Page 21 - The Insurance Times February 2025

matters to the consumers. If a pension product is presented or both has migrated to a higher age bracket -the reason
as if it would guarantee the same level or desired level of for seeking the higher premium. The rise of premium is
lifestyle as before, it possibly would be perceived as more based solely on the advancement of age, and no consider-
inclusive. In that case, it would be explained through sheer ation is given to maintaining good health or healthy
consumption rather than pure investment. behaviour. There is so much hype on technology, but even
the new-age insurance companies have been unable to shed
The trade-off between consumption and investment needs their deeply ingrained legacy underwriting practices. Is it
to be better explained and explored. As a pure investment not a travesty that a person maintaining good health, not
product, life insurance faces many competitors. A mutual preferring claims for years, is punished in this manner? Se-
fund is a better investment option. Still, it cannot provide nior citizens' health insurance products are often designed
the protection and safety valve life insurance offers as such with a copay of as high as 50%. Over and above, even le-
life insurance products should highlight the consumption gitimate claims are not paid on flimsy grounds.
aspect alongside investment to stay afloat in the market.
In such a scenario, an insurer will be very caring and aware A TPA would usually disallow an expense allowed by the
of the consumer's life cycle needs. While delivering, the in- hospital on the score that the expense is not medically nec-
surer is transparent and inclusive as it covers the varied essary. The poor customer has to bear those expenses un-
needs of your customers. willingly. The insurance company is highly narcissistic in its
approach - It provides senior citizens ostensibly with a health
If 'framing' (Geneva Report) is taken care of at the product insurance product; however, that comes at a very high cost.
design level, then the components of care, shared interests, They protect their claim outgo with steep copays and inter-
and holistic, inclusive approach manifest in all such product pret the opaque policy wordings to their advantage. The
presentations. The choice is with the organization to use business in this quadrant gets mired in exploitive tenden-
autonomy to delve deeply into the psyche of insurance pur- cies. Every business should avoid this positioning.
chasers and understand their life cycle needs. As an insurer,
it can't afford to be transactional. It has to build a peren- The fourth quadrant is identified as 'Ambivalent
nial relationship with customers by developing products that Behaviour' marked by two pluses, i.e., the degree of ap-
suit their changing lifestyles and lifecycle needs. plying rules for shared interest and holistic or inclusive ap-
proach. Still, it gets affected by two minuses, i.e., degree
Ethical organizations always try to adopt this position and of opaqueness and degree of apathy. The business believes
refine their decisions to maintain this ideal position. in shared interest and is accommodating but falsely preys
on opacity and a degree of indifference or apathy to share-
The third quadrant is identified as 'Exploitative Tenden- holders. A person buys motor insurance and a health insur-
cies', with all minuses. The business relies on brute force ance policy from the same company. To her utter surprise,
rather than the Rule of Law. It uses its unlimited power over she finds the treatment of misrepresentation is very differ-
other people, often unfairly and cruelly. I will explain this ent in both policies. In health policy - even on an innocuous
positioning that an insurance business takes with an ex- misrepresentation, the policy can be voided by the insurer.
ample of health insurance for senior citizens. Senior citizens
pay a very high premium for even a reasonable cover of 5 On the other hand, in case of misrepresentation, in motor
to 10 lakh (reasonable in today's context). They keep pay- policy, - she may be paid the claim even if the payment gets
ing premium religiously every year despite their shrinking compromised, but the policy is not voided. The different
income. Suddenly, during a policy renewal, they are told they treatment makes an insurer's offerings very opaque - an
will have to pay an increased premium as high as ten thou- ordinary insured finds it challenging to comprehend the dif-
sand or even more without citing any reason. ferences in both policies. This makes the insurer's position
ambivalent, with two sets of different interpretations for
Many of them have not taken a claim in the last five years similar policy wordings. The huge misselling in the insurance
as they predominantly suffer from chronic diseases for which market results from apathy or sheer inertia on the part of
hospitalization often is not required. It may be noted here the business (insurance) to address this imbroglio.
that a health insurance policy is triggered only in case of
hospitalization. Health policies hardly trigger for other kinds The bancassurance model is a massive disappointment, with
of institutional settings, far better suited to senior citizens. banks indulging in misselling very high. A poor account
On enquiry, they are sometimes informed that one of them holder who prefers a health insurance policy through a bank

20 February 2025 The Insurance Times