Be careful Insurance companies have started canceling loss making group health policies

Some buyers have been thinking they are smart and by creating excessive competition among Insurance co’s, and Insurance intermediaries they can bring down the insurance premium for Group health policy. As insurance companies have started looking at their portfolio carefully, we can say most of them have started canceling heavy loss making policies. We welcome this as we want healthy insurance companies as large assets of this country are also insured with them.

According to one newspaper report cancellation of group Mediclaim policy midway has gone up by 30 percent during last 6 months.

The question before us is why this has happened? Customers will always like to buy any product, service or insurance at lowest cost. Are we penalizing the underwriters or the sales team which picked up the premium at lower rate to achieve their targets and incentive plans?

We understand practically all private insurers are canceling group health policies with a 30-day notice. Incidentally insured or insurer both have the right to cancel the contract by giving 1 month notice.

According to a source ICICI Lombard has asked L&T to pay additional premium for the group health policy in the middle of the year. When contacted, L&T said that ICICI Lombard has requested for extra premium but has not sent any notice.

An ICICI Lombard spokesperson said that they have a vigilant investigating team, which ensured that genuine claims were paid.

We feel “Cancellation of health policy midway is not a good practice and this shakes the confidence of the public. If the insurer has not priced the risk appropriately or the sales staff has shown aggressiveness in booking the business then they should be penalized first and not the customer. Policy should only be cancelled in case the data given by the customer at the time of quote was given wrongly or the information was concealed.”