Choose a policy that needs pre-issuance medical test, say experts

Also avail of annual check-ups; doing so will make claim rejection harder for health insurer

Over a fifth of complaints in consumer courts pertain to the insurance sector. Consumer Affairs Secretary Rohit Kumar Singh told the media recently that he had flagged some issues to the Insurance Regulatory and Development Authority of India (Irdai) and insurers. Until the regulator acts, however, it is up to customers to safeguard themselves.

Ambiguity in insurance contracts

An insurance policy is a legal contract. It may contain jargon that a lay person may not understand.

“In the case of health insurance, for instance, a layperson may find it difficult to understand what falls under the definition of consumables and what doesn’t,” says Naval Goel, chief executive officer (CEO), PolicyX.

The documents can also be long. “There is scope for the regulator to get insurers to further simplify the wordings of policy documents and make them more concise,” says Susheel Tejuja, founder and managing director, Policyboss.

Some experts say ambiguity has reduced over the years. “In the case of health insurance, for instance, the regulator has standardised the definitions,” says Kapil Mehta, co-founder and CEO, SecureNow.

What can you do? Reading the entire document may be difficult. Experts say customers must at least go through the key features page once the policy is issued.

“Since understanding the nuances of a policy is difficult for a lay person, buy from a trusted person,” says Goel. 

Agent doesn’t share full policy document

Purchase phase: While selling the policy, an agent may not reveal all the details of the policy, like its key exclusions.

Instead of buying from an agent, one option is to buy from an online aggregator. “When you buy online, the call is recorded,” says Goel. If you buy from an agent, take his promises in writing.

Before issuing the policy, the insurer’s representative calls the customer to check that the latter has understood the policy’s key features and that the facts provided in the proposal form are correct. Receive that call yourself.

Post-purchase phase: Once the insurer issues the policy, it sends the full policy pack to the customer. This contains the policy wordings. “Customers get a free look period of 15 or 30 days. Go through the policy wordings carefully during this period,” says Mehta.

The pack will also contain a copy of your proposal form. Goel suggests checking that the details you provided the agent have been reproduced faithfully. If not, get changes made immediately.

Repudiation of claims due to pre-existing diseases

Irdai has provided a standardised definition of pre-existing disease (PED). “These are diseases that the person has been diagnosed with within four years prior to buying the policy,” says Mehta.

What can you do? At the time of purchasing the policy, declare all pre-existing diseases, past ailments and surgeries you have undergone transparently. Also declare habits like smoking.

“Even if your agent prompts you not to declare something, don’t pay heed to him,” says Goel.

Mehta says if you have a choice between buying a product that has a medical test versus one that doesn’t, go for the former. “That puts the responsibility on the insurer to identify any health issues at the time of issuing the policy,” says Mehta.

If the insurer offers complimentary health check-ups, avail of them. “This will ensure that the insurer has a record of your vital health stats, thereby making it even harder for it to reject a claim,” says Tejuja.   

The laws put the onus on the insurer to prove non-disclosure. “Insurers generally refer to doctor’s notes and the hospital’s discharge summary to make their case of non-disclosure. If your documentation is watertight, you can disprove that charge,” says Mehta.

How to deal with inflexible policy terms

Issue 1: Policies can’t be customised to suit individual needs: You can’t pick certain covers within a policy and reject others (to save cost)

How to deal with it? 

While you can’t reject coverages, you have the option to enhance coverage by buying riders

Issue 2: At times, policy terms can be unreasonably rigid

How to deal with it?

Present a rational case that is consistent with policy wording to get the insurer to pay up
 

Don’t focus on applying pressure or escalating the matter (the latter tactic won’t work unless you have a good case)