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While buying a life insurance policy you are thinking of providing adequate security to your family in case something happens to you. This security could be in the form of covering large liabilities – like a housing loan, or to provide a steady income for your family that will help them maintain their lifestyle.
A few handy tips will ensure that your family does not receive a rude shock if they ever have to make a claim on that policy. To have the claim rejected or repudiated defeats the very purpose of having bought a life insurance policy – the future security of your family! Repudiating a claim is not easy for the life insurer, but can be done for a number of reasons- providing incorrect information, not making adequate disclosures regarding health and lifestyle, failing to keep the policy in force by not paying premiums and making claims during periods of ‘exclusion' are often the key ones.
Tips to smooth settlement
The basis of the entire insurance contract between you and the life insurance company is the proposal form. Hence you must treat the proposal form with care as it is the basis upon which your claim will be accepted or rejected if such an eventuality should arise.
Fill the proposal form yourself or verify all contents carefully. The information given in the proposal form is deemed to have been given by you or verified by you. This form is the basis of the insurance contract. The best case scenario is that you fill this form yourself. If this is not possible please check that all your personal details are correctly filled out – such as your name, date of birth and contact details.
Complete disclosure
One of the biggest myths regarding insurance is that honest declarations lead to a rejection of the proposal by the life insurance company. This happens only in very rare cases. Most times the worst consequence of an honest declaration is that you might be required to go for a medical examination or you may have to pay a marginally higher premium. However, suppression of information does lead to rejection and repudiation of claims. Most common errors are wrongly declaring or not declaring tobacco or alcohol intake, not declaring pre-existing medical conditions such as hypertension or diabetes etc. You may often be advised otherwise but make honest declarations to ensure that any claims on your policy are paid out.
Check nominee details
Once you have selected a nominee ensure that the nominee knows the details of your policy such as sum assured, policy term, and insurers contact details. Also keep your policy booklet (policy bond) in a safe place and ensure that your nominee knows where the original policy bond is stored. This will be required at the time of filing the claim.
Make yourself and your nominee fully aware of all ‘exclusions'. Many policies have certain ‘exclusions' that you may not be fully aware of.
For example some health policies may have a ‘cooling' period of 60-90 days before a claim can be made. Policies often exclude suicides within one year of policy. Similarly, there can be other ‘exclusions' that you must make yourself and your nominee familiar with.
Most importantly, pay premiums regularly so that Policy stays in-force. If you fail to pay your premiums, your policy is likely to lapse. As soon as a policy lapses, all death benefits cease immediately.
The policy document
Make sure that the facts provided at the time of buying the policy are correct, accurate and complete and that you have disclosed all material facts to the Company. You need to verify if the same facts and responses are replicated in the policy document.
You also need to ensure that all the documents submitted (E.g. Age Proof, Income Proof, etc.) along with the proposal form are genuine.
Please check the following details in the copy of the proposal form thoroughly: Name, age and contact details, nominee details, income details, insurance policy details and medical history. If there is any incomplete or inaccurate information in the document, don't hesitate to contact the Life Insurance Company.
Life Insurance companies are committed to paying out claims. However, if the insurer rejects the claim on specious grounds or unacceptable reasons, you need not hesitate to contact the Insurance Ombudsman directly.
(The author is the Chief Marketing Officer, AEGON Religare Life Insurance)
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