Posted by : K. Ramalingam
How many times have you asked yourself "Will my insurance company will settle the claims or reject the claims in case of any mishappening to me?", "Will my family get the claim benefits or not?"
An insurance policy is the financial security for family if the bread winner of the family passes away. The financial security will be ensured only if the claim is settled by the insurance companies in a hassle free manner. If the claim gets rejected then the financial security of the policy holder's family will be in a deep trouble. Then why the insurance companies are rejecting the claims?
Insurance policies are issued based on the facts and information provided by the policy holder in the proposal form while taking the policy. If he/she has not provided adequate information or hiding any information in the proposal form then it leads to claim rejection.
So, how to avoid the rejection of your life insurance claim?
If you follow the below 6 step while taking the policy, it not only avoid the claim rejection but also assures the financial security of your family.
1. Caution: Don't trust your insurance agent mindlessly
We are always in a hurry and want things to happen in a jiffy. We never read the proposal form completely and fill the details required in the form. We just sign the form and ask the insurance agent / advisor to fill the details required and issue the cheque. This is an absolutely wrong practice.
The agent does not have complete information about you and your family's medical history. He may fill some incorrect information and submit the form to meet his sales targets. Also don't think that the agent is doing a favour for you by overlooking your health problems.
Always fill the form by yourself and keep a copy of the form. Verify the details printed in the policy document with the copy of the details filled. If you found any discrepancy inform the insurance company immediately to rectify it.
Insurance also needs the same amount of time and interest like we do other investments like real estate, mobile phones, cars etc. We never allow a showroom guy to choose a mobile phone for you, like wise don't allow an insurance agent to fill the forms for you.
2. Why giving incorrect information in the application doesn't work?
It is our duty to disclose all required information to the insurance companies. If you hide some facts and not maintain transparency then your claim may be rejected.
To avoid this always furnish the correct and true information like your age, height, weight, occupation, income, existing policy details and any other details asked in the form.
Mostly we don't reveal the details of other policies we hold. It takes some time to gather the details of the existing insurance policies. For that reason mostly we hide these details. This should be avoided and furnish the complete information about your existing insurance policy details to avoid any claim rejection in future.
3. Medical history: One mistake that can ruin the claim settlement
The most important part in the proposal form is the details of medical history of the proposer and his family. Based on this information the insurer will arrive at the premium to be charged and whether the policy can be issued or not.
Disclose all the relevant facts regarding the medical history of you and your family. It is also important to disclose the habits pertaining to consumption of alcohol and tobacco. Be honest in declaring these details to avoid the claim rejection.
4. Stop avoiding medical tests
Based on the information provided in the proposal form underwriter will assess the risk and the policy will be issued. Sometimes for a higher sum assured policies and term insurance plans you need to undergo medical test compulsory. Don't avoid such medical tests. This will reduce the chances of a claim being rejected on the basis of pre-existing diseases.
5. Update the nomination and help your beneficiaries get the claims faster
Often we buy life insurance for tax saving purpose and do not get worried about the nomination. Usually, we nominate our parents when we are unmarried and fail to update the nominee after marriage.
It may also happen that at the time of claim both policy holder and nominee are not alive. Usually nominees are not changed frequently as people change address. But it is important to update the nominee details if there is any change in nominee or incase the nominee had passed away earlier than the life assured. Here the claim may not get rejected but one is required to follow certain legal formalities to get the claim.
6. Policy lapse: Biggest threat to claim settlement
You will get the claim only when the policy is in force. It is more important to pay the premiums on or before due date. Insurance companies are providing some grace days if we fail to pay the premiums on due date.
Claim will not be paid if the policy is not renewed within the grace period and something happens on the next day after grace period is over.
If you could take the points from the above factors and avoid claim rejection, then your family will achieve their financial goals for sure even if you are not around
Hi I am Yen Wei Nee
I have been in insurance industry for 17 years and would like to share here with you my experience and information that is now changing our lives.