How to Ensure a Hassle-Free Claim Settlement with your Term Insurance?

Berry Mathew

Updated on:

How to Ensure a Hassle-Free Claim Settlement with your Term Insurance?

According to IRDAI reports, on average, a sizable portion of term insurance claim settlements is pending for more than a year before settling. The lengthy waiting period for claims remains a source of worry, although, on average, claim settlement ratios over the past three years have been above 90%. This defeats the primary goal of life insurance, which is to promptly provide the insured’s family with the death benefit when necessary.

Policyholders and beneficiaries must frequently overcome challenges to settle life insurance claims efficiently. Although the insurance company has the final say in resolving claims, policyholders can also play a role in streamlining and accelerating the process.

You can follow these straightforward suggestions to ensure a smooth and speedy term insurance claim settlement process:

Prevent ambiguity

When filling out your insurance form, always be truthful, provide accurate information, and never omit significant information. Cross-check your work after completing all the details to avoid ambiguities or mistakes. Be honest about current or past medical conditions and lifestyle choices like drinking, smoking, etc. Please only let your insurance agent fill out the policy application form on your behalf; instead, always fill it out yourself. The slightest error or false statement on the insurance policy application form can significantly impact how claims are handled.

Become an expert in your policy

It is crucial to read the term insurance policy document carefully. This will familiarise you with the procedures and requirements for filing claims and give you a thorough understanding of its characteristics, clauses, inclusions, and exclusions. Additionally, knowing the beneficiary’s rights and the available dispute resolution options is essential.

Update frequently

After purchasing an insurance policy, it is crucial to keep it updated frequently (if necessary) to reflect the most recent information, such as changed contact information, addresses, names, etc. As soon as the beneficiary changes, inform your insurance provider. Keep records of all the policy’s modifications and additions. It will make it simple for the insurance company to contact you and ensure you don’t encounter any difficulties during and after the claim settlement process.

Recognise the claims settlement procedures

All family members, including you as the policyholder, must know the claim settlement procedure for the term insurance, including all necessary paperwork, formalities, and other requirements. When the time comes, having everything ready will help the claim settlement process go more smoothly.

Educate the beneficiary

It would be best to educate the beneficiary after you, the policyholder, have thoroughly understood the insurance policy and the claim settlement process. The beneficiary must understand all policy details, know the sum assured, and know the claim procedure, clauses and exclusions. The location of the policy papers should also be known to the beneficiary.

Ensure prompt notification

You must submit an application to the insurance provider before making a claim for them to start the claim settlement procedure. The most recent claim intimation form is available for download from the insurer’s website, and if there isn’t an online option, you’ll need to pick one up in person from the insurance company’s office. Also, check the premiums paid or due in case of maturity benefit using a term insurance calculator.

Have documents on hand

Keep copies of your insurance policies and documents about claims organised, secure, and readily available. When filing a claim, do so far in advance because paperwork submitted at the last minute presents issues and delays. The claim filing process is tedious and time-consuming if any documents are lost. Ensure the documents are submitted according to the type of life insurance claim: passing away, maturity, or rider.

According to the insurance company you are working with, additional documents might be required besides the standard policy documents, age verification, and death certificate. A smooth claim settlement process is ensured by having complete knowledge of the paperwork needed.

Consider quick action

The IRDAI requires insurance providers to resolve claims within 30 days of receiving all required paperwork. The insurer’s formalities must be completed within six months of receiving the written notification. If everything goes according to plan, the claim is delivered to the policyholder within the promised 30 days, typically via Electronic Fund Transfer (EFT).

The claims process can be smooth if you know all the necessary paperwork and procedure. In case of a return of premium claim, you can check the insurance premiums using the term insurance calculator. Do your bit to make the claim process smooth for both parties.