I am 38 years married and residing with wife and 2 sons in Davangere. I had availed a term life insurance plan 3 years ago to safeguard my family in case something happens to me. Recently a colleague told me she faced a lot of problems with the claim settlement. Her husband had passed away within a year of availing a term life insurance plan. I am worried that my wife could face a problem with the claim settlement?
Claim settlement varies depending on the insurer. You must select an insurer that has settled at least 90%-95% of their death claims. Also check the number of grievances raised against the insurer. If there are a lot of grievances against the insurer, its best not to opt for a term insurance plan with them. Since it is natural for grievances to increase with the book size of the insurer, also check for the number of lives covered by the insurer. Opt for insurers with low grievance to lives ratio. Insurers generally ask a lot of questions if: 1. It is an unnatural death in the first year of the policy. 2. The person has died because of an accident, but the insurer wants to make sure it's not suicide. Suicide is not covered for the first year of the term life insurance plan. 3. The person has died of chronic illness/ailment within 5 years of availing the term life insurance plan. The insurer would want to verify whether the information submitted at the proposal stage by the insured was accurate or not. Common suspicions are around the smoking status of the individual and pre-existing conditions such as hypertension, high cholesterol, and diabetes.
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