Funny moments with insurance

Insurance is a serious matter and pretty morbid. Gloomy images of death, delayed claims conjure up, making it a rarely laughable subject. Yet, every time I have tried understanding what insurance is all about, I have had my moments of uncontrollable laughter. Thankfully last year the regulator felt it was better to do away with the mandatory disclaimer that ran something like, “Insurance is a subject matter of solicitation…”. What the disclaimer meant was that insurance being a financial product was asked for by a buyer and that it could not be sold. Yet, I am sure we all have had our moments of cold calls asking us to buy a policy.

In case of life insurance, there is a death benefit which is highlighted very prominently by the agent and the insurer. I fail to understand who will ever benefit from my death? Yes, over the years I have had my share of enemies, but then even they are unlikely to gain anything financially from my demise. The bizarreness goes further when you hear about accidental death benefit, disability benefit and you get the drift. Search for benefit in a thesaurus and you will find equivalent words like help, advantage, subsidy and more.

None of these actually apply to me if I am paying for an insurance policy, from which I receive proceeds as stated in the contract. Then, there are riders that you can attach to an insurance policy. It sounds more like being taken on a ride, but, there it is; meant to increase the scope of my insurance and enhance the risk cover.

For long I assumed standard life was the name of a British insurer, but I figured it means something else too. Non-standard life is how an insurer terms an individual whom they sell a policy by charging an extra premium over the normal rates. The reason being, the individual does not meet the standard life criteria of the insurer, which by the way can vary across insurers. Then there are differential premium rates for men and women—there goes gender equality—and for smokers and nonsmokers.

It is a different issue that a smoker may be non-alcoholic, and a non-smoker a hardcore alcoholic. It’s getting a bit heady trying to understand what this all means. The humour gets intriguing with health insurance where one comes across terms like top-up, which ideally one would understand to be added to an existing policy. But, top-up is actually a policy in itself.

There is co-pay and there is a deductible, which can be quite confusing. A deductible is the amount you pay in case of a claim before your health insurer starts to pay. Co-pay is a fixed amount you agree to pay for a health insurance claim you raise. I am yet to understand the difference.

 Insurance definitely can be amusing if looked into dispassionately. But for insurers, who are perhaps the only financial services providers who solely deal with individuals as customers, it is time they demonstrate customercentricity by changing their language. Else, one of the most powerful financial instruments will continue to be one that leaves its owners powerless.

nk@outlookindia.com