A life insurance acts as a financial cushion that presents economic stability to your loved ones if anything unfortunate happens to you. However, what happens when an owner of a life insurance policy dies as soon as they purchase the policy? Will their beneficiaries still claim the insurance? All these questions can pop up in your mind while you buy life insurance.
A life insurance provider is contractually bound to pay the stipulated mortality benefit regardless of when the policyholder dies, whether two months or twenty years after the policy gets purchased. While the purpose of life insurance is to present coverage in case of the insured person's sudden death, if the insured departs within a year or two of acquiring their insurance policy, the insurance provider will look for ways to avoid settling the claim.
This especially happens if the information on the primary insurance application was fallacious or if it seems that the policyholder might have committed suicide.
How to Claim a Life Insurance Policy?
After the first payment of the life insurance policy, your time of death doesn't matter. You will most likely be covered. And the beneficiary will be allowed to claim your life insurance benefits. However, before making a claim, understand the provisions of the insurance company on how long does a beneficiary have to claim a life insurance policy and also consider some of these points below:
1. Getting a Death Certificate
After the insured person's death, the beneficiary must get a certified copy of the death certificate. The location, dates, and time of death get specified in this legal document. The cause of death is also named. This helps the insurance company to verify the cause of death.
2. Contacting the Life Insurance Company
If you know the insurance agent, contact them immediately. You can also contact the Insurance company to claim the death benefits. And if you know nothing, then the National Association of Insurance Commissioners (NAIC) has a locator service that will help you find the insurance company. The company might also try to contact you, but sometimes it takes time to know that person is deceased.
3. Filling out the Form for Death Claim
In the end, the company needs the beneficiary to fill the form for a death claim. If no death claim gets filed, then there will be no benefits. Hence, to get the insurance claim, immediately fill the specified form to receive the mortality benefits.
4. Wait for the Insurance Company to Review a Claim
Normally the life insurance company takes up to 30 days to review your claim. Once the review gets completed and all the documents are verified, the insurer decides to settle or refuse the claim.
Two Reasons your Life Insurance won't Payout
Mentioned here are some reasons why life insurance won’t payout if you die right after purchasing a life insurance policy.
1. Wrong Disclosure of Medical Records
If the policyholder dies within the contestability period (the initial period after purchasing the insurance), the insurance company holds the right to check your medical records. The insurance provider can conduct a complete examination of the individual's medical records and the other information submitted with the application. If any medical data has been excluded in applying for a policy, the insurance company has the right to refuse claims or reduce the death benefit.
2. Suicide Clause
The suicide clause in the life insurance policy mentions that the policyholder cannot commit suicide within the contestability period. If failing to do so, the insurance company will hold every right to reject the claim of your beneficiaries.
Top Life Insurance Plans by Canara HSBC Life Insurance
Canara HSBC Life Insurance helps you to pay the monthly expenditures of your loved ones and ensure that your family may achieve their future goals even when you are away. Mentioned below are some best life insurance plans you can contemplate buying in 2021.
1. iSelect Smart360 Term Plan
The iSelect Smart360 Term Plan by Canara HSBC Life Insurance is a highly flexible term plan that provides extensive coverage and can easily get aligned as per your life goals. It also offers multiple rider benefits, option to choose coverage for your spouse, and flexible premium payment term.
2. Invest 4G Plan
Invest 4G plan by the Canara HSBC Life Insurance is a Unit-linked insurance plan that allows you to fulfil all your set long term goals by providing higher returns on your investments. It offers option to pay premium monthly, half-yearly or annually, systematic withdrawal option to generate additional income, wealth boosters and loyalty addition options
3. Guaranteed Savings Plan
Guaranteed Savings Plan by Canara HSBC Life Insurance is yet another most comprehensive term insurance plan that helps you receive a guaranteed sum to fulfil your financial obligations and hold better control over your funds. Get your savings horizon tailored as per your significant financial goals, life coverage for the entire term by paying premiums for a limited time, flexibility to select a premium payment term.
By investing your funds in life insurance, you can protect your family and give them the highest value of your hard-earned savings in case of your unfortunate demise. So what are you waiting for? Get a life insurance policy today.