Why are Policyholders Dissatisfied with the Insurance Companies?
Health Insurance is not an unknown term. Everyone is aware of its benefits and features that it safeguards against during medical emergencies and saves your hard-earned money from getting drained in medical expenses.
The concept of health insurance might have acquired a great deal of demand because of the COVID-19 pandemic in the course of the last 18 months, yet it remains a minefield of perplexing provisions for some policyholders. People still prefer not to invest in health insurance plans for several reasons, one of which is not satisfied with the insurance providers. Council of Insurance Ombudsman has recently released its yearly report 2020-21, which has uncovered a few purposes behind policyholder’s complaints and dissatisfaction, along with some additional remedial activities that insurance providers need to take.
Therefore, let’s understand the reason for this disappointment with the insurance companies.
Complicated Provisions Prompting Disagreements
The policy wordings in the policy documents are usually complicated, due to which people often avoid buying insurance policies. And simplifying those wordings has been on the Insurance Regulatory and Development Authority of India’s (IRDAI) plan for quite a while presently, as the insurance policies’ documents keep on being filled with complex clauses. The Council of Insurance Ombudsman report states clauses like sum insured enhancement, proportionate deduction, an active line of treatment, and customary and reasonable require a re-look or clear understanding.
These provisions lead to many problems as they generally lead to partial claim settlements. For example, in the case of proportionate deduction, whole charges are linked to the room charges. So, if you opt for an expensive room, other expenses like doctors’ fees, operation charges, etc., will go up proportionately. And in case you are not qualified for such a room because of sub-limits in your policy, then the entire claim amount will decrease as needed. This is a provision that numerous policyholders frequently don’t comprehend, resulting in disagreements in the later stage.
Change in policy terms during renewal
Several times policyholders receive renewal notices out of nowhere with changes in clauses and features. Indeed, their policies are withdrawn and simply surprised with a new policy overall. Especially in the case of senior citizens, they do not have any options but to accept the new terms and conditions as buying another insurance policy will be quite difficult due to their age and various other reasons. While the ombudsman report doesn’t have a solution for this problem, it has suggested that meaningful changes should be highlighted in the renewal notices and on the first page of the policy document.
Rejection of claim due to delayed intimation
The IRDAI has requested that insurance providers not to deny claims just on the grounds of delayed intimation. IRDAI stands that the time period given for submitting documents should not be the reason for hindrance in the process of genuine claim settlement cases. However, the Council of Insurance Ombudsman report featured this problem and encouraged insurance providers to stick to the rule rigorously. It additionally suggested clear rules and consistent execution of this rule by the insurance companies.
Dependency on TPAs for decision-making purposes
The health insurance regulations 2016 by IRDAI clarify that the insurance provider and not the third-party administrator should be making the final decision. However, the insurance ombudsman has brought up that most of the general insurance providers do not have any settled framework for surveying the cases dismissed by TPAs. In any event, when the complainant approaches the insurance company’s complaint cell after claim renouncement by the TPA, the insurance provider only sometimes looks at the case impartially. Sometimes, the insurer relies upon the TPA to introduce the cases before the ombudsman.
Helpless complaint redressal mechanism
One more service inadequacy hailed by the insurance ombudsman report is the lack of personalized responses for the policyholders’ grievances. The report brings up similar generalized letters by all the concerned departments without appropriately tending to the complaints raised by the clients/complainants. Insurance providers are turning out to be more mindful with regards to their business positioning on the lookout and least fretted over their positioning (as far as) number of objections enrolled against them, the report further confirms.
All these reasons make policyholders dissatisfied with the insurance company’s service or behavior. The insurance providers need to pay heed to all these concern areas and try to bring up solutions by providing easy and hassle-free assistance to the policy buyers at every step. The policy buyers also carefully look through the policy wordings or guidelines to avoid problems at later stages. If they do not understand any clause or guidelines, they need to immediately contact insurance experts or the insurers themselves and get things cleared out at first instance. If you are also looking for guidance from insurance experts, you can straight away head to iiflinsurance.com and clear out all your inquiries.