Raj Pradhan discussed six problems that policyholders face and gave tips to overcome these problems. He also informed citizens of the Foundation’s free Insurance Helpline and how to use it effectively for solving frequently observed problems, to a packed hall in Moneylife Foundation’s 177th seminar
Buying life insurance as an investment tool may lead to poor returns and a lot of grief. Often savers don’t do the correct analysis and fall for the pitch of insurers. This includes senior 
citizens. Then there are other cases where fraudulent selling is involved with inducements such as offers of “interest-free loans”, gold coins, mobile tower rent or sharing the rewards of a contest. In such cases, the victims’ downfall is precipitated due to greed. These are some of the real-life cases we go to know from Moneylife Foundation's Insurance Helpline. The Helpline has received a huge response and offered us insights into the most common problems that people face with their life and health insurance. In a unique event, Moneylife Foundation’s Raj Pradhan shared the insights from the Helpline with the Foundation members.
Mr Pradhan pointed out that it is not always easy to prove mis-selling and hence making the insurance company refund your premium is not easy. But, Moneylife Foundation Insurance Helpline has successfully done it for 17 policyholders for amounts ranging from Rs20,000 to Rs4 lakh.
The Helpline came across several cases of senior citizens falling victim while buying life insurance? Why do they buy life insurance at an advanced age? You do not need any life insurance after retirement and hence please stay away from all life insurance products. In one case we are pursuing, the senior had bought a child plan! Many people used the Helpline cases to ask about surrendering a policy. Moneylife does not recommend blindly surrendering one’s insurance policy. It may be a second blunder after buying a wrong policy. Read Moneylife cover story for more information - Life Insurance: Surrendering policy? Think again
After discussing life insurance, Mr Pradhan went on to discussing health insurance or Mediclaim. These pose more complex problems. Policies differ in their wordings on room rent limit. Some will prorate the hospital bill if you entail higher room rent service. But others may prorate even though the policy requires that the charges be limited to the charges applicable to the entitled room category. If you are aware of it, you can fight for your rights.
Another problem for policyholders, explained Mr Pradhan is that Third-Party Administrators/insurers make a mockery of preferred provider network (PPN) rates. For standard procedures, the network hospital and TPA/insurer should have agreed rates and there is no reason for the insured to pay from pocket. Yet, there are numerous cases of hospital bill much higher than TPA/insurer approved rates. Mr Pradhan advised that it is in your interest to find the hospital rates in advance and know the TPA/insurer rates in case of pre-planned surgeries. That way you will be protected from the farce of PPN rates as hospitals on network do not necessarily mean that rates are sacrosanct. The event ended with a lively discussion question answer session by the audience.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
Never ever take insurance as investment ever.And never ever hire wealth management companies ever in India.Learn yrself.
You mentioned in your presentation that making the policy paid up is a better option rather than surrender or lapse. Could you please elaborate on the procedure/steps we need to take to do this as my agent is unaware of this option.
Need better public addressing system though.
I think there were many insurance agents attending the seminar, and were not in agreement with Mr. Pradhan and were creating a racket behind. Moneylife, must be careful of who attends the seminars...
Best wishes to Mr. Pradhan, keep the good job up and to Money life...
Jagdish Bramta
The only redeeming feature is insurance acts as a shield in the face of adversities, albeit, fig leaf. We believe the cover helps. We go on paying premia through our noses and when it comes to lodging claims every genuine claim is fraught with rejections, disallowance and reductions while professional false claim lodgers get away with hefty cheques with blue murder!