Cutting the losses before premiums increase further

I REFER to the letter “Shocked by hike in insurance premium” (The Star, Sept 14). Just like Jean, I too would like to express my disappointment with the increase in premium for medical insurance which I purchased for myself, my wife and two children.

Jean’s complaint was that the medical insurance premium was increased by 15%. My insurance company increased the premium by 40% this year! The justification cited was the same – that the cost of diagnosis and medical treatments had gone up, this despite the coverage remaining the same.

Just like Jean, I too relied on the information provided by the insurance company to determine the affordability before purchasing the policies.

I purchased the four policies between three and four years ago. The huge increase prompted me to decide not to renew the policies upon renewal for this year.

This is because the insurance company had said they would continue to increase the premiums every two years. Furthermore, they were not able to state with certainty the future increases in premium.

This would make the premiums unaffordable to pay in the long run. This, I feel, is very unethical on the part of the insurance company and, regrettably, the authorities concerned seem to be unmoved by their actions.

My two children’s policies expired on Aug 15 and 30 this year (their ages are 13 and 15). The policies for myself and my wife will expire early next year. There were increased premiums this year and we were informed that there will be an even heftier increase next year.

I have decided to cut my losses at this initial stage rather than to pay future uncertain premium amounts. It took me a long time to decide on this after discussing with my wife.

Ultimately, the premiums paid may outstrip the coverage and may not even be worth it (coverage till age 54 years for my children and 80 years for me and my wife). The thought of forgoing the premiums already paid is in itself quite painful.

My queries on the increased premiums were verbal and made through the servicing agent and customer services personnel. The insurance company (via letter) proposed that I convert the insurance policies to “investment linked” to avoid future increases in premi- ums. By converting the policies to “investment linked”, the annual premiums would be fixed but at higher amounts. The coverage would be enhanced as well (which I do not need).