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Health insurance can help free the current cash reserves for investment

LiveMint logoLiveMint 13-08-2017 Abhishek Bondia

My father is 68. He has invested in fixed deposits, National Savings Certificates, etc, but never in mutual funds and has Rs6 lakh in savings account. His health insurance is covered by my and my brother’s company insurance, but he does not have any term or life insurance. He does not have any loans to repay, but has committed some money to his ancestral home. Does he need to buy health insurance?

—Abhishek Gupta

Yes, he should buy a health insurance plan. He should look for a sum assured of Rs10 lakh or more. A health insurance plan would help free-up the current cash reserves for investment or consumption. Also, a high sum assured would ensure that in case of a major illness, the strain on accumulated wealth is limited. Since your father is covered under two company-provided group health insurance plans, you may consider a health plan with a deductible. This would help you reduce the premium.

My mother-in-law had a joint mediclaim with my brother-in-law and his family from Bank of Maharashtra. It was a floater policy with sum insured of Rs5 lakh. We missed a premium payment last year and the policy lapsed. The bank now says that a new policy will have to be issued for my mother-in-law separately, as they don’t issue policies after the age of 65. My mother-in-law is now 70 years old. I have approached few agents but due to her age the premium amount is very high, up to Rs60,000 for Rs10 lakh sum insured. Health wise she is good, no blood pressure or diabetics. She has had knee surgeries. Please advise a mediclaim with less premium.

—Deepali Shah

At older ages, health insurance premiums increase due to higher expected claims. Also, insurers may hesitate to issue a cover if the person has undergone a serious medical procedure in the past or if there is a family history of specific ailments. You could consider two options for a cost-effective cover.

First, exclusive senior citizen health insurance plans. Such plans are cheaper than the generic health insurance plans. However, they typically have some benefit reduction such as co-pays or disease-wise limits.

The second option is to buy a top-up health insurance plan. Such plans have a deductible amount. Claims up to the deductible amount are to be borne by the insured. Medical expenses above the deductible get covered under the top-up plan. This insurance is very effective for ailments that are expensive, such as cancer. However, the cost of regular treatments may have to be borne by you.

I had purchased a health insurance policy on 4 July and underwent the medical tests as needed. I got a call from the insurer on 14 July about incomplete tests. When I called the agent, he said they had the reports and will get back in 3 working days. They also said that nothing was required from me. I did not get any call or email from the insurer after that. On 28 July, I get a policy-rejection email stating that tests were incomplete. When I call customer care on 29 July, I am told that policy has not been rejected, it is still in progress and that they will call back. Again nobody called.

When I called again 10 hours later the same day, I was told that policy has been rejected because I did not get the tests done. The agent also told me that they had no alternate numbers on file (which I had provided).

When I called the customer care again, I was told the issue would be resolved by Monday and I would get an email to confirm this discussion. Again, no communication from the insurer.

I want to know:

1. As a customer am I supposed to follow up with the testing agency to share the reports with the insurer?

2. Why did insurer not inform me anytime during the last 2 weeks that something was pending?

3. Why does a customer need to follow-up, instead of it being the other way around?

—Tanmay Agarwal

This seems like a case of poor customer service. The standard process is for the insurer to collect the test reports from the laboratory. In some cases, insurers clearly specify that the medical reports are to be submitted by the insured directly to the insurer. If it is not specifically mentioned by the insurer, then correspondence is expected to happen between the laboratory and the insurer.

Often such issues can be resolved by reaching out to a senior executive of the insurer. I recommend that you reach out to a senior person in the underwriting department of the insurer. You should mention the above details, along with the evidence of tests conducted. If the premium has been refunded to you, it is possible to make a fresh payment to apply for a new policy. Medical tests are typically valid for a few months.

Abhishek Bondia is principal officer and managing director, SecureNow.in

Queries and views at mintmoney@livemint.com

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