How Cashless Mediclaim Works – Forbes Advisor INDIA

The only reason we buy health insurance is the financial assistance it provides when medical emergencies occur. And after going through a stressful hospitalization, one thing the insured expects is that there will be no hassles in settling hospital bills, and all bills are settled directly between the insurance company and the in-network hospital.

Cashless insurance policy provides the advantage of instant access to health needs without worrying about paying hospital bills and medical expenses. That is why most of the insurance companies have started providing a large number of benefits under cashless medical claim policies.

Read on to understand the meaning of cashless health policy, how it works and how it benefits policyholders in their hour of need.

What do you mean by cashless health insurance?

Simply put, with cashless health insurance, all medical bills are settled directly by the insurance provider, not the insured. The only condition here is that the total medical or hospitalization expenses should not exceed the coverage provided and the hospital selected should be an in-network hospital.

This type of insurance is extremely useful in case of planned or sudden medical emergencies. As with a cashless policy, the insurance company takes care of all the expenses related to hospitalization and treatment costs upfront, thus giving you more time to concentrate on other important matters like arranging treatment or hospital admission formalities.

Key features of cashless health insurance

  • Medical expenses are covered directly by the insurance company.
  • To take advantage of this opportunity, the patient must be admitted to one of the network hospitals.
  • Always keep a copy of all necessary documents such as diagnostic reports, medical bills, discharge summary and claim form.
  • The insurance company pays the medical expenses if they fall within the sum insured limit. Any amount that exceeds the sum insured, the policyholder is liable to pay the excess amount.
  • Expenses above the sub-limits predetermined by the health insurance policy or items not covered by the policy must be settled by the insured.

How does cashless health insurance work?

Health insurance providers partner with various hospitals across the country after researching their quality, reputation, prices and procedure coverage. These are called network hospitals that are vetted by the insurance companies after their extensive background checks.

Cashless insurance is only available at these network hospitals. This way, when you are admitted, you will always have an open option to be admitted to the network hospitals to avail cashless facility. For this purpose, there is an appointed TPA (Third Party Administrator) who is fully responsible for coordinating with the hospital and settling your claims from the insurance company. This TPA is also responsible for approving or denying your cashless insurance claims.

However, the insured may also be treated at a non-network hospital. But in this case, the policy holder has to settle the bills first and then seek reimbursement from the insurance company.

List of leading insurance companies providing cashless health insurance in India

When is a cashless health insurance claim rejected?

Cashless health insurance claim can be rejected due to the following reasons:-

  • If the patient is admitted to an out-of-network hospital that is not affiliated with the insurance company.
  • If the prior authorization claim request is not shared in time.
  • If the medical condition for which cashless claim is applied is not covered or the waiting period has not ended.
  • The claim form or policy document contains incorrect information.
  • If the policy has expired, claims submitted during this period will not be accepted.

Types of Cashless Health Insurance in India

Individual non-cash insurance: A cashless insurance policy covers all the medical expenses of the key policy holder, who in turn can avail the benefits of cashless hospitalization in the most hassle-free manner.

Family cashless insurance: This type of cashless insurance covers the entire family under one premium policy. Here, the cashless benefits can be availed by all the insured family members including the primary policy holder. Since the cover is spread among all the family members, the sum assured is usually higher compared to an individual plan.

Health of senior citizens Insurance: This type of cashless policy provides cashless benefits to senior citizens. Individuals covered under this policy get cashless benefits for expenses like ambulance expenses, hospitalization bills and for much more coverage under the policy.

Benefits of cashless health insurance

Access to rapid treatment: When your cashless health policy is in place, it is very easy to access immediate treatment without worrying about exorbitant hospital bills. You just need to notify the hospital help desk within 24 hours in case of emergency and within 48 hours in case of planned hospitalization.

Comprehensive benefits: Cashless health policy is a very convenient way to use the health policy. One can also avail all the comprehensive benefits from settlement of medical bills to full coverage of ambulance expenses and more.

Benefit from travel coverage: Medical problems can also arise during travel. But if you have your cashless insurance policy, you can easily avail treatment at any of the network hospitals across the country.

Tax Savings: You can also avail tax benefits as the premiums paid for the cashless health insurance policy for families, individuals or senior citizens are exempt from tax under Section 80D of the Income Tax Act.

Factors to consider before opting for cashless health insurance

Network Hospital List: Before choosing a cashless health insurance policy, always check the list of network hospitals with which the insurance company has a tie-up. Hospitals that are close to your locality or nearby will be listed so that you can easily avail cashless treatment during medical emergencies.

Insurance sum: The sum assured of a cashless health insurance policy should be sufficient to cover you and your family during medical emergencies.

Surcharge and other sublimits: Always keep an eye on sub limits and co-pay clauses. The co-payment is that percentage that the policyholder has to bear from the policyholder, not the insurance company.

Waiting period: Remember that any illness or treatment will be provided cashless only when it does not fall within the waiting period. Choose the policy with the shortest waiting period.

Day Care Procedures: Cashless policies also cover a large number of procedures in kindergartens. Make sure you choose the plan that has a huge number of daycare procedures.

Procedure for cashless settlement of claims

To avail medical treatment under a non-cash policy, you need to fill the pre-authorization form, which can be found at your TPA or at the hospital’s insurance desk. The completed form is then submitted to the relevant TPA who further approves or rejects the claim under the following two circumstances:

Planned hospitalization: For a planned hospitalization, you must notify the network hospital within 48 hours of the actual hospitalization. The process involves completing the claim form and submitting it to your TPA in sufficient time. This will be further checked and verified, so do not fill in wrong information. Once approved, the claimed amount will be settled directly by the insurance company and the hospital.

Emergency or sudden hospitalization: In case of emergency hospitalization in the network hospital, the claim formalities should be completed within 24 hours of the actual hospitalization. The entire process is quick once the pre-authorization form is completed by the insured. TPA, in such a situation, try to process the claim request also within the same day.

Inclusions and exclusions of cashless health insurance


  • Costs before and after hospitalization.
  • In patient hospitalization expenses like daily room rent, doctor’s fee, intensive care unit (ICU) charges etc.
  • Ambulance charges.
  • Annual health check-ups.
  • Treatment in day care.
  • AYUSH treatment.


  • Existing diseases.
  • Cosmetic surgery.
  • Self-injury.
  • Treatment of teeth and hearing.
  • Illegal activities such as drugs and alcohol.

Frequently Asked Questions

How to check cashless hospital list while using cashless claims?

You will get a list of network hospitals on the official websites of your insurance provider as well as your TPA. You can also find out about the nearest network hospitals in your locality.

Why should I consider buying a cashless health insurance policy?

What should I look for before buying a cashless health insurance policy?

Can I use cashless services only in network hospitals?

What is a network hospital?

Do I have to pay anything extra to benefit from cashless treatment?

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