Life insurance policies are an essential instrument to invest in, to protect your family’s well being in your absence. While there are several different kinds of life insurance plans available on the market, term plans, in particular, are becoming increasingly popular, since they are simple and offer easy-to-understand terms.
Term insurance is considered to be the cheapest and purest form of life insurance. Term plans not only offer benefits to dependents upon the policyholder’s death, but also ensure that benefits are available to policyholders while opting for the policy. These can include tax benefits under the Income Tax Act, 1961.
However, claims submitted on term plans can be rejected by insurers on several grounds which can be easily avoided by policyholders. There are several mistakes that policyholders make during the process of opting for the policy which leads to the rejection of claims made by their dependents. Fortunately, it is possible to avoid these mistakes by being vigilant and looking out for these common mistakes to avoid. Read on to learn what these common mistakes are, and how they can be avoided.
1. All requisite information must be revealed:
“Concealment of information” is something that can lead insurers to reject claims made for life insurance policies. This includes all information pertaining to the health of the policyholder, including hospitalization. When claims are made, the insurer will check your documents to verify whether you have any habits that could have resulted in this disease to occur. If the insurer finds that the disease was caused by the policyholder’s habits, such as smoking or drinking, which was not revealed to the insurer, they are at liberty to reject claims made for insurance. Premiums paid towards the insurance policy are also dependent on the facts provided to insurers, so it is necessary to be honest while furnishing all the information to the insurer.
2. Pay premiums in a timely manner:
Life insurance policies, and especially term plans, can lapse if premiums are not paid in a timely manner. It is necessary to pay premiums within the time period indicated by the insurer, in order to ensure that the benefits of the policy are still accessible and that claims cannot be rejected by the insurer. Opt for the iSelect Star plan, through Canara HSBC Oriental Bank of Commerce, to avail flexibility in terms of frequency of premium payments which you can customize according to your personal requirements.
3. Nominee Information has to be up-to-date:
The information provided to the insurer has to be completely up-to-date with the latest information, and this includes details of the nominees who can raise claims. If the nominee information available with the insurer does not match the actual dependents, they will not be able to get payouts on maturity of the policy. The insurer will reject the claims if there is any mismatch in the information available with them and those being cited by the dependent.
4. Avoid delays in making insurance claims:
While filing insurance claims may be the last thing on your mind when a loved one, especially a parent or spouse, expires, it is essential to file term plan insurance claims at the earliest. The earlier it is made, the easier the claim processing will be.
5. Fill out the insurance application form yourself:
It is always best to fill out the insurance application form yourself. Even while insurance agents will offer to fill in your details themselves, it is best to do this yourself as it lets you ensure that the correct information has been furnished to the insurer. A major reason insurance claims are rejected is because the information available with the insurer does not correspond with the correct information concerning the policyholder’s health or even details about the dependent nominees. Today, it is much easier to fill in the insurance details yourself owing to online applications which offer increased convenience for policyholders.
6. Thoroughly read the policy’s fine print:
An insurance document comes filed with fine print, which is additional information that includes the terms and conditions of your insurance policy. This fine print can often include the information you need to keep in check in order to ensure that claims are not rejected by the insurer. The fine print also includes details on cases where the claim may be rejected, so make sure to understand the terms thoroughly before signing up for the concerned term plan.
An insurance policy can prove very useful during distressing times, and it is essential that the claims made to the insurer are not rejected especially since this can prolong the time taken by the insurer to process the claim. Opt for the iSelect Star plan, available on Canara HSBC Oriental Bank of Commerce, to avail benefits in a transparent manner. Not only can you apply for this policy online in a seamless and transparent manner, but you can also avail benefits for your spouse and dependents at discounted rates.