Ask Mint Money | Insurance ombudsman’s decision is binding on the company

Ask Mint Money | Insurance ombudsman’s decision is binding on the company

I have a family floater policy since the last six years, renewable every two years, for 5 lakh. Three years ago, I made a claim for my wife. At that time the premium was around 1,200 per month for our four-member family including me (52 years), my wife (49 years) and two kids of 9 and 15 years then. In January 2010 when the renewal was due, the company increased the premium to around 2,000 per month. I have not made any claim in the last two years. Will the premium reduce now?

-Rajeev

It is wrong on the part of your insurance company to load the premium after the first claim. Insurers generally load the premium if there are recurring claims and not if there is a possibility of recurring claims.

You should write to the insurer asking it to reduce your premium to the amount mentioned in its charts. In case you do not receive a reply, which I doubt you will, write another letter mentioning that you will take up the matter with the insurance ombudsman if the insurer does not correct the anomaly. Subsequently, you should take up the matter with the insurance ombudsman and lodge a complaint. Send all communication by registered address.

I feel the ombudsman will direct the insurer to reduce the premium. The ombudsman’s decision is binding on the insurer.

I have a mediclaim policy for the past five years. I have been advised to switch to a new insurance provider under which I can increase my sum insured by 2 lakh. Should I switch or continue with the same provider?

-Ramesh Gupta

It is not advisable to change the insurer, especially if you have had the policy for five years. Health insurance policies cover all pre-existing diseases after four years of continuous coverage without break. You policy, therefore, covers all your pre-existing diseases. The best option is to increase the sum insured in the same policy. All insurers allow increase in sum insured in existing policies. However, they require medical tests if the age of the insured person is more than 45 years. The insurers also impose time excess such as first-year exclusions on the increased sum insured. The medical test and time excesses would also be applicable if you were to take a new policy.

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