Hassle-Free Health Coverage: Getting Your Claim Paid

Benefits are payable directly to you -- generally, medical insurance policies provide reimbursement for covered expenses. This means your insurance company wants you to pay your medical bills first -- and then it will pay you. Traditional insurance companies would rather not get involved with doctors or hospitals at all.

In the event of your death, the benefits may be paid to your estate.

Whether the benefits go to the estate or to an incapacitated person, the insurance company has the option of paying benefits of up to $1,000 to any relative who appears to be entitled to receive the funds.

Since your health insurance policy is a legal contract, the insurance company is obligated to pay the described benefits for all covered expenses under the policy. If your insurer doesn't live up to it's obligations, you have the right to sue them. However, no legal action may be taken against the company prior to 60 days after proof of loss has been furnished, or more than three years after the date proof of loss is required to be furnished.

For example, you submit proof of loss for hospital bills. The insurance company doesn't deny the claim, but it doesn't pay it either. You get on with your life and four years pass before you realize the insurance company never reimbursed you. At this point, you can't sue the insurance company, because you've forfeited the right of legal action by taking too long.

While your claim is being verified, your insurance company also has the right -- at its own expense, of course -- to require you to submit to a physical examination. But, this typically comes up only in rare cases in which an insurance company suspects fraud.

One common error that can slow down the claims process is a misstated age on your insurance application. If this occurs, any benefits payable will be adjusted to the amount that the premium would have been, if purchased at the correct age.

This item usually governs situations in which older policyholders lie about their age in order to get cheaper premiums.