Do insurance companies honour their commitments when the payout is high or the illnesses is recurring?

[liquidgass]

My post is of two parts 1st part is my question second part is the reason for my question, because of the experience of some people i know with insurance companies.

1. Do insurance companies really payout huge sums when the situation arises? I have seen comprehensive health insurers pay out 2 to 4lakhs for hospitalizations but what about that critical insurance of 25L has any onebeen paid that when they were diagnosed & fulfilled survivability clause or do companies change goal posts when it happens?
2. what about term cover do any of you know families with 1 crore Term insurance getting their Pay out **Fully** on the insured person demise or are they been given only some of the money and the Claims paid box getsticked off? 3.
3. Reason for the question -Obviously my reasons are based on the small sample size of experience from people i know of hence I know it's heavily biased ,A distant relatives with private Health cover of 10L was diagnosed with cancer it was a 7 yrs old policy so all the illnesses were covered yet the policy did not enter the 8 yrs maritorium clause the health insurer deniedcashless benifit and asked to claim & they did the same but the company had only one intention that was to ask for every single medical test that was taken by the patient in the last 2 yrs and the claim status was marked pending for documents for more than 6 months as the family had to scourge for one blood test to another from one OP priscription to another in the end the company zoomed in on a blood test that was taken 24 months beforediagnosis and pointed out some harmone levels& medical jargon and said**There was a good chance the patient had ongoing cancer when she took thepolicy** although all pre-existing diseases are covered after 4 yrs there is a line saying only declared PED will be covered.Anyways the policy was cancelled by the company. I'm quiet ok with the decision if the person had PED that was not the case she passed away within 1yrsof diagnosis.**The oncologist was furious with the insurers response, he gave a certified letter saying that if the person had PED before taking insurance there was no chance in hell she would have survived for 8 yrs*\* She worked in an car manufacturing unit with heavy physical work there was no chance she could have worked till the day she was admitted if PED was the case.Now I know what some of you are gonna suggest "go to Ombudsman and file a case." They did that, they won the case.Then comes the tricky part the insurance company doesn't give 2hoots about the ombudsmans verdict they never did anything about it, turns out Ombudsman will give the verdict he will not get the money, now the case isin the district court and the family has already paid 50k for the lawyer and not even priliminary hearing has started, lawyer say will take 3 yrs if they don't appeal.All this after the person has passed away and to get 10L spent on treating her. I looked at the policy it had no previous claims 50% bonus sum insuredautomatic top-up air evacuation and all B.S but none of this is of any use ifthe company dosent want to pay you.
4. a friend experienced kidney failure 10 yrs old policy he needed dialysis every 10 days, the insurer made sure they didn't pay cashless even in Network hospital and made him claim and realeased money once in 2 months alwaysasking for the same bill again and again so the family had to bring in 2 L cash due the 2 month rotation, at the end of the year when policy renewal came the renewal was declined, again the same saga go to Insuranceombudsman, I'm not hopeful about it though.
6. Disclosure - Me and my family are fully insured Comprehensive health cover - 30 Lakhs, Term insurance 1 crore, critical illness 35 Lakhs I'm disclosing this to clear any doubts about my belief in being insured.

 

[cherishedlady1969]

@liquidgass This is real issue. Id rather top up company policy to have higher coverage. Nothing beats a call from company executive calling insurance company on your behalf.

 

[liquidgass]

@cherishedlady1969 Read the below comment as my unsolicited opinion .
This doesn't work for self employed/professionals,
Also what happens when you are no longer employed? ,and when one turns 50 or 60 and is financially independent so doesn't work or cannot work,no insurance company will let you in without an hefty premium & you need to wait 8 yrs to get no questions asked coverage, if you are older than 60 you will be forced into 20℅ copayment & all the cholesterol, BP diabetes one will have then would be ring fenced into a 50k limit, god forbid if one gets an angio done with your employer insurance , the policy you take later will not cover anything related to your heart, which is no use...

 

[resjudicata]

@liquidgass

you need to wait 8 yrs to get no questions

Suppose one had a surgery but they didn't tell the insurer while taking policy. Now after 8 years if they need to redo the same surgery, wouldn't this be considered as fraud? Wouldn't the insurer have the welcome call's recordings?

 

[liquidgass]

@resjudicata When i said no questions after 8 yrs, i was seeing protection under the 8 yrs moratorium introduced by IRDA which says if you can't find out a pre existing diseases not declared by the. Patient in 8 yrs then tough luck you need to cover him no matter what.
When this rule was introduced the next year policy premiums were significantly higher to underwrite this risk.
Even with this rule the insurer could still screw you if they find out you hid a diseases by increasing your premium by the maximum allowed value at milestone ages like 40, 45, 50,60 65 & so on this will add up to s lot of money in the end.
Finally they could do what they did in the Original Post illegally cancelling you policy or denying your claim, they will deal with you in court they have lawyers in their payroll paid a monthly salary for this but we need to hire one.

 

[joed]

@liquidgass There are actually 2 ways to justify this and there are ways customers and Companies have used this to benefit them

So, in case of life insurance, 3 years and in case of health insurance, 8 years. Now no one will question the customer whether they have checked the details or not at the time of taking a premium amount or issuing policy.

But this rechecking of policy occurs when claims is of very high value. Let's say 3 Cr or Medical bill of 70 lakh as such. Customer says that we have mentioned all details correctly.

These Health Insurance Companies will check your medical reports, contact the doctor who made those reports, the hospital, and check every file.

Now what the moratorium explains is that,

If the customer is unaware, and the insurance company didn't ask or confirm, the agent didn't ask or confirm and the customer didn't know, then it was insurance companies is at fault and after 3 years, if anything happens, then claim is a must.

Now if Material facts were known but not disclosed, due to any reason, may be falsehood, Company/ agent didn't ask questions or customer lied, and this info was found to be true in writing even after 3 years, claim can be rejected on the ground that Imp material facts that could have changed Policy issuing Decisions were hidden. So claim is rejected. Now the insurance company will make sure to prove this whatsoever. This is not a huge issue in case of term insurance, but in health insurance, this rule helps a lot of health insurance companies to reject claim

This 2nd part is not known to people

 

[resjudicata]

@joed This is what I was thinking. Plus there is a call before issuing policy from the insurer where in they ask all kinds of questions about the details filled in the form. I am sure they will keep this recording saved for 8+ years.

 

[resjudicata]

@liquidgass

moratorium introduced by IRDA which says if you can't find out a pre existing diseases not declared by the. Patient in 8 yrs then tough luck you need to cover him no matter what.

Thanks. Where can one read more about this announcement or this rule in detail by IRDA?

 

[liquidgass]

@resjudicata Download the latest policy document of the policy you have it will be there

 

[amandajd]

@resjudicata This is if you don’t port in those 8 years. If you port - the count gets reset.

 

[liquidgass]

@amandajd In paper the counter dosent get reset but in actual life it does. There are horror stories of people who were enticed with porting their 10 yrs old Govt psu policy to private companies by Telecallers by dangling a ₹2000 SWIGGY gift voucher, & them getting a claim shortly after porting i don't need to tell you they lost 2Lakhs in the pursuit of 2k SWIGGY voucher.

 

[amandajd]

@liquidgass I meant if you port that 8 year thing gets reset. That’s what I meant. So if they ported it was reset.

And Govt policy? What do you mean?

 

[liquidgass]

@amandajd

Govt psu policy

Policy of PSU insurers.

I meant if you port that 8 year thing gets reset.

No as per IRDA rule moratorium is applied 8yrs from the date of 1st policy issue not 8yrs from the date of policy porting should continue.
However it never happens is another matter.

 

[amandajd]

@liquidgass Can you please share the link of the 8 year rule from IRDA site? I was confirmed by both Beshak and Ditto.

Think of it - it makes sense - there was a disease that let’s say Care Insurance ignored or wasn’t informed of and after 7 years in 8th year it was ported to Ergo and then there was a major hospitalisation and it had some history or need to be informed - it just doesn’t make sense that Ergo foots the bill while barely getting any premiums.