Life is uncertain. The loss of a beloved person, not only leaves you bereaved, but with the stress of re-arranging your life – financially and emotionally it make all the more difficult. Making a life insurance claim ratio is one of the starting points of re-arranging life and it is important to do it the right way. The wrong moves can lead to a decline in the claim which can have long term effects in your life.
A life insurance claim can also be made when a policy attains maturity. While the process of submission of the claim remains more or less the same in both cases, death claim will require more number of documentation and more amount of time than a maturity claim.
In this article, we have put together a few helpful life insurance tips to ensure your claim is filed the right way and you get back what you deserve.
Steps to make a Life Insurance Claim
Following are the life insurance tips to follow for making a successful life insurance claim:
- Obtain the original policy document: A life insurance claim cannot be made if you do not have the original policy document in your hand. If you are not aware of where the same is kept, try the places where other financial documents are kept. If you are still unable to locate it, contact the insurance company or the agent who sold it to you. An agent can also guide you on the claim submission process.
- Get in touch with the insurance company: Once you have the policy document in your hand or at least have the policy number with you, get in touch with the insurance company claim submission team. The client service executive will guide you on what you need to do. They will also tell you all the documents that are required for filing the claim.
- Documents required: In case of a maturity claim, the policy holder makes the claim. Hence, in most cases the documents required are simple and include the identity and address proof of the policy holder, the original policy document and cancelled cheque of the bank account where the claim will be credited. In case of a death claim, however, the documents mostly include copies of the death certificate, identity and address proof of the claimant, medical certificates like cause of death, hospital bills, certificate of cremation, certificate of employer and others as requested by the insurance provider.
- Collect all the documents: Documentation is an important part of the claim settlement process. Take a written checklist from the company representative and collect everything that is mentioned there. If you do not have a certain document, we recommend you to arrange for it. Submitting the correct documentation at one go will speed up the process of claiming life insurance.
- Submitting the documents: Submit documents as per checklists. It is suggested to keep a photocopy of all the documents submitted including original policy document with you. Do not forget to get the photocopies stamped as ‘Received’ by the insurance service agents. Service agents are also human, they handle thousands of papers every day. It should not happen that your claim gets delayed due to misplacement of a paper at their end.
- Choose the method of payment: Read the life insurance document carefully to know exactly what is the method of payment in your policy. Usually the payment is given in a lump sum, however, in some policies, there may be options of receiving payments in instalments. Choose the payment method that suits you.
- Await Payment: Insurance companies make payment only after verifying everything is in order. This process might take few weeks. Keep in touch with the insurance company to know if they need any more documentation with regards to your claim to avoid unnecessary delays.
Common reasons for claim refusal
While we have covered the ways for claiming life insurance, it is important to know that not all claims are accepted by the insurance company. In India, LIC has the maximum claim settlement percentage while the private insurance providers lack behind. In most cases, the refusals come in case of death claims rather than maturity claims. There are several reasons why life insurance claims are usually denied, here are a few common ones:
- Inaccurate disclosure by the insured person: More often than not, people buying an insurance policy does not make correct disclosures or is misguided by the agent. It is most important that all disclosures made in an insurance policy are absolutely correct and true to its core. Incorrect disclosure cause immense problems for the beneficiary.
- Death claims made within exclusivity period: Most policies have an exclusivity period within which death claims cannot be made. In most cases, this time period is 2 years. Claims made within this period are susceptible to refusal.
- Large death claims: Larger death claims are investigated separately because the chances of fraud are higher. Hence, it is better to have several insurance policies rather than having one insurance policy with a large sum assured.
- Insurance Issuer: The amount of claim settlement affects the performance of a company. In cases of large issuers like LIC, this does not pose a problem since their number of open policies are high and therefore, the number of claims does not affect their profitability. In case of smaller companies, the number of policies is lower, therefore, any claim can affect their performance vastly. Hence, the number of refusals is higher in cases of smaller companies.
We hope this article helps you follow the right steps while making a claim, whether death or maturity. You can browse our website to read more about various aspects of life and general insurance and benefit from the knowledge of our experts.