Planning to buy an insurance? Here is some advice on pertinent issues

Answers to insurance-related questions sent to us by our readers

KG Krishnamoorthy Rao, Managing Director and Chief Executive Officer, Future Generali India Insurance Company, answers your questions on how doctors should insure their finances against medical negligence charges, medical top-up cover, increase in insurance premiums and several other issues, which were sent to us by our readers.

I am a doctor a who runs a clinic. What can I do to insure myself against the risk of being charged with medical negligence? Such cases are increasing in numbers and I'm worried about the impact this could have on my finances. 

There is an Errors and Omission Insurance Policy, which provides indemnification to individual doctors in case they become legally liable on account of their negligence in medical consultancy or treatment of their patients. The Errors  & Omission Insurance Policy covers insurable costs like lawyers’ fees and compensation awards passed by courts of law.

I am told that the claim settlement ratio is a really important measure that one should look up when choosing a general insurer. Could you explain what this parameter means and also the other parameters one should look up when choosing an insurer?

Claims settlement ratio defines the percentage of claims an insurer has settled in a given period out of the sum total of claims outstanding at the beginning of the period and the claims reported during the period. Apart from claims settlement ratio, the customer also needs to look at other parameters like product offerings, accessibility, claims process, responsiveness, turn-around time, robust grievance redressal mechanism, simple and easy to understand products and easily accessible customer service before he chooses his insurer. In addition to this, some of the other parameters like percentage of claims repudiated and percentage of grievances can indicate the customer centric approach of the insurer.

I already have a mediclaim policy with a sum assured of Rs 600,000. I want to enhance my cover. I'm confused about whether to buy a critical illness policy or a top-up cover. Please explain which would be a better option for me.
 

You can evaluate two options. One is to enhance the base sum insured of your existing policy from Rs 600,000 or opt for a top up cover. While opting for a top up cover, it is important to look at the terms of the policy—whether it is a per claim deductible or an aggregate deductible. It is advisable to opt for increasing the base sum insured of your existing policy in younger age groups because as age advances you may be required to undergo medical screening. Similarly, when the base sum insured is high, one can then opt for a high deductible top up cover whenever felt necessary, which is much cheaper. Critical illness policies basically complement indemnity policies. While the indemnity policies cover the expenses incurred for hospitalisation due to sickness or injury, critical illness products are mainly meant to protect the loss of income generation capacity as a result of a critical illness.

My health insurance provider has suddenly increased the premium by 80per cent. Can insurers increase premium as they like? Is there anything customers can do against such steep hikes in premiums?
 

Insurers are not allowed to increase the premiums arbitrarily. Insurers have to file with the regulator any revision in premiums after actuarial evaluation and can implement the revised premiums only after approval from the regulator. Insurers are required to increase premiums mainly due to increase in cost of treatments (annual medical inflation). Generally insurers tend to increase health insurance premiums once in three-four  years. 
 

I want to buy a home insurance policy for a housing loan. What is the maximum tenure that I can choose for home insurance? My loan is for 25 years. 
 

As a common practice, the policy tenure taken coincides with the loan period. This is an exception that has been given to policies covering property. 

The writer is Managing Director and Chief Executive Officer, Future Generali India Insurance Company.
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