Before we get to claims, let’s understand what life insurance is. It is an agreement between an insurance company and a policyholder in which the insurer agrees to pay a mutually agreed sum to the beneficiary in the unfortunate case of the policyholder’s demise during the policy term. When such an unfortunate scenario occurs, the need of filing a life insurance claim arises.
When it comes to claims, life insurance policies include several conditions and clauses which you must stay aware of beforehand. Here are six things you can do as a policyholder to ensure that your life insurance claims are taken care of in a smooth and hassle-free manner.
Always pay your premiums on time.
When it comes to life insurance, you should avoid a lapse in policy coverage at all costs. A sensible way to do so is by setting up auto-pay on your life insurance premium.
If a claim is made after the policy has lapsed, the claim gets rejected. Now while life insurance companies do offer a grace period after the premium due date, it’s best to be on time with your premium payments on life insurance policies.
Always disclose complete personal information.
Any information you do not (or forget to) disclose to your life insurance company is deemed concealment of information. Ensure that specifics such as your age, qualification, occupation, and income are filled accurately at the time of proposal. Your life insurance coverage and premiums are based on this information, so be honest and forthright while providing it.
The same goes for medical history and lifestyle habits.
These are two integral aspects that must be disclosed upfront when buying life insurance. Your medical history, habits like smoking and drinking, and lifestyle preferences, like taking part in adventure sports, will have a direct bearing on your life insurance cover and premium. Not notifying the same to your life insurance company may lead to the rejection of a claim on the grounds of non-disclosure of such important information.
Fill up your insurance application form yourself.
Details regarding personal information and specifics about medical history and lifestyle habits are best understood by yourself. On the plus side, application forms for online life insurance are pretty concise so filling them out isn’t confusing or time-consuming either. But in case needed, a financial advisor or an expert should be reached out for guidance.
Read the fine print.
From what is life insurance to the terms and conditions as well as inclusions and exclusions – it is essential to understand them all. There are exceptions as well in the policy contract that you must stay aware of. At the end of the day, you’ve taken life insurance to keep the future of your loved ones secured so it is critical to carefully examine your policy statement to ensure that there are no claim rejections in the future because of a certain clause or exclusion.
Last but not least, keep your nominee details updated.
While processing a life insurance claim, your insurer must be able to verify the nominee’s details via documents such as legal heirship and succession certificates so that the claim settlement is seamless.
Life insurance is more than just a tax-saving instrument; it's a way to take care of the financial needs of your loved ones so that their future is secured.