Top 7 Tips for A Smooth Life Insurance Claim Settlement

2020-05-13

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Buying life insurance means providing financial security to your family and clearing off any debts/liabilities by helping your family when you are not around. Thus, one must buy a life insurance policy with a high claim settlement ratio as it not only ensures your family’s financial security but also saves them from the hassles faced at the time of filing a claim. Many of us are under the impression that settling down claims is the responsibility of the insurance company. But we should remember that policyholders also play an important role in simplifying the process.

KeyTakeaways

Always inform the insurer promptly in case of a claim to avoid delays.
Keep all important policy documents organised and updated.
Never hide or misrepresent any personal, lifestyle, or health information.
Make sure your nominee knows the policy details and claim process.
Understand your insurer’s claim settlement process and ratio before purchase.

Thus, here are a few simple tips that can guide you towards a smooth life insurance claim settlement.

Intimate the Insurance Company on Time: This is the first and foremost thing to do for a smooth claim settlement process. In case of the death of the policyholder, the nominee or beneficiary should inform the insurance company about the incident on time in order to avoid any delays. All you need to do is to inform your insurance company either by call or e-mail.
Keep All Your Documents Organised: Once you have informed the insurance company, the next step is to provide certain documents. Keep all your documents in place because if any document goes missing while filing a claim, then it may take time to initiate the process. It’s good to submit the documents beforehand, in case of a demise or maturity benefit.
Provide Accurate Details: One must be accurate about all the details that one provides while filling out an insurance form. Once you have filled in all the details, the next thing you need to do is to cross-check them and make sure that there is no error or false information. Moreover, you should be honest about your past and existing health conditions. And if you have a habit of smoking and drinking, then mention it too. A small mistake or anomaly can cause major issues during claim settlement. Therefore, you should clearly mention your current health condition and smoking/drinking habits, as many people assume that if they mention correct information regarding their lifestyle, then their policy might get rejected. However, that’s not the truth. You may have to pay higher premiums, but your policy will not be rejected. One must never hide anything about their health and lifestyle, as it’s better to pay higher premiums rather than get their claim rejected after paying premiums for a longer time.

Also Read - Claim Settlement Ratio

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Read Your Policy Documents Thoroughly: It is very important to read about your policy documents carefully, as this will not just help you know about its inclusions and exclusions, but you will also get an idea about the dos and don’ts while filing a claim.
Understand the Claim Settlement Process: As a policyholder, you must know everything about the claim settlement process, right from documentation to other requirements associated with it. This includes knowing what documents need to be submitted, the timeline involved, whom to contact, and how to track the status of the claim. Being aware of each step, right from informing the insurer about the claim to receiving the payout, can help you and your nominee avoid unnecessary delays or confusion during an already difficult time.
Update Your Policy From Time to Time: Always update your policy so that it includes all the latest information. Everything, from name, address, to contact number and health condition, should be updated in the policy in case of any change. And if there’s any change in the beneficiary’s name or address, then you must also inform your insurance company as soon as possible. Also, you should keep the proofs of the same.
Educate the Nominee About Your Plan: Once you understand the policy and its claim settlement procedure, the next important thing you need to do is to make your nominee fully aware of the policy terms and conditions. They should know everything about the policy, right from the premium amount, policy details, to the sum assured. Moreover, the nominee should also be aware of all the inclusions and exclusions outlined in the policy.

Must Read - What is an Insurance Claim?

On the whole, these are a few simple tips and tricks that everyone must follow for a quick and hassle-free claim settlement process. Before buying an insurance plan, one must look for an insurance company with a good claim settlement ratio. With iSelect Smart360 Term Plan by Canara HSBC Life Insurance, you can get life coverage along with optional accidental death/disability benefits and an increasing cover option.

Why Claim Settlement Ratio Matters

One of the most crucial factors to consider before purchasing a life insurance policy is the Claim Settlement Ratio (CSR) of the insurer. This ratio reflects the percentage of claims successfully settled by an insurance company in a financial year compared to the total number of claims received. For example, if an insurer has a CSR of 97%, it means 97 out of every 100 claims were paid out.

A high claim settlement ratio is a strong indicator of the insurer’s reliability and efficiency in honouring its promise to policyholders. It shows that the company is financially sound and has a customer-first approach when it comes to fulfilling claims. This becomes even more important during emotionally and financially challenging times for your loved ones.

You should not only check the CSR for the latest year, but also look at the five-year trend. A consistently high ratio over the years reflects stable and trustworthy claim practices. On the other hand, a fluctuating or low CSR could signal delays, stricter scrutiny, or higher rejection rates in claim processing.

Choosing an insurer with a good CSR ensures that:

Your family is more likely to receive the promised sum assured on time
There will be fewer hurdles and documentation issues during the claim process
Your dependents can maintain financial stability even in your absence

In short, the Claim Settlement Ratio is a measure of trust, dependability, and peace of mind.

Common Reasons Why Life Insurance Claims Get Rejected

Understanding why claims may get rejected can help you avoid such situations and ensure that your loved ones receive the financial support when they need it most.

Non-disclosure or Misrepresentation of Information: Claims are often rejected when the policyholder hides or provides incorrect information while buying the policy. This can include details about health conditions, smoking or drinking habits, and high-risk occupations. Life insurance is based on trust, and any misinformation can lead to problems during claim settlement.
Policy Lapse Due to Missed Premiums: If premiums are not paid on time, the policy may lapse, leaving no cover in place. Once a policy lapses, the insurer is not liable to process any claims. To prevent this, it’s important to pay premiums regularly or set up automatic payments.
Claim Filed for Excluded Situations: Every life insurance policy lists specific exclusions. These are events under which the insurer will not approve a claim. Common exclusions include suicide within the first year of the policy, death from illegal activities, or death caused by self-harm. Reading the policy document carefully helps avoid surprises later.
Delay in Claim Filing: Filing a claim too late can raise concerns or lead to unnecessary complications. While insurers do allow a reasonable timeframe, delaying the process can create confusion. It is best for nominees to start the process as soon as possible after the policyholder's passing.
Incomplete or Incorrect Documentation: Submitting the claim without all the required documents, such as the death certificate, ID proof, and medical records, can result in delays or even rejection. Keeping these documents in order and accessible ensures the process goes smoothly.
By staying aware of these common pitfalls, you can help ensure that your family gets the full benefit of the life insurance plan you invested in.

Conclusion

Purchasing a life insurance policy is a long-term commitment that goes far beyond just paying premiums. Its true value is realised only when your family can successfully claim the benefits in your absence. That’s why it’s essential to not just buy a policy but also take the necessary steps to ensure a smooth claim process.

From accurate disclosures and timely updates to educating your nominee and maintaining proper documentation, every step counts. Choosing a policy from an insurer with a strong claim settlement track record, such as Canara HSBC Life Insurance (99.38%), can significantly reduce the burden on your loved ones during difficult times.

At the end of the day, life insurance is about peace of mind for you and your family. By following the tips shared above, you’re ensuring that your policy truly delivers when it matters most.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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