A senior executive with a national association of insurance brokers—those who sell insurance—has claimed that health insurers are avoiding issuing policies to people who are over 50 years old.
“Since January 2007, these companies have been given the flexibility of charging a higher premium from people who have a higher chance of falling sick or are prone to diseases. But to control escalating losses, insurance companies are now turning down applications of people above 50 years of age,” said S.K. Sethi, vice-president of Insurance Brokers Association of India.
Insurance firms, however, deny the charge.
Policy makers: C.S. Rao, Irda chairman, says no complaints to the effect have been registered so far, but firms within their right to deny cover.
“We recently launched a product for senior citizens, who are up to 80 years old. There is no question of denying cover to people above 50 years of age,” said a senior manager at New India Assurance, who, citing company policy, requested that he not be identified.
“The company never rejects an application on the basis of an age limit. But it can be denied on the basis of medical tests if any reports are negative,” said Karan Chopra, national manager at ICICI Lombard General Insurance Ltd.
India’s insurance regulator, Insurance Regulatory and Development Authority (Irda), said it has not received any complaints from individuals regarding policies being turned down on account of their age, but its chief regulator said insurance firms were well within their rights to refuse policies.
“So far, no complaint has come to us on this front. Since old age groups have higher chances of falling sick, health insurance companies can deny the policy, as it’s simply a contract between an insurance company and an insured (person),” said Irda chairman C.S. Rao.
Sethi, however, insisted that insurance firms are against selling health insurance to people over 50 years and that they were refusing to pay commission to agents who had sold policies to such customers.
Mint spoke to some customers who had been refused health insurance policies because of their age, but none of them wished to be quoted.
An executive associated with the insurance business blamed third party administrators, who act as intermediaries in the claim-settlement process between policy holders and insurance companies. Rahul Aggarwal, director at Optima Risk Management Services Ltd, a Delhi-based insurance brokerage company, said, “Health insurance businesses are running into losses because third party administrators do not scrutinize the escalating hospital bills properly. There is no regulatory body for hospitals, which gives them a chance to charge undue amounts from their patients.”