Are you satisfied with your health insurance policy

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I. YOUR HEALTH INSURANCE POLICY? Are you Satisfied? (Source - The Economic Times)


One of two policyholders is not happy with his health plan. High renewal premiums and partial claim settlements are major worries. Here’s what you can do about it.


Health Insurance buyers are not a happy lot. It is observed that almost half the health insurance buyers (48%) are not satisfied with the features and benefits of their policies. The dissatisfaction levels are higher in the higher age groups those aged 65 and above have the highest number of dissatisfied policyholders — 67%. Similarly, when it comes to claim settlement experience, almost 70% of those in the 60-64 age bracket are dissatisfied.


The following findings show widespread discontent among policyholders and the suggested ways to handle better customer issues.


High dissatisfaction


At 48%, the number of people dissatisfied with their policies is too large to be ignored by insurers. The higher the age group, the larger the number of dissatisfied people. This is troubling because older people are likely to use their health policies more frequently. Those who spent time on ascertaining their insurer’s reputation before buying the policy were better off compared to those who relied on their agent’s recommendation or bought a policy based on lower premium.


Dissatisfaction levels rise with age


Not surprisingly, dissatisfaction level amongst older age groups is much higher. These age-groups bear the brunt of renewal premium hikes as well as restrictions like co-pay and disease-wise capping.


Scrutinising a policy properly, instead of leaving it to intermediaries or blindly signing documents will save you a world of trouble in the long term. Buying a policy should not be a hurried exercise in order to claim Section 80D tax benefits. The kind of policy you buy has long term implications for you and your family. Insurers say they are doing their bit to help people make an informed choice.


Besides the policy schedule and its terms and conditions, the policy kit includes a customer information sheet. It lists the key sections of the policy. A welcome calling process for new customers to explain the key benefits, features and terms and conditions is also put in place now.


On a 0-5 scale, how satisfied are you with your insurer?


Two out of three respondents have rated their insurance company average or below average—three or less. Just about 10% are totally happy with their insurers.


Do not treat these processes as mere formalities that you need to get done with, even if your intermediary says so. The insurance industry also offers the free-look period. The customer can cancel the policy if he/she is not satisfied with any aspect of the policy with full refund of premium during this period. A timely check after you receive all policy documents will ensure that you do not end up with an unsuitable cover.


Higher renewal premiums


Steep hikes in renewal premium topped the list of policyholder’s complaints. Hike in renewal premiums is a reality. It is linked to inflation as is the case with any other product or service. With increasing cost of healthcare in the country, the premium rates also need to be revised periodically to offset the inflation.


On their part, policyholders should not look to buy policies at an advanced age when there is a greater likelihood of them falling sick. Once the youngsters start viewing the health insurance policy as a risk cover, and purchasing it at a young age, there would not be such a steep hike in premiums that is unfortunately seen now.


Bought policy based on agent’s advice


Less than 40% of those who heeded an agent’s advice to purchase the policy are satisfied with their policie’s features. Be careful, intermediaries may be guided by commissions rather than your requirements.


  • Not satisfied: 61.4%

  • Satisfied: 36.8%

Bought policy based on insurer reputation


More people who bought policies based on the insurer’s reputation are satisfied, compared to those who went by agent’s advice.


  • Not satisfied: 42.1%

  • Satisfied: 57.9%

Claim settlement experience of those who bought policy based on cashless facility


While cashless hospitalisation is a much sought after facility, it has not made the claim process any better for most respondents.


  • Not satisfied: 58.3%

  • Satisfied: 41.7%

Bought policy based on low premium


Being thrifty did not work out well for a majority of the respondents. A cheaper policy may be lighter on the pocket, but it may also fail to meet your expectations.


  • Not satisfied: 57.3%

  • Satisfied: 42.7%

Claim settlement experience of those who bought policy based on insurer’s reputation


A majority of the people who bought their policies based on the insurer’s reputation have had unsatisfactory claim settlement experiences.


  • Not satisfied: 55.8%

  • Satisfied: 44.2%

Renewal premiums also go up as you grow older. When you buy a health insurance policy, it needs to be renewed for the lifetime, although it is an annual contract. Therefore, it makes sense to think ahead while comparing policies at the purchase stage. It is very important to check the next 10 year’s premium–two five-year age slabs. If the policyholder is buying the plan at the age of 35, then she should look up the insurer’s premium chart up to the age of 45 or 46.


Poor claim settlements


It is observed that almost 60% of the people who filed claims were dissatisfied with their experience. Almost 65% of the unhappy respondents blame it to partial claim settlement due to various exclusions. About 42% said they were unhappy because of the delay in processing of claims.


Not satisfied with claim settlement process


Dis-satisfaction is relatively lower in the 65 and above age bracket. This could be because the people in this age group are better aware of the various policy exclusions and restrictions.


Why people are dissatisfied with their claim settlement process


Partial claim settlement has been policyholder’s top grievance. Insurers need to improve their communication and policy buyers need to understand their policie’s terms and conditions to avoid disappointment


Reasons for claim rejection, partial settlements


An overwhelming number of claims have been rejected because they fell in the exclusions category. This again stresses the need for better communication and greater awareness.


Key concerns of policyholders


Not surprisingly, steep hikes in renewal premiums are most policyholder’s chief concern. Insurers need to make reasonable premium revisions. If possible, policyholders should avoid policies with restrictions, suggest experts.


Option to port policies


Health insurance policyholders are allowed to switch insurers and port their policies, if they are dissatisfied with their existing insurers. They do not lose continuity benefits of pre-existing diseases (PED) cover, if they port their policy. The IRDAI introduced health insurance portability in 2011.


However, 27.12% of the respondents were not aware of this feature. Policyholders can also approach the insurance ombudsman for grievance redressal.


Not satisfied, but did not switch insurers


Despite IRDAI allowing health insurance portability since 2011, 41% of respondents either did not know about its existence or were not clear about the process to be followed.


What policyholders want


New age insurers in particular present health and wellness benefits as a carrot to attract healthy and health conscious individuals. While such benefits can be useful, unambiguous terms and conditions and restrictions is what policyholders really ask for.


What makes an ideal health insurance policy?


The priority for most policy buyers is not extra features OPD benefits, no room rent caps, etc. but simple and lucid communication of restrictions and exclusions in a policy.


Health insurance regulations allow insurers to reward policyholders for early entry, continued renewals and favourable claims experience. IRDAI’s proposed standard product construct also provides for incentivising early entry.


Hope you enjoyed reading this edition.


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