Concerns on High claim rejection ratios of Insurance Companies

We have received queries about what to do with insurance policies of Companies having high claim rejection ratios. We do not have any control over what the companies will do in future. But we suggest you the follow some dos’ and don’ts;

Second opinion on Insurance Policies

You may take second opinion on all your insurance policies from a professional Financial Planner who will provide his/her opinion in writing about the suitability of the policies to your needs.It may cover aspects of adequacy of cover,cashflow,return and tax exemptions.

Disclose all material facts at the time of taking a policy

Claims are rejected mainly because of non disclosure of material facts about the condition of health at the time of taking the policy. Even if some health related problem are there it is advisable to disclose it and pay a little higher premium rather than not disclosing it and facing rejection of claims later.

Do not forget to take  health insurance

Buy indemnity health insurance policy as soon as possible. If you want higher cover then prefer for a super top up policy which will be cheaper.

Do not combine insurance and investments

The mistake we do is to buy insurance products for investments. As a result we neither get best of insurance nor investment. Take insurance for protection only and for investments invest in products that matches best your risk appetite,time horizon and goals.

Diversify investments

“Do not put all eggs in one basket” is the mantra by Warren Buffet. Spread your investments in all asset classes i.e real estate, equity, debt, Gold and of course invest in business. The principles to be kept in mind for investment are safety, liquidity, growth and Tax saving.

 Go to a Doctor first and not to medicine shop

When we are sick, Do we go directly to the medicine shop to buy the medicine? ; Rather we go to the Doctor first to get diagnosed and then we buy medicine based on the Doctor’s prescription. Similarly you should  follow similar principle in buying of Financial Products; Go to a financial doctor first and thereafter go to a product distributor to buy the suitable product.

 How to get a good financial doctor?

There are many advisers in the market but very few are unbiased since they get their commission from the Company whose product they push to sell. So the first criteria are to find an adviser who does not sell any product. The second criteria is  to look for a professionally qualified personal finance  expert which is also a Certified Financial Planner .The third criteria is knowledge and experience in all areas of personal finance i.e Investments, Insurance, Taxation, Estate Planning etc. The fourth and most important criteria are SEBI registration for giving financial advice so that in case of any problem you can register your complain with SEBI.

 

Last modified on Wednesday, 10 February 2016 06:57

Prakash Praharaj

Shri Prakash Praharaj has a passion for excellence. He has been awarded two gold medals for securing top positions both in Graduation and Post Graduation in Commerce. He is an MBA with specialization in Finance and marketing. He has been awarded Diploma in Treasury, Investment and Risk Management besides CAIIB from the Indian Institute of Bankers. He is a Certified Financial Planner from the Financial Planning standards Board, India (FPSB), affiliated to FPSB, Denver, USA and Certified Personal Financial Adviser from NISM. He is also a SEBI registered Investment Adviser vide Reg. no. INA 000000045 dated 2nd August 2013.His book "Your Every day guide to Personal Finance and Insurance" has been published by CNBC TV 18 in August 2015.

4 comments

  • Sujata Aniruddha Sapkal

    posted by Sujata Aniruddha Sapkal

    Wednesday, 26 August 2015 11:17

    After a painful event in a family it is horrifying if one is not able get the rightful insurance proceedings....it is advisable to choose best suited insurance product with the help of a professional.

    Report
  • suvra

    posted by suvra

    Friday, 17 January 2014 07:19

    A very useful article

    Report
  • mamata

    posted by mamata

    Friday, 17 January 2014 07:15

    everyone should know all these information

    Report
  • Satya

    posted by Satya

    Monday, 13 January 2014 09:10

    Helpful insight

    Report

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