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Naveenn Kummar |241 Answers |Ask -Follow

Financial Planner, MF, Insurance Expert - Answered on Jan 10, 2026

Naveenn Kummar has over 16 years of experience in banking and financial services.
He is an Association of Mutual Funds in India (AMFI)-registered mutual fund distributor, an Insurance Regulatory and Development Authority of India (IRDAI)-licensed insurance advisor and a qualified personal finance professional (QPFP) certified by Network FP.
An engineering graduate with an MBA in management, he leads Alenova Financial Services under Vadula Consultancy Services, offering solutions in mutual funds, insurance, retirement planning and wealth management.... more

Asked by Anonymous - Jan 08, 2026Hindi

Hello Naveen sir I had 2 questions: Q1) I had taken a Bajaj Allianz familycare insurance for my parents around 2011 w/ Rs 20K premium/month. I diligently paid upto 2015. However there was a major life and death incident around 2015 after which I submitted official hospitalization claims to Bajaj Allianz for my parents. The agent took all hard copies and said they were lost in postal transit from Nagpur to Pune. I had multiple arguments and raised grievance with Bajaj higher ups, complained about the agent too. Ironically even if all the documental evidence, FIR were genuine Bajaj Allianz stopped communicating. I was fed up chasing them and stopped paying the premiums from 2016. The policy is now inactive. The question is - I understand it has been a long delay and lost case as I was frustrated to follow up, is there any way I can get my accumulated hard earned Rs.1.2 lacs premium back from Bajaj Allianz, any advice if you can share will be very helpful. I can use it for treatment and medical needs of my parents. Q2) I recently purchased a flat with a heavy investment and took loan from HDFC. Since the loan amount is huge approx 1Cr, HDFC mentioned (in a way forced) that I need to take an insurance from them to cover the risk. This insurance of around 15lacs was added to my loan as top up and I need to pay it off monthly in addition to my EMI (+ 14K added burden). The question I have is - is such an insurance really necessary to be taken from HDFC as I was totally against their proposal. I did suggest that I can instead take a term insurance from other companies which will still come out to be cheaper, but they insisted that it will be same. Please advise if it is really worth and if I have any options.

Ans: Q1. Old Bajaj Allianz health insurance policy. Can anything be recovered now?

You had a health insurance policy, not a savings or investment product. Health insurance premiums are paid only for protection during the policy year. They do not accumulate or become refundable like LIC, ULIP, or endowment plans. Once a policy lapses and a claim is not settled, there is no automatic refund of premiums, even if premiums were paid for several years.

In your case with Bajaj Allianz, the claim itself appears genuine, but the handling failed.

What happened

Hospitalisation claims were submitted.

The agent collected originals and they were reportedly lost in courier transit.

You escalated the issue, raised grievances, and filed an FIR.

Communication eventually stopped.

Premium payments were discontinued and the policy lapsed.

This amounts to deficiency of service, but the long time lapse has weakened the case substantially.

Why the duplicate document route mattered
When original discharge summaries and bills are lost, insurers normally accept duplicate hospital records, provided they are:

Issued by the hospital on official letterhead

Marked as certified true copies

Supported by a loss declaration or FIR

Hospitals maintain records for many years and routinely issue such duplicates. In many cases, additional bank attestation is used to strengthen authenticity and avoid insurer objections. This process keeps the claim procedurally alive. The agent should have guided and executed this reconstruction at that stage. Since this was not done in time, the insurer later had procedural grounds to disengage.

Is recovery possible after 8–10 years?
Realistically, it is very difficult, though not completely impossible. Normal customer care routes are closed. Only legal or regulatory escalation remains.

What can still be tried

Insurance Ombudsman: Cost free, but chances are low due to delay.

IRDAI grievance portal: File a detailed complaint with FIR and whatever documentation is available. Correct route, limited expectation.

Consumer Court: Possible only if negligence and harassment can be proven. Time consuming and costly. Given premiums paid were around ?1.2 lakh, effort versus outcome must be weighed carefully.

Expectation setting

Full refund of premiums is highly unlikely.

At best, there could be claim consideration or partial compensation.

Missing documents and broken follow up significantly weaken the case.

Practical advice
Do not depend on this money for current medical needs. Treat any recovery as incidental, not planned.

Q2. Home loan insurance added by HDFC. Is it mandatory or worth it?

Short answer: No, it is not mandatory.
Banks often push such insurance aggressively.

In your case with HDFC:

Home loan of about ?1 crore

Insurance of roughly ?15 lakh added

Premium loaded into the loan as a top up

EMI increased by about ?14,000

This is a bundled selling practice.

Regulatory position

A bank cannot force a borrower to buy insurance from the bank or its partner.

RBI and IRDAI allow borrowers to choose any insurer, as long as adequate risk cover exists.

Loan approval cannot legally be linked to purchasing the bank’s insurance.

Is insurance itself needed?
Yes, risk cover for a large loan is sensible. But not in this structure.

Better structure

Pure term insurance on your life

Sum assured equal to or slightly higher than the loan outstanding

Policy assigned to the bank if required

This option is cheaper, transparent, flexible, and fully under your control.

Why bank loan insurance is poor value

Single premium plans are expensive

Interest is paid on the insurance premium

Coverage often reduces while cost does not

Exit and modification are difficult

Options available

If within free look period, cancel immediately and adjust the premium against the loan.

If outside free look, review surrender terms and assess exit loss.

Take independent term insurance and formally inform the bank. They cannot reject valid alternate cover.

If time permits, explore nationalised banks, which are often more flexible on insurance conditions.

Final summary

The health insurance claim issue is emotionally justified but legally weak due to time lapse and missed procedural recovery steps.

The home loan insurance issue is correctable, and action taken early can significantly reduce long term cost.

Best regards,
Naveenn Kummar, BE, MBA, QPFP
Chief Financial Planner | AMFI Registered MFD
https://members.networkfp.com/member/naveenkumarreddy-vadula-chennai

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