Khota Paisa

Insurance – Is Cheaper The Better?

Posted in Insurance by khotapaisa on July 8, 2009

Ask any financial advisor as to which term plan to buy and he/she will tell you to go for the cheapest one. That may be a good option as far as numbers are concerned, but personal finance is not just about number. It is better to pay a higher premium for your term plan in return for a better claim settlement ratio. Yes, I know all the claims about the regulations in insurance and the insurance being a contract. But then, every contract has these holes which you would never know till you see it being used.

The “Cheaper is Better” theory is actually counterproductive in case of health insurance. To give you an real life example, there is this company XYZ, which provides health insurance. As per their rule, if you don’t intimate them within an hour of hospitalization, they will reject the claim. How do you expect somebody to be able to call up the insurer when his/her family member is seriously ill and needs immediate medical attention? Keep in mind that this insurer provides one of the cheapest (may be the cheapest) mediclaim policy. So chances are that if you haven’t researched properly, you will endup buying this insurance, only to be rejected (most likely) when you need it.

On a side note there is a proverb in hindi which goes like this –
Mahnga roye ek baar, sasta roye baar-baar“.


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