Is there any use of a policy for which you keep paying premiums for 20 to 30 years and in the end your claim gets rejected? Harjot Singh Narula offers advice on how not to get your claim rejected
Claim settlement is the most important concern in your mind when you buy a life insurance policy. Claims are of two kinds: death claim and maturity claim.
A death claim, is payable to the nominee when the insured dies during the policy term to provide financial compensation under the policy contract.
Maturity benefit on the other hand is payable when the policy reaches the completion of the policy tenure.
The fundamental purpose of taking life insurance is to offer financial protection to your loved ones in unforeseen and untimely events like death.
In such a scenario, settlement of the claim becomes crucial. There could be an incident when the insurance company rejects the death insurance claim which could lead to unexpected financial and emotional loss for the family.
Insurance companies do not reject claims unnecessarily, but there could be some errors done on the part of the policyholder which could also lead to rejection of claim.
Few important tips could ensure a smooth claim settlement in the times when the life insurance money is needed the most.
1. Never hide information regarding your health and lifestyle
Many people think that if they reveal the right information regarding their health and lifestyle, their application for the policy will get rejected. But that’s not true as the worst consequence of revealing the truth could be a rise in premium amount or a medical examination.
This is the reason, why most of the people hide their health information like a disease or their lifestyle habit like drinking and smoking. But this can lead to rejection of claim on the basis of non disclosure of important material information provided by the policyholder.
So it’s better to pay a high premium or go through a medical test than getting your claim rejected after paying premium for a very long period of time.
2. Fill the proposal form by yourself
You need to understand that the proposal form is the basis of contract between you and your insurer. The information given in the proposal form by you is considered true and to the best of your knowledge. That’s why you should never allow the agent or anyone else to fill the proposal form as any wrong information, whether filled intentionally or by mistake is considered as misleading information by the insurer.
Such misleading information can lead to rejection of your claim.
Even if you have filled the proposal form by yourself, never forget to cross-verify it before you actually submit it.
3. Understand the policy details in brief
Always go through the policy brochure and policy wordings before buying a life insurance policy. It will make you aware about the inclusions and exclusions of the policy.
You will also get to know under what terms and conditions you are not covered under the policy.
Having detailed information about your life insurance policy will keep you and your loved ones, away from facing bad surprises at the time of claims stage.
4. Make your nominee fully aware about the insurance policy
After understanding the policy details, claim settlement process and exclusions, you should educate your nominee about the policy details in brief.
Your nominee should be clear about the sum assured, claim settlement process and other policy details because in case of your death, s/he will be the one who is going to make a claim.
It is also important to make your nominee aware about the policy documents and where they are kept.
You should properly categorise and label the policy documents so that your nominee will have no any difficulty while making the claim.
5. Update your insurer
Whether it is a change of phone number and address or change in your health condition, you should always update your insurer accordingly.
A change in the name or details of the nominee should also be informed to the insurer as soon as possible.
After updating the policy, you should always keep the proof of modified details. It will allow you to have a smooth claim settlement process without facing any hassle.
There is no use of a policy for which you keep paying premiums for 20 to 30 years and in the end your claim gets rejected.
That’s why a smooth claim settlement is one of the most important things you should keep in mind before and after buying a life insurance policy.
Be informed about these tips and make your claim settlement, a smooth and quick process.
Photograph: Bastian Sander/Creative Commons