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Wednesday 7 May 2014

Mediclaim: A healthy investment for you

A recent survey again restated that most middle-aged individuals are concerned about the rising medical expenses and their ability to fund it. The Times of India last week reported that a Nielsen survey of 30,000 people revealed that 54% of those above the age of 45, were worried about not having enough money to cover medical costs and they cited it as their main concern in life. Despite surveys adumbrating the ever increasing healthcare costs and the need for an adequate insurance cover, only a small per cent of the population (around 12%) has some form of health cover in India. What explains the dichotomy?

According to insurance players, individuals continue to subscribe to ancient myths like 'I am healthy and I don't need any insurance cover' and 'insurance premiums are a waste if you don't fall sick and make claims regularly'. Some individuals also have an "extremely negative perception" about health insurance covers and insurance companies, some players add. "Many individuals postpone buying a health cover because they don't see any immediate returns from it.

General insurance covers are not return-based products, unless there is an eventuality there won't be any returns from them. Sadly, many people realise the importance of it only when they or their family members need treatment," says Krishnamoorthy Rao, MD & CEO, Future Generali India. "Many people also continue to believe that insurance companies reject claims arbitrarily, jack up premiums after a claim and so on. It is a perception issue that has got nothing to do with reality. There were many regulatory changes and insurance companies can't arbitrarily decide on these issues," he adds.

Sob Stories Abound

Insurance advisors say they don't have to drum up the importance of health cover to their clients. The problem is the negative perception people have about them, health insurance companies, hospitals and third party administrators (TPAs).

"I don't have to spend much time to educate people about the importance of health insurance cover. They already know it, but the real problem is to deal with their apprehensions regarding claims," says Gopal Jhunjhunwala, an insurance advisor with more than 20 years of experience. He says most people realise the terms and conditions of their policy or changes in them only when they make a claim or about to make one. This leads to disappointments and many sob stories of how health insurance was of no use.

"The dubious practices of hospitals and TPAs are still a cause for concern. Many genuine claims get rejected. That is the main reason for the negative perception," says Prakash Praharaj, founder & chief financial planner, Max Secure Financial Planners.

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