A clear understanding of insurance coverage details is essential and critical for customers to enjoy the full extent of their protection. What follows is an example that illustrates why customers should take note of the details of benefit cover before upgrading their medical insurance plan.

4 years ago, Mr. Chen took out a medical and hospitalisation insurance plan with a maximum benefits limit of HK$100,000 per year. Unfortunately, Mr. Chen felt chest pains one day and was admitted to hospital where he was diagnosed with coronary heart disease. Some time later, upon renewal of his policy, Mr. Chen upgraded his existing plan to an upper benefit limit of HK$500,000 in order to enjoy better protection.

Two months following policy renewal, Mr. Chen was again admitted to hospital with chest pains. Percutaneous Transluminal Coronary Angioplasty was done and a hospital bill of around HK$350,000 was incurred. After discharge, when Mr. Chen submitted his claim for hospital expenses, he was told by his insurer that his maximum benefit limit was HK$100,000 instead of his upgraded plan limit of HK$500,000.

Because Mr. Chen had been diagnosed with coronary heart disease prior to his policy renewal and upgrade, his coronary heart disease was classified as a pre-existing condition in the upgraded plan. Since the pre-existing illness was excluded from the upgraded cover, the increased benefit limit of HK$500,000 was not applicable to Mr. Chen’s pre-existing condition of coronary heart disease. Accordingly, the insurance company calculated his claim for coronary heart disease based on his maximum benefit limit that was in effect before he upgraded his plan. However, Mr. Chen’s upgraded benefits will be applied to any insured illness that first occurs after his policy upgrade.

In view of the above case, it is recommended that customers should take out a medical insurance policy with a higher benefit level earlier in life in order to ensure that they have enough coverage in their retirement stage.

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