Rural India reports higher death rate: Study

Lack of medical infrastructure, coupled with high incidence of frauds have increased the number of death claims being reported from rural areas as per the data with life insurance companies.

States from the North East such as Mizoram, Manipur, Nagaland, Meghalaya and Assam reported the highest incidence of death claims in the country according to a study done by Insurance Information Bureau (IIB) that studied 35.59 crore policies that brought 8.64 lakh death claims in 2013-14. The study released this month shared exclusively with FC shows that Andhra Pradesh reported the highest claim incidence among the larger states.

Andhra Pradesh, Karnataka, Telangana, Assam and a few other North Eastern

States had 30 to 35 per cent higher claim incidence than the national average while Jammu & Kashmir, Kerala, Maharashtra, Delhi and Odisha reported 20 to 35 per cent lower claim incidence than national average. “Most of the districts figuring among Top-50 districts by claim incidence fall in the hinterland. None of them cover major cities,” said the study.

The Claim incidence of top 50 districts (ranked by claim incidence) is 84 per cent higher than the national average (4.48 versus 2.43).

Claim incidence is defined as the number of claims per 1000 life insurance policies.

Sanket Kawatkar, principal and consulting actuary at Milliman (an international actuarial firm) told FC, “While the cities have access to medical treatments and hospitals these are lacking in remote areas. Secondly, there is high incidence of frauds in rural areas. For instance it is easy to get a fake death certificate in some parts of remote areas. Since the claim amounts are low, life insurers do not want to spend large amounts of money on claim verification. Therefore the claim ratios remain high from rural areas.”

A majority of life insurance policyholders die of heart attack which formed 32.1 per cent of the total deaths claims as per the IIB study.

Interestingly, women reported 40 per cent lower claims than men (1.65 vs 2.73). A study of the repudiation of claims showed that more repudiations were seen at higher levels of death benefit/sum assured.

Agriculturists, house wives, women with unearned incomes, sudents and retired persons saw higher claim repudiation while the lowest repudiations were incase of employees and professionals.