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In life, various situations arise. Some are expected, and many of them, unexpected. While we plan for all possible events, usually the unexpected ones are full of surprises. The good ones bring joy, but certain others need preparation and support of all kinds. When these situations demand financial support, term insurance plans in India are highly useful. However, we have heard many of our friends and family members mention, time and again, that term policy claims and settlement is a cumbersome process. When filing for a claim, many ifs and buts come up, and the term insurance policyholder is left in despair.
Though there are scenarios where claims are rejected, some good practices, if followed, can lower the probability of claim rejection.
Correct information goes a long way.
Always try to personally fill the application form for the life insurance term policy so that you know what information is asked and disclosed. Never hide or misrepresent any detail asked in the application form. Details such as age, vocation, qualification, medical history, lifestyle habits (drinking/smoking/substance abuse in the past), information on other policies or claims made in the past, etc., should be filled in clearly and carefully.
Claims are settled only for active policies. Never skip premium payments.
If you skip your premium payment, your term policy becomes inactive. Once the policy becomes inactive, the insurer is not liable to settle claims. All the benefits of the insurance plan become void. Therefore, never skip the premiums; pay them before the due dates.
Be transparent about your medical history.
The information about your medical history, health conditions, or any other complications are some of the factors needed to decide the premium. Be open about past surgeries, procedures, family history of cardiovascular diseases, blood pressure, diabetes, cancer, or other hereditary conditions.
Non-disclosure leads to serious issues at the time of claim filing. Once the correct information is shared, you will be free of complications arising due to false details during settlement.
Your yearly medical checkups are good.
Updated health information keeps you and your insurer posted about your current health conditions. At times, health checkups might also be sponsored by the insurer. These test results allow the insurer to understand the current situation of the policy buyer and decide the premiums.
Medical checkups are crucial in improving transparency and eliminating complications arising due to non-disclosure.
Importance of nominee details.
In the event of an insured’s death, the insurance payout is remitted to the nominee’s account. This means nominee details must be filled in properly and updated if required in the life insurance term policy. Nominees may be changed according to the policy conditions, but there should be at least one nominee added to the plan.
All other requisites in place, if you have the nominee details updated, the settlement process will be smooth as the company knows the settlement recipient. Therefore, it is suggested that you update the nominee details like name, address, contact details, etc., on the policy documents.
Choose your nominee wisely. For a married person, the nominee can be a spouse or children (in the case of a minor, you must mention the guardian). If you are single, you can designate your parents or legal guardian as your nominee.
Disclosure of existing policies
At times, insurance claims are rejected because the insured person missed disclosing details about other insurance policies they have purchased. Disclosure about any other life insurance term policy should be made in the application form and is crucial when applying for a new one.
Don’t waste time.
As soon as you can, call up the insurer to inform them about the situation and file the claim. If you have an online term plan, take assistance from the support desk on the formalities to be completed.
If you purchased the policy from an agent, inform the agent of the situation and take help when filing a claim.
Get the documents in order, take help.
As you inform the insurer, you will be asked to provide certain documents so that the claim can be processed. The list of documents will be shared with you. Some documents are:
The death certificate.
Original term plan documents.
Address proof, etc.
Once the formalities are completed, the company will take up to 90 days to process the documents and settle the claim.
One of the tricks to evaluate the quality of an insurer is to look at the claim settlement ratio. The higher the number, the better the insurer.
Life insurance term policies come with various benefits and should be considered based on individual requirements. Insurers with a high claim settlement ratio ensure good service and long-term association benefits. Getting a smooth claim settlement experience starts with following some of the practices mentioned above. This ensures that, when needed, the process goes smoothly, and payout can be disbursed quickly, making it readily available for use.
There are various term insurance plans available with TATA AIA Life Insurance, and depending on your needs, you can select the one that suits you the best. You can start at any time; the earlier, the better. You can choose from various premium frequencies according to your convenience.
TATA AIA Life Insurance has a very good claim settlement ratio of 99.06% for FY19-20. We constantly strive towards improving the claim settlement ratio so that our customers win every time.
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The products are underwritten by Tata AIA Life Insurance Company Ltd.
The plans are not a guaranteed issuance plan and it will be subject to Company’s underwriting and acceptance.
For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
This document is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. This document is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
Every effort is made to ensure that all information contained in this document is accurate at the date of publication, however, the Tata AIA Life Insurance shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.