Risks while insuring Risks

Today insurance is turning its picture from a noble social security option to a business of Fear.

Instead of how humanity can benefit from this pooling of risks, insurers started looking at how company can benefit. Having this vision has lead them behave in self securing mode in designing products, policy terms and also during claims.

The result of this attitude is – people find risk in securing their risks.

As they are unsure whether the claim will be paid or rejected on some grounds whether reasonable or not. This does not mean, insurer should not look for their solvency. Just that more transparency is needed. Because it’s effecting their business anyways by creating resistance among people.

he following are the risks insureds feel while buying insurance today.

1)     Insurer’s solvency:

Especially while buying life insurance people are very concerned about insurer’s solvency as it’s a very long term insurance compared to other lines.

But such cases the insolvent insurer is taken over by a solvent insurer and the existing insureds are still covered for getting their benefits.

2)     Claim Rejection:

Sometimes the claim is rejected as per the terms and conditions of the policy. There are instances where claims are rejected unreasonably as well. Especially in health insurance, it has been observed that, TPA’s were given a limit for the claims to be settled. This made TPA’s to deal every claim with an attitude of digging on what grounds they can reject the claim. It is ok till finding how it can be rejected, but they also started creating such reasons.

IRDA has created many norms and formed many organizations to deal with grievances of insureds, primarily with an objective of protecting the interest of the insureds.

This has to be conveyed to the insureds when they buy the policy so that they feel secured.

3)     Difficulty in understanding the policy terms:

There are certain terms and conditions which are ought to be included in policy to define that only uncertain risks are covered. The insurers are complicating such terms & conditions unnecessarily to limit their liabilities but still give a broader cover picture. It disappoints the insureds once they go through terms & conditions.

4)     Waiting periods & Exclusions:

If after paying premium, we incur some medical expenses which may fall during waiting period or under exclusions, then we will lose the claim benefit as well as the premium.

This kind of fear is also one of the risks people hesitate to buy insurance.