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Insurence

Each individual has a distinct finger print and distinct thought process and therefore unique choices when it comes to buying a product or service. The definition for insurance is the same but the large number of insurance companies and the variety of policies they offer is the standing proof for the complications it involves. Let me put it this way, buying an insurance is as difficult as a youth selecting a mobile phone for the budget or a women selecting a kanchipuram silk sari.

Selection of insurance is not just about sum assured and policy premium. Knowledge is power, better if you learn before making a mistake. It is impossible for a common man to know all facts about various policies to enable a reasonable comparison. There are many policy holders who regret for their choice when they go through the bitter experience of claims and unpleasant and unexpected increase in the policy premiums. It is seldom possible that the policy holder wins his case against an insurance company. Thanks to the juggleries in policy wordings which can’t be understood by a common man.

In this article an attempt has been made to highlight some of the details which an insurance agent seldom brings up for discussion.

1. The secret of sum assured

It is more common to expect that any claims within the sum assured will be easily dispatched by the insurance company or a TPA. We don’t need to wait for a surprise in the event of a claim in order to realize that the sum assured should not be taken in its literal meaning. There might be caps for individual expenses such as room rents, doctor fees, hospital and nursing charges. Some policies have additional premium to cover ambulance charges. In short you end up in paying some percent of your expenses from your pocket. Take enough time to read the policy features to familiarize yourself with the exclusions which normally includes diseases related to dental, hearing aids, contact lenses, maternity expenses, plastic surgeries etc., Also attention should be given in the definition and limitations of pre-existing diseases. Bear in mind that there should be a minimum number of claim free years in order to cover pre-existing diseases. The timely renewal of premium is critical in obtaining the benefit of availing pre-existing diseases coverage without lapse of policy.

2. Loading on premium after a claim

They always talk about a renewal discount for a claim free year. It is our duty to check about the loads levied on the renewal premiums which is as high as 200%.

Some insurance companies offer an increase in the sum assured (approx 5%) for each claim free year. At the same time there will be a 10% reduction in the acquired sum assured when you go for a claim.

It also matters which disease contributed your claim. In some cases the disease will then be considered as a pre-existing disease and no further claims on the same grounds will be entertained for 3 or 4 more years depending on the terms and conditions of the policy.

The disturbing fact is that there is no direct representation of the above condition in the policy wordings and should be interpreted as how the pre-existing disease has been defined in the policy document.

3. Last renewal age

Most of us go for health insurance early in our life in order to get us secured for our old age. You might get exactly the opposite if you don’t do your home work in selecting the right policy. Most of the policies have a last renewal age of 65 to 75 years. Eventually you will be denied the opportunity to renew your policy despite having number of claim free years. Few insurance companies not limited to Appolo Munich and United India are among those who offer no limitation on renewal age. (Check your specific policy features for details).

4. The insurance company – Public Vs Private sector

Always bear in mind that the policy terms and conditions could be changed anytime without prior notice. There is absolutely no guarantee that the conditions for which you were impressed and opted for the policy should remain the same during the years to come.

Insurance companies who have offered a gold plan have increased their policy premium 4 times than the previous year irrespective of their claim status.

Here comes the commitment of their services keeping their customers concerns more than their business targets. The long term objective of the company for doing sustained business also has its impact on our choice. Those companies who want to make quick money and leave the market will only impact your coverage of pre-existing diseases in the long run.

This puts us in a situation to consider public sector companies rather than the paperless hi-tech online purchase of policies from a private organization. The objective is not to recommend a public company but to exercise caution.

5. Portability Option

Thanks to the newer regulations coming into effect shortly, that gives you the leverage to switch between insurance companies without loosing your privileges of continuing benefits such as inclusion of pre-existing diseases.

I have given the details available. I will try to update the information.