Convalescence Benefit

Convalescence Benefit in Group Health Insurance

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Group health insurance is not just for compensating the employees covered under it for expenses incurred on medical treatments. People often assume that group health insurance benefits are related to medical expenses only. This is a misconception because group medical cover plans can include other benefits that are not directly related to medical treatment but are designed to offset financial losses caused due to a medical emergency.

One such benefit which many people are not aware of is the convalescence benefit. Convalescence refers to the process of recovering from an illness or injury. A person in convalescence is required to rest and is not capable of working. 

Convalescence benefit can be a part of the group health insurance plan. Let’s look at various aspects of this kind of benefit under group health insurance.

What is the convalescence benefit of group health insurance?

Prolonged hospitalization is often required to recover from a serious medical condition or grievous injuries. In other words, the convalescence period is long. During this period, the patient cannot work, leading to a loss of income. Loss of income is a supplementary cost for the patient in addition to hospitalization expenses.

Convalescence benefit under group health insurance provides the hospitalized person with a lump sum amount to compensate for the loss of income during convalescence. The lump-sum amount depends upon the type of group health insurance plan. Prolonged hospitalization is defined as 7-10 days or more in hospital. However, the specific period of hospitalization which qualifies for convalescence benefit depends upon the rules and regulations of the insurer.

What are the features of convalescence benefit?

Convalescence benefit provided by a group health insurance policy pays a pre-defined amount to a covered beneficiary in case he/she is hospitalized for a prolonged period of time. The amount helps the person tiding over the period during which he/she cannot earn an income due to inability to work. 

The lump-sum amount can be a percentage of the sum insured. For example, if the sum insured is Rs 3 lakhs and the lump sum under convalescence benefit is 1% of the sum insured, then the covered person shall get Rs. 3000 in case of prolonged hospitalization. The insurer can also lock in a fixed amount to be paid as a convalescence benefit instead of a percentage of the sum insured. The amount has no relation to the salary of the covered individual.

The insurer can also include compassionate visits by family members under convalescence benefit. This means the conveyance costs of family members of the beneficiary for coming to the hospital to see the insurer also cover the patient.

Convalescence benefit is different from the hospitalization expenses paid by the group health insurance policy. Claim amounts for hospitalization expenses depend upon the hospital bills. On the other hand, a fixed amount is paid as a convalescence benefit to the insured person. The fixed amount is determined beforehand. 

The minimum time period of hospitalization to avail of convalescence benefit is written in the policy document and varies from one insurer to another. Depending upon the insurer, the minimum time period can be 7 days to 15 days. However, most insurers consider 10 days as the minimum requirement to avail of convalescence benefits.

Convalescence benefit is usually offered as an add-on benefit. A basic group health insurance policy, covers major illnesses, hospitalization expenses, ambulance charges, and more. Add-ons are extra benefits that can be opted for by the insured. Thus, convalescence benefit can be added to the base group health insurance policy by paying an additional premium. 

Convalescence benefit is provided over and above the medical costs incurred by the insured person. 

An insured person can avail of convalescence benefit for one prolonged hospitalization period in a policy year.

How does convalescence benefit work?

In order to get an idea about the working of convalescence benefit, here is a suitable example.

Ankur works for an IT company and is covered under his company’s group health insurance policy. This group health insurance policy also provides convalescence benefits for a minimum of 10 days of hospitalization. Ankur suffers a cardiac arrest and is hospitalized. He remains in hospital for 14 days. Thus, he cannot work during this period and loses income. Since the convalescence benefit under the group health insurance policy covering him activates in the event of 10 days of hospitalization, he receives a fixed lump sum amount to compensate for his loss of income during 14 days.

In the above example, Ankur received the lump sum amount under convalescence benefit because he was hospitalized for a time period exceeding the stipulated 10 days in his policy document. 

When to claim convalescence benefit?

First of all, it is necessary to check whether the convalescence benefit is a part of the group health insurance policy or not. Not all group health insurance plans provide convalescence benefits. If convalescence benefit is missing from the base policy, check whether it is available as an add-on. In case it is provided as an add-on benefit, check the terms and conditions and the extra premium amount required to purchase it.

The stipulated number of days of hospitalization to claim convalescence benefit is mentioned in the policy document and must be noted by the policyholder. Convalescence benefit is not applicable if the policyholder is hospitalized for less than the stipulated time period mentioned in the policy document. For example, suppose the minimum time period of hospitalization to avail convalescence benefit under a policy is 10 days and the policyholder gets discharged after spending 6 days in the hospital. In that case, they cannot claim convalescence benefit. 

There cannot be any change in the lump sum amount to be paid as a convalescence benefit. The sum is pre-determined. The amount should be checked on the group health insurance policy document to avoid any confusion at the time of making a claim. 

Conclusion

Convalescence benefit is also called a hidden benefit because most people have no idea about it. A careful reading of the group’s health insurance plan would reveal whether or not it provides convalescence benefits.

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