Just a simple question. Why do you avail life insurance? Is it not to enjoy a hassle-free claim? If this does not happen and you are forced to run from pillar to post, then why avail a life insurance plan at all? Among all life insurance plans, term life insurance is perhaps the most important. This is pure risk cover. If the breadwinner meets an untimely end, the nominees get the money called death benefits to maintain current lifestyle.
You have to pay a premium and you get cover (protection) for a fixed time period, called tenure of the term insurance plan. If a policyholder dies within the term of the plan, nominees get the sum assured also called death benefits. If you survive the term of the plan, you get nothing.
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1. Fill the proposal form yourself
The biggest mistake you can make? Trust that smiling life insurance agent and allow him to fill the life insurance proposal form on your behalf. The proposal form is a contract between you and the life insurer. The insurer seeks information on you and this is filled in the proposal form. The proposal form seeks name, age, address, education and employment details. It also seeks medical history and your income.
If the life insurer finds that you have not disclosed all relevant/important information, or have withheld crucial facts like you are a smoker/drinker and this has not been disclosed, the insurer will reject claims on grounds of non-disclosure of material facts.
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It’s very important to fill the proposal form honestly. If you are a smoker/drinker or have pre-existing diseases or adverse medical history, this information must be disclosed in the proposal form. If you conceal this crucial information, the life insurer could reject the claim.
3. You must pay premiums on time
If you don’t pay premiums on time, the life insurance policy would lapse. If your policy lapses, you are no longer covered by the life insurance plan. All the premiums you have paid on the life insurance plan in the past years, will be a waste. If your term life insurance lapses, your family will be left without crucial risk cover. Late payment of premiums could mean a penalty and there are reinstatement charges on a lapsed policy.
When you are stuck in a medical emergency, the last thing on your mind is contacting the insurer. This is why you need a trusted relative, friend or colleague to do the job. This person will contact the insurer, in case you forget or are unable to do so. Most insurers require that you contact them within 24 hours of the medical emergency.
Faster you intimate the insurer, faster the claim settlement. The insurer believes that a delay in intimation could be cause for a potential fraud.
5. Make sure nominee information is updated
If you have availed a life insurance before marriage, you might have made parents the nominee. After marriage, make sure you update the nomination and make spouse the nominee of the life insurance plan.
6. Willingly accept medical tests
The life insurer may require that you undergo medical tests and even pays for them. You must willingly undergo these medical tests for your own good. When the claim is made, the life insurer will have a good idea of your medical history and the claim will be easily settled. Be Wise, Get Rich.
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