About 1.5 decades ago, when I used to read every magazine of Outlook money and do in depth research of the topics of personal finance, I came across 'Repudiation rate' for Life insurances.
The repudiation rate in insurance is the percentage of claims that an insurance company denies out of the total number of claims filed during a specific period. These denials can occur for various reasons, such as claims being filed after the policy has lapsed, improper paperwork, policy exclusions, or the suspicion of fraud.
For some 'only' online life insurance companies these rates to be about 40-50% and were untrustworthy from an insurance point of view. Why were these having such high repudiation rates compared to 3-5% for other insurances? Because they were the ones who used to run gimmick ads of dirt cheap insurance and then when the claim time came, they used to give some silly reason to reject the claim (that too, when the person insured is no longer alive).
I used to get these repudiation rates from the Insurance regulator - IRDAI (Insurance Regulatory Development Authority of India) in its annual report.
This month, I was thinking of getting a term insurance and wanted to check the repudiation rate from the last year's annual report.
But, alas, they have stopped giving the individual companies repudiation rates and are only giving a category wise repudiation rate. Rate for Public companies and for private companies.
This is severely allowing the bad players to hide their bad work and not allowing the customers to know and choose wisely.
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