Friday, January 13, 2012

Life Insurance Policy Claims

Life Insurance Policy
Life insurance policies are taken with the idea of providing financial security to the family which is dependent on them. Sometimes making claims becomes problematic if some details are not given to the insurance company. This causes problems to the nominees to claim the amount.
Generally people who take insurance policies do not fill the applications form personally. Many times people do not even read the insurance forms though these are very important for the life. Many a people do not even know that there will be questions in the application form about health and habits of the policy holder. Insurance agents write ‘not applicable’ opposite to many such questions. Thinks like this make a problem while making a claim in unfortunate situations. There are many reasons for the insurance claim to be rejected.
  • Number of insurance policies has increased in the recent times. This has increased the number of claims. For 90% insurance claim rejections, keeping the health details secret is the main reason. If the policy claim is rejected for these reasons, there will not be any advantage even if the ombudsmen or consumer forums are approached. If the policy amount is more than Rs. 10 lakhs and the policy holder is dead within three years from taking the policy, insurance companies search for defects.
  • Many people have a misconception that policy will not be given if the details of ill-health of bad habits are provided in the application form. But this is not true. Any insurance company will try to increase the business. They will only ask the applicants to undergo some more medical tests.
Expired Insurance Policies
Claims will be accepted only when the life insurance policy is in implementation. If the premium is not paid on time, the policy will get expired. Claim will be rejected if the policy holder dies, disappears before renewing the policy. Expired policies can be renewed up to five years if the policy holder is alive. Late fee can be paid for renewal of the policy.
Some people do not even inform to even their family members about the insurance policies. If the policy holder dies, the family members may not even know to claim the money till the insurance company sends some information. If the nominees have shifted to another house or city, this chance also will not be there. Premium paid till then will get wasted.
  • Policy holders should inform the insurance company about the policies that are already taken.
  • People are now-a-days taking term policies online. There will not be any documents in this electronic method. All the details of the policies will be sent to the policy holder’s e-mail address.
  • Even if the policy is taken online it is important to take the printout of it.
Rejection of Insurance claim
If the insurance claim is rejected then the nominees can request for revision of the application within 30 days from the date of rejection. Every insurance company is setting up service centers to solve the problem of policy holders. If the nominee feels that the claim is rejected baselessly they can make a complaint to the insurance ombudsmen.

Insurance Policy Precautions

When the head of the family who is the earning member dies, it will be difficult for the family members to make rounds to the insurance companies. Some precautions are to be taken to avoid these problems.
  • Insurance policy proposal form is to be studied completely and the applicant should personally fill the proposal form.
  • Do not ever forget to write the name of the nominee. This is important to avoid conflicts between heirs. This will also avoid problems in claiming the amount.
  • Insurance policy should be carefully kept. Inform the details to family members.
  • If the policy papers are given to anybody. Take a Xerox copy of the policy and take acknowledgement.
  • If the insurance policy is missing or damaged inform immediately to the insurance company.
  • If there is any problem in paying the premium and the policy is expired, renew it as early as possible.
  • Do not forget to inform the change of address to the insurance company. Phone number and e-mail address are to be given to the insurance companies.
  • If medical tests are compulsory to take any policy personally go to the doctor. Take care that the agent enters the details like height and weight correctly.
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