DSIJ Mindshare

Seeking Hassle-Free Insurance

Life InsuranceFacing problems with your insurance company and don’t know what to do? Ensure complete and accurate disclosures from your end and know your rights as a policyholder, says Jay Sampat.

Key Points

  • Premium is charged by the insurance company according to an IRDA-approved premium chart. Before calculating or validating the premium, policyholders should check whether there is a new premium chart.
  • If insurers discover contradicting facts after the issuance of policy contracts, they normally communicate and re-engage with the customer.
  • If the company has specified that the renewal will cease at a particular age, there is nothing you can do about it. However, if there is no explicit mention of this in the policy, renewal cannot be denied.

The circumstance under which an insurance claim is made is usually one of grief. While there isn’t a way to compensate such a loss, a claim cushions the financial fallout on the family. In such a situation, the importance of a swift, easy and hassle-free claims settlement experience cannot be overstated. Of course, hassle free claims aren’t always the norm. Insurance customers mostly accept the decision of the insurers, as most of them believe that fighting a mammoth insurance company is not advisable. However, given that a number of court cases have recently gone in favour of individuals, it certainly pays to know your rights.

For starters, as a policyholder, you must monitor the premium that you are being charged by your insurance company. But how would you know whether you are being overcharged or not? Insurance companies charge premium according to an IRDA-approved premium chart. Typically, the premiums go up on renewal, with the policyholder’s increasing age, previous claims history and any revision in the premium chart. Such premium changes are to be justified and approved by the IRDA. Before calculating or validating the premium, policyholders should check whether there is a new premium chart.

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The three most common reasons for refusal of claims are: (a) Non-disclosure of major ailments by the insured at the proposal stage (b) Non-disclosure of material medical facts such as high levels of diabetes, hypertension, etc. (c) Non-disclosure or improper disclosure regarding existing insurance policies, income, nature of occupation and age at the proposal stage. If insurers discover contradicting facts after the issuance of policy contracts, they normally communicate and re-engage with the customer. Besides, they re-underwrite the case and arrive at an appropriate decision in light of the fresh facts. On rare occasions, if the non-disclosure is very significant, the policy contract could get cancelled. In the final analysis though, these proactive steps help the insured’s family to avoid problems at the time of making claims.

If the insurer refuses a claim, you need to make a written complaint stating the facts. You are entitled to receive a written acknowledgement from the insurer within three working days of the receipt of your complaint. If it is not addressed during this period, the company is supposed to resolve the grievance within two weeks of its receipt and send a final letter of resolution. In the event that you don’t receive a satisfactory response, you can approach the IRDA through their online platform or through the Insurance Ombudsman offices. The final recourse is to approach a Consumer Forum or a court of law. If a representation is made to the IRDA, the insured should not wait endlessly for a reply, as a delay can result in the disqualification of the claim.

Renewal is another area where people face difficulty. If the company has specified that the renewal will cease at a particular age, there is nothing you can do about it. However, if there is no explicit mention of this in the policy, renewal cannot be denied. Moreover, the IRDA has informed companies not to deny renewals simply on account of claims being made in the previous year. Renewal requests are allowed to be turned down only in cases of non-disclosure or misrepresentation of facts by the insured.

While cashless claims are usually settled immediately, delays are observed in case of reimbursement claims. Health insurers insist that you must submit the claim document along with the bills within 14-30 days, depending on their specific policies. Some insurers may also require an intimation of hospitalisation within seven days, though the documents could be submitted later. If your claim is deferred even after following the rule book, you can take up the matter officially with the relevant authorities. The insured can also legally claim interest, if the reimbursement is delayed beyond 30 days after the acceptance of the claim.

In addition to these points, other issues that one should be wary about are the financial limits of a surveyor, the timeframe for processing and settlement of claims, the fact that a second surveyor cannot be appointed by the insurance company and various circulars regarding standardised definitions, premium, etc. If you are buying a medical insurance policy with a term of two years or more, you are entitled to a 15-day trial period during which the policy can be cancelled and the premium reimbursed if it doesn’t fulfil your requirements. Also, the insurer cannot delay the decision on approving or rejecting your application for a cover beyond 15 days of submission.

Insurance is a contract based on the principle of good faith, and underwriting decisions are based on the faith that the disclosures made by the customer are true. Nevertheless, if you are not satisfied with your insurer’s services, you can always switch your policy to another health insurer, while retaining all the benefits of the previous policy.

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