Tuesday, November 06, 2012

Why IRDA needs to promote health literacy in India

One of India’s success stories has been our equity markets. Thanks to SEBI, Indian stock exchanges are as good as any stock exchange anywhere in the world. They use state of the art technology to allow online trading, which ensure openness and transparency. Indian citizens can invest with peace of mind in the domestic equity market , which allows them to share in the financial success of Indian companies  , which are doing extremely well as India charts its course towards becoming an economic superpower.

SEBI has taken a lot of initiatives to protect the interest of the small investor. Since  SEBI is worried that the common citizen may be misled by smooth operators , they have implemented a lot of rules in order to promote financial literacy . It is compulsory for mutual fund companies to invest in investor education , so that the common man is aware of exactly what he's being sold. This affords him protection from being duped and cheated by misleading ads and dishonest stockbrokers. This is a very healthy trend , and it’s very disappointing that we do not see a similar move towards promoting health literacy.

Ever since it has been opened up, the health insurance market in India is growing by leaps and bounds. There is a lot of scope for health insurance companies to earn money , because Indians now understand the importance of buying health insurance policies in order to protect themselves in case they fall ill . Just as SEBI has taken the lead in insisting that mutual fund companies protect investors by investing in financial literacy, I do hope the IRDA will also help to protect the interests of the purchasers of health insurance policies by insisting that health insurance companies promote health literacy.

IRDA can insist that health insurance companies invest a proportion of their profits on educating patients and improving health literacy . A lot of the issues about agents mis-selling policies by making false claims will be mitigated ,so that our consumer dispute redressal forums will no longer be choked by patients who are unhappy about the fact that they've been cheated by health insurance companies . Not only would this be a positive proactive step which would help individuals who purchase health insurance policies , it would actually help health insurance companies in the long run as well. It’s much better for them to have well-informed customers , who understand exactly what a health insurance policy will cover - and what it won’t !

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