Do not make the hasty choice of taking a policy from the insurer offering lowest premiums alone
My neighbour’s father died a few months ago and since then I have been meeting them frequently. I figured that the claim on a life insurance policy taken by the deceased is taking unusually long. What makes claims on life policies late? I am worried how my family will cope if they face something similar after I die?
Radheyshyam Gupta, Noida
Usually the paperwork for a death claim is straight forward—one needs to inform the insurer, fill up the claim form and include other details such as cause of death, death certificate, policy details and the policy certificate. Supplementary information may be sought by the insurer depending on the claims settlement procedure followed by them.
In case of policies with high value of life cover in a short time span from the date of the policy issuance, insurers may wish to explore more details on the cause of death. In case the death was unnatural or within a year of the policy being taken, they may dig in for more details from the family of the deceased. When it comes to claim settlement, insurers would want to make very sure that the claim is genuine and not, say a case of suicide or any chronic ailment. In case of chronic ailment, which was not mentioned in the policy at the time of taking the policy, the insurer has the right to deny the claim owing to suppression of facts when taking the policy. Common suspicions are around the smoking status of the individual and pre-existing conditions such as hypertension, high cholesterol, and diabetes.
You should be concerned on the claims experience of an insurer before taking a policy from them. Do check the claim settlement experience reported by the IRDAI, which varies from 60-80 per cent across insurers. Do not make the hasty choice of taking a policy from the insurer offering lowest premiums alone. Do check about claim settlement as well when taking a policy. Inform your family members of all the paperwork pertaining to your policy for a smooth settlement if something were to happen to you.