Moneylife Events
‘IRDA circular asking insurers not to reject claims mechanically has made little impact on ground’

Insurance industry experts Rohan Dukle and Girish Malik spoke at Moneylife Foundation seminar. Mediclaim and life insurance intricacies of proposal, policy, fine prints, grievance redressal and recent court judgements were discussed.

Insurance companies have started stringently enforcing timelines for hospitalisation intimation and claims filing. IRDA had issued a circular more than two months ago asking insurance companies not to reject claims mechanically just based on violation of timelines. Unfortunately, there is not much impact on the ground as yet by the insurers who were rejecting claims on frivolous reasons.

Moneylife Foundation seminar was conducted by insurance industry experts Rohan Dukle, director, Magus Corporate Advisors Pvt Ltd and Girish Malik, vice-president (Life),  Nandi Insurance Broking. The event was attended by almost 200 people; many had interesting questions.

Mr Dukle, said, “Mediclaim is not one policy fits all. It is common sense, but needs application of mind. Every product has different wordings and customers need to spend time to read the fine print. It is not fill it, shut it and forget it.

Unlike life insurance, which is one-time event, mediclaim has lot of issues and hence needs periodic evaluation to ensure customer needs are covered as well as changes in the insurance company terms and conditions are understood. Buying the policy is not enough.”

Less than 15% of Indians are covered by some form of medical insurance. 40% borrow money or sell assets to cover medical expenses. It is one of three main reasons for impoverishment. Insurance policy is something individuals buy to take care of adverse times. Often, they realize that what they thought was covered in the policy, is not covered. It can lead to policyholder ranting about insurance company or even the government.

Mr Malik said, “Life insurance is long-term contract. The perception of the insurance company in the market, past performance and claims settlement matter a lot. The spread and reach of the insurer as well as availability of intermediary after several years to help file claim is also important.”

Online term plans have gained popularity. The companies are targeting specific segment who is educated, aware of insurance, conscious of own health and can complete the documentation accurately. Only time will tell if the basic premise of such segment of customer having low mortality rates and hence reduced premium holds true or not.

Grievance redressal is important aspect of any insurance policy. For individual customers with claim below Rs20 lakh, insurance ombudsman is the best option. Mumbai ombudsman is reputed to give swift, sensible judgement and even instructing the insurance companies to settle the claims payment within 10-15 days. The only drawback is that it can still take 6-8 months to get justice.

According to Mr Dukle, IRDA has come out with good guidelines on mediclaim portability, which will help customers.” Customers can get credit for the time spent with existing insurer for pre-existing disease waiting period as well as specific ailment waiting period in the policy,” he added.



R Nandy

5 years ago

The way the insurance sector is behaving for private individuals I have second thoughts whether people with decent financial wherewithal should actually buy health insurance,especially senior citizens.Health insurance for younger individuals might be beneficial as they may not have the corpus to take care of the highly unlikely event of getting hospitalized.

But,for senior citizens the chances of  some kind of hospitalization is much higher and is worked out in the much higher premiums.Secondly,there is a high probability of getting the claims rejected.Also they may have the emergency fund to take care of hospitalization.I am not sure what kind of actuarial analysis the insurers are doing but most are at a loss in health insurance.
I have many people advising me to buy Heath insurance though I am covered by my employer now and will be covered at least for the next 30 years,as the premium will be high after I retire.I feel I am better of just keeping money in a mandated balanced fund with nominal contributions so that it can be used as emergency medical fund after retirement,rather than wasting money in premiums for the next 30 years.So,that there is no need of medical insurance after retirement.


Deepak R Khemani

In Reply to R Nandy 5 years ago

It makes great sense to have a fund specifically for the purpose of Hospitalization expenses but to say that you don't need medical cover as you have cover by your employer is not correct. There is no way of knowing whether you will be with the same employer or not or whether your new employer(if you Shift) will provide you with the same medical cover. Health Insurance companies are bleeding from Group Mediclaim given to employees and not from individuals claims. It makes immense sense to have Individual medical cover when you are young and when it is available cheap.
Its just my opinion, Finally it is your call.

Harish Shah

5 years ago

When IRDA has no control on the Insurance Company what is their role to look into the interest of Policy Holders. Only on paper with NO ACTION. Is Finance Ministry aware of hundreds of claim are repudiated. Only an individual Policy holders are harassed while those covered under Group Policy enjoy the maximum benifit at the cost of Individual Insured Person who is made to pay high premium.

PC Chacko

5 years ago

When a person get sick he rushes to hospital His and his relatives firstconcern is to get the patients treated and cured.therefore sometimes they forget to intimate the Insurer with whom therir Medicalaim policies are being taken..If the hospitals admitting such patients should include one colum in their admission card or register to get the name of the Insurer and the Policy No from the relatives of the patient who are attending the patient s and the Hospitals should intimate the Insurer regarding the same
if the patient has not done it .Some doctors and hospitals have a tendency of charging more for the patients who have mediclaim cover and give unnecessary tests etc. to extract more money This should be discouraged.


R Nandy

In Reply to PC Chacko 5 years ago

Thanks for the suggestion.Your comment is well taken.But, I would like to add a few points to ponder regarding buying an extra health cover by employees already covered by
their employer.

(1)It is no doubt based on the industry the person is working and the job security.But,if we take people from the organized
manufacturing sector,IT,finance etc.Most of the employers give adequate health cover either through Group insurance or ESI. Regarding periods of unemployment,it is a risk regarding which each person has to take his call.But,I think periods of unemployment will be very small for a person below 60 compared to periods of employment.In my case I have been unemployed for 4 days in my previous employment of 9 years while changing a job. I am assuming I will be at a max unemployed for 1 year at different times
in my future employment of 30+ years.So,if I buy a heath cover for the next 30 years I will be paying a premium for 30 years of cover whereas I will actually need a cover of 1 year.In fact I can cover the risk myself
during this short period of unemployment by taking a loan or from my emergency
savings.This seems to be a nobrainer for me.Paying 30 years of premium
for 1 year of cover just doesn't make sense.Or am I missing something?

(2) Do people in the US(considering that they are ahead of India in the maturity of the finance and insurance industry) take double cover even though they are covered by their employer. The answer is NO.Of course they have portability from group cover to individual cover to take care of preexisting illnesses.

(3)Insurance can be bought as and when required.Medical insurance can also be bought when the person decides to be self employed.I have done my calculation in this regarding considering the the premium payable with age including diseases
like diabetes.It works out cheaper even after buying insurance at a late age rather than buy
unnecessary cover at an earlier age with lower premium. This also includes life insurance.I can share my calculations for life insurance,in case you want to see it.

R Nandy

In Reply to vivek p 5 years ago

Probability of hospitalisation in the next 30 years against which the insurer charges you premium,P(hospitalisation)=x/30,I am assuming you will be hospitalized x number of times in the next 30 years

.Probability of unemployment in the next 30 years assuming 1 year of unemployment in the next 30 year period,P(unemployment)=1/30
P(hospitalisation while being unemployed)=P(unemployment)*P(hospitalisation)=x/900
You are paying the premium for P(hospitalisation)=x/30 which is a much higher probable event to actually cover P(hospitalisation while being unemployed) =x/900,which is an extremely low probable event.So,in other words the probability is lower by a factor of 30 in this, the premium should also be lower by a factor of 30. I will take a cover if some insurer gives me at a premium of Rs 6000/30 per year for a coverage of 3 lacs to give me medical cover while being unemployed.

If we just understand the principle of insurance as sharing risk with others in the pool.That condition is not satisfied. As we are looking for a cover forP(hospitalisation while being unemployed) while others are looking for a cover for P(hospitalisation).You are essentially subsidizing for others hospitalisation.You in fact can just assume the risk yourself and save loads of money.

Coming to your question,a simple contribution of Rs 6000 per year increasing at the rate of 8%(inflation rate) per year with a real return of 2% in a balanced mutual fund will give you around 300000 after 30 years in today value.this can be used for medical cover,there is no need of medical insurance premium payment after retirement.

Deepak R Khemani

In Reply to PC Chacko 5 years ago

What you are suggesting is ideally what should happen. The Insurance company mindset now is to reject the claim under any possible fine print or under the intimation delay or submission delay
The hospitals are not going to do it for you . It is very important that the insured and the intermediary are in good contact so that all this follow up can happen for the claim to get processed.
Regarding the hospitals overcharging patients having Mediclaim that is the issue which has resulted in Insurance Cos tightening their belts to avoid fleecing by hospitals and reduce fraudulent claims!

Downtrend may continue, if this week’s low breaks: Weekly Market Report

Nifty may go down to 4,785, if the downtrend continues

Confirming to various analysts’ projections of a lower growth in the current fiscal, the government on Friday asserted that GDP growth in 2011-12 would be 7.5%. Concerns about the slowdown and the continuing debt problems in Europe led the market 4% lower in the holiday-shortened week.

The government’s flip-flop over FDI in multi-brand retail led the market down on Monday. Opening after a day’s break, the market closed with minor gains on Wednesday as lifting of the nine-day logjam in Parliament boosted investor sentiment. Despite the weekly inflation coming in at a 39-month low, the benchmarks settled with deep cuts on Thursday as investors were concerned about the stability of the government at the Centre. The spectre of lower growth in the current fiscal and weak global cues pulled the market down on Friday.

The Sensex finished the week 633 points lower at 16,213 and the Nifty settled at 4,867, down 183 points.  If the Nifty goes below 4,840, we may see it reaching the level of 4,785. However, if Nifty manages to keep itself above 4,920, we may see some change in the trend.

While the BSE IT index settled flat, all others ended in the negative led by BSE Capital Goods and BSE Realty (down 5%) each).

Wipro (up 2%) was the lone gainer in the 30-share Sensex. The top losers were Bharti Airtel (down 8%), Sterlite Industries, ICICI Bank, Reliance Industries (down 7% each) and BHEL (down 6%).

The major gainers on the Nifty were Wipro (up 3%), Punjab National Bank and Infosys (up 1% each). The key losers were Sesa Goa, Bharti Airtel (down 8% each), Sterlite Ind, ICICI Bank and Reliance Industries (down 7% each).

Food inflation fell sharply to 6.60% for the week ended 26th November, down from 8% in the previous week ended 19th November. Food inflation has shown a declining trend over the last seven weeks, giving some relief to policymakers that prices would reach more comfortable levels towards the year-end.

The government, in its Mid-Year Analysis 2011-12, lowered the gross domestic product (GDP) forecast for the current fiscal to 7.5% from 9%, but exuded confidence of a revival in the next year. The analysis further said that the overall inflation is likely to decline from this month and moderate to 7% by March-end.

Growth in India’s exports plummeted to 4.2% year-on-year as the shipments aggregated $22.3 billion in November in the wake of difficult global situation, while imports were up 29.1% to $35.9 billion. Since slowdown in growth has set in because of factors like Eurozone crisis, commerce secretary Rahul Khullar on Friday said that the total exports for the current fiscal would be in the range of $280 billion, down from the earlier projection of $300 billion.

The nine-day deadlock in Parliament over the government’s decision to allow foreign direct investment (FDI) in multi-brand retail ended on Wednesday after an all-party meeting passed a resolution to suspend the move till consensus is reached. Last month the Cabinet had approved allowing 51% FDI in multi-brand retail as well as 100% FDI in single-brand retail.

In international news, Europe secured an historic agreement to draft a new treaty for greater economic integration in the Eurozone on Friday. However, Britain refused to join the other 26 countries in a fiscal union. Under the new treaty plan, the leaders agreed to implement a tougher budget discipline regime with automatic sanctions for deficit defaulters in the single currency area.

Global markets will now turn their focus on the US, where the Federal Reserve is slated to meet on Tuesday. While no major decision is expected, key economic indicators would be keenly watched.


A temporary bottom during mid-week could produce another bounce.

The sharp decline which started towards the end of the week is likely to culminate around the 14th-15th December after which another bounce could take place. However, the strength of this bounce will depend upon how deep we go in the current decline

S&P Nifty close: 4866.70

Market Trend

Short Term: Down        Medium Term: Down            Long Term: Down

The Nifty opened flat this week and recovered marginally thereafter. However, after failing to hold on to the on to the gains the index slipped sharply in the last two days of trade to close 184 points (-3.63%) in the red. 
The weekly histogram MACD remains below the median line confirming that the bears are in control. The bulls staged a smart comeback but the volumes during the rise were poor, raising doubts as to its sustainability. This resulted in last week’s decline, which too has been on low volumes, implying that we might move sideways in the next couple of weeks.

Here are some key levels to watch out for this week.  

  •  As long as the S&P Nifty stays below 4,936 points (pivot) the bears will have an edge as the trend remains down.
  •  Support levels in declines are pegged at 4,773 and 4,678 points.
  • Resistance levels on the upside are pegged at 5,030 and 5,193 points.

Some Observations
The bulls have staged a smart comeback but they have to ensure that they do not lose too much ground in the weeks ahead to keep their hopes alive.
1.    Resistance in rallies is pegged at 5,109 points (almost hit) and 5,263 points (61.8% and 78.6% retracement levels of the fall from 5,399-4,639 points.
2.    The volumes in last week’s decline have been poor implying that there is a lack of strength in the fall.
3.    The bounce till 1st to 5th December materialized as expected and one saw a sharp correction in the last couple of days.
4.    The Nifty has closed the “upside gap” area in the last decline raising doubts as regards to the sustainability of the corrective rise from 4,639 points.

One saw a sharp decline during the last couple of days of the week. A culmination of this is likely during the course of this week around the 14th to 15th December from where we could see another bounce taking place. However, the strength of this bounce will depend upon how deep we go in the current decline. It will be a swinging market providing opportunities to the bulls as well as the bears depending upon who is more adept and nimble footed. Look for a small buy opportunity around the above mentioned time frame.
(Vidur Pendharkar works as a consultant technical analyst & chief strategist,


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