IRDAI reports show that on an average, a significant percentage of life insurance claims remain pending for over 12 months before final settlement. Despite the fact that claim settlement ratios in the last three years have been above 90% on an average, a lingering matter of concern is the long waiting period for claims. This defeats the core purpose of life insurance, i.e. timely disbursement of the death benefit to the insured’s family when the need arises.
Policyholders and beneficiaries often have to battle obstacles in the smooth settlement of life insurance claims. Though it is true that the final responsibility of claim settlement lies with the insurance provider, it is also true that policyholders too can do their part to simplify and expedite matters.
These simple tips can guide you towards a quick and hassle-free claim settlement process:
1) Avoid Ambiguity
Be completely honest, give accurate and complete details, and never withhold essential details while filling your insurance form. After filling all details, crosscheck to ensure that you have left no room for ambiguity and errors. Be upfront about past and existing health conditions, and lifestyle-associated factors like drinking habits, smoking, etc. Also make sure that you always fill the policy application form yourself – do not make the mistake of allowing your insurance agent to fill it on your behalf. The smallest error or incorrect fact in the insurance policy application form can cause major problems during claim settlement.
2) Know Your Policy Inside Out
It is very important to read the life insurance policy document thoroughly. Along with giving you a sound understanding of its features, clauses, inclusions, and exclusions, this will also familiarise you with the formalities and pre-requisites to file claims. It is also crucial to know the beneficiary’s rights and stay informed about the redressal mechanism at your disposal.
3) Update Regularly
After buying an insurance policy, it is important to keep updating it regularly (if required), so that it reflects latest details like changed contact numbers, address, names etc. If there is a change in the beneficiary, make sure you notify your insurance company about it. Keep proofs for all the modified/additional details of the policy. This will allow the insurance company to contact you easily, ensuring you do not face hassles during the claim settlement process and otherwise too.
4) Understand the Claim Settlement Process
You as a policyholder and all members of your family must know the claim settlement process and the documentation, formalities and all other associated requirements therein. Being prepared in advance aids in smooth execution of the claim settlement process when the time arrives.
5) Educate the Beneficiary
After you, as the policyholder, have gained a sound understanding of the insurance policy and claim settlement procedure, you need to educate the beneficiary as well. The beneficiary must understand all details of the policy, know the sum assured, and be aware of the claim procedure, clauses and exclusions therein.
The beneficiary should also know where the policy documents are kept. It is best to categorise them and have appropriate labels so the beneficiary has no difficulty finding them when required.
6) Ensure Timely Intimation
Before filing a claim, you are required to make an application to intimate the insurance company so they can initiate the claim settlement process. You can download the latest claim intimation form from the insurer’s website, and in the absence of the online option, you need to visit the insurance company’s office to obtain the form.
7) Keep Documents Handy
Keep your insurance policy and claim-related documents organized, safe, and always at your disposal. When making a claim, submit the claim documents well in advance, as last-minute paperwork poses problems and causes delay. If any documents go missing during the claim filing process, it adds to the tediousness and leads to wasted time. Also ensure you submit the documents in line with the kind of life insurance claim being made – death, maturity, or rider.
Life insurance companies typically require policy documents, age proof, and death certificate – additional documents may be needed as per the insurance company you are dealing with. Being fully aware of the documents required ensures a smooth claim settlement process.
8) Take Timely Action
IRDA has made it mandatory for insurance companies to settle claims within 30 days of receiving all the necessary documents. Within six months of getting the written intimation, all formalities required by the insurer should be completed. If all goes well, the policyholder receives the claim within the promised 30 days, which is usually via Electronic Fund Transfer (EFT) these days.
9) Get an e-Insurance Account
Opting for an e-insurance account is a good idea as it minimises paperwork and keeps your policy documents and information streamlined along with easy, 24/7 access.
Claim settlement is an integral aspect of life insurance - follow these simple tips and make it smooth sailing.