64% respondents said that they fear of claim rejection while applying for a health insurance policy.
Fear of facing difficulties in claim settlement and unwillingness to disclose the smoking/chewing tobacco habit has led a majority of smokers not to buy health insurance cover, shows a recent study published by ICICI Lombard General Insurance.
The study was carried out on ‘World No Tobacco Day’ in five cities - Mumbai, Kolkata, Hyderabad, Lucknow and Ahmedabad. Over 1,100 people earning a minimum of Rs. 25,000 per month salary and having smoking or tobacco chewing habit participated in the study.
The
study shows that 55% respondents did not have a health insurance cover. The
study revealed that six out of ten people haven’t disclosed their smoking or
chewing tobacco habit in the policy declaration. Also, 64% respondents said
that they fear of claim rejection while applying for a health insurance policy.
In fact, 8 out of 10 people strongly believe that they would have to face
difficulty in getting their claims settled due to their smoking habit.
Sanjay Datta, Underwriting and Claims, ICICI Lombard GIC said, “A smoker if has not declared this habit while buying a health policy can face rejection of claim and policy as well, as per non-disclosure of material information norm, especially if the disease for which claim is made is related to condition caused or affected by smoking. Otherwise, claim processing is not affected in any way if the customer is a smoker and has declared it while buying health policy.”
“If a person is smoker, he or she should declare this habit and its frequency as asked by the health insurer appropriately while purchasing a health policy. Since smoking is one of the criteria of medical underwriting, not declaring it might lead to policy cancellation later,” Datta added.
Suresh Sadagopan of Ladder7 Financial Advisories says, “Many people don’t prefer to disclose pre-ailment disease while buying health insurance policy which increases chances of claim rejection. Hence, advisers should persuade their clients to disclose all aspects of their health before covering it. This will help our clients to get their claim settled easily.”
Besides, 84% respondents agree that health insurance is a necessity for tobacco users given the increasing hospitalization costs. Most respondents also mentioned that they would prefer buying insurance from a company that has higher sum insured. Health insurance is more useful for tobacco consumers than non-tobacco consumers, said 79% respondents.
Through a press release, Datta said, “The findings clearly indicate that lot needs to be done to motivate people to quit unhealthy habits related to tobacco consumption as well as opt for health insurance for their financial safety.”
A managing director of an insurance broking firm told Cafemutual that many insurance companies especially public sector insurers don’t bother about smoking habit of customers at the time of issuing policy. However, when it comes to claim settlement, such companies often repudiate it on grounds of non-disclosure. Insurance companies should cross check the details while processing any sales request, he advised.
Other key findings:
- 71% of respondents don’t mind paying high premium if covers tobacco related ailments
- 76% of respondents still feel they need health insurance cover to save on tax
- 83% of respondents having health insurance policy have critical illness cover