amount already claimed), as well as any original documents and bills before paying the remaining amount. However, in the end, it will depend on the contribution clauses and other terms and conditions of the policy.

Can you be covered under two group plans such as an employee health insurance and a family floater plan?

Yes, it is possible to have such a combination of health insurance plans.

How is group health insurance different from individual health insurance?

A health insurance plan that covers multiple people, such as one provided to employees by an employer is called group coverage. However, a health insurance you buy on your own is called individual coverage.

How do I coordinate benefits between multiple health plans?

Coordination of benefits (COB) involves determining which insurance policy pays first. Typically, the primary insurer pays first, and the secondary insurer covers the remaining costs up to its limits.

Can I claim the same expense on both health plans?

No, you cannot claim the same expense on both plans. Each insurer pays only their share, and you should not receive more than the total expense cost.

Will having multiple health plans lead to higher out-of-pocket costs?

No, while having multiple plans might reduce out-of-pocket costs by covering more expenses, you will still need to manage deductibles, co-pays, and co-insurance according to each plan’s terms.

What happens if my multiple insurance plans overlap in coverage?

When coverage overlaps, the insurance companies coordinate to ensure you do not receive more coverage than the actual expense. It’s important to inform each insurer about the other policies you hold.

Can I use multiple health plans if I have a pre-existing condition?

Yes, you can use multiple health plans even if you have a pre-existing condition. However, coverage specifics and benefits will depend on the terms of each policy.

Do multiple health plans cover the same types of services?

No, each plan may have different coverage levels and exclusions, so reviewing the details of each policy is essential to understand what services are covered.

How should I handle billing with multiple health plans?

Submit your claim to the primary insurer first. Once the primary insurer has processed the claim, submit the remaining balance to the secondary insurer for additional coverage. Be prepared to provide detailed documentation and follow each insurer’s billing procedures.

What are the benefits of double insurance?

The benefits of double insurance are:

Extended Coverage: Double insurance can offer more comprehensive coverage, potentially reducing out-of-pocket costs.
Better Claim Management: If one policy doesn’t cover certain expenses, the second one might ensure better claim handling.
Enhanced Security: Provides an extra layer of financial protection in case of significant medical expenses or emergencies.

Can you have two health insurance?

Yes, it is possible to have two health insurance policies. However, you should ensure that both policies are aware of each other to coordinate benefits and avoid any issues with overlapping coverage.

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Pros and Cons of Having Two or More Health Insurance Plans

Table of Contents

What is Meant by Having Multiple Health Insurance Plans?

Can You Have Multiple Health Insurance Coverage?

How Does Having Multiple Health Insurance Work?

What are the Pros of Having Multiple Health Insurance?

1. Wider Coverage

2. More Effective Premiums

3. Coverage for More Specific Conditions

4. More Efficient Policy Management

5. Protection Against Claim Rejection

6. Further Tax Benefits

What are the Cons of Having Multiple Health Insurance?

1. Extra Expenses

2. Difficulty in Management

3. Duplication

4. Claim Problems

5. Administrative Inconvenience

When Should You Get More Than One Health Insurance Plans?

How to Effectively Use Multiple Health Insurance Plans?

1. Understand Coordination of Benefits (COB)

2. Compare Your Plans to Check Overlaps

3. Use Primary Insurance First

4. Submit Claims to Secondary Insurance

5. Understand Your Coverage Limits

6. Review and Update Your Plans Regularly

Things to Consider for Additional Health Insurance Plans

FAQs about Pros and Cons of Multiple Health Insurance

Is it worth having more than one health plan?

Can you use multiple health policies for a single claim?

Can you be covered under two group plans such as an employee health insurance and a family floater plan?

How is group health insurance different from individual health insurance?

How do I coordinate benefits between multiple health plans?

Can I claim the same expense on both health plans?

Will having multiple health plans lead to higher out-of-pocket costs?

What happens if my multiple insurance plans overlap in coverage?

Can I use multiple health plans if I have a pre-existing condition?

Do multiple health plans cover the same types of services?

How should I handle billing with multiple health plans?

What are the benefits of double insurance?

Can you have two health insurance?

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