Nominees have to go through a cumbersome claim process when material facts are not disclosed in the proposal form. You, therefore, need to be careful while filling a proposal form as any error might deny a death benefit to your family when they need it the most. Here are a few points to consider for speedy settlement of life insurance claims.
Proposal Form. Don't let your agent fill the form. Not only it keeps you informed about policy details it also helps in avoiding any after-sale shock. It is, therefore, recommended to fill out the form yourself. It ensures that you are aware of the policy details. Also, when you get the policy documents cross check it. In case of any mismatch you have the right to cancel the policy within 15 days from the date of receiving the policy documents. The period is called free-look period.
Correct Documents. Any irregularity later can trouble a beneficiary at the time of claim settlement. Therefore, make sure that you submit correct age proof and medical details. The claim is likely to get denied if it is revealed later that wrong documents were submitted at the time of buying a policy.
Disclosures. If the claim occurs within three years from the date of risk, or from its revival, insurance companies normally classify it as an early death claim. In such cases insurance companies carry out a detailed investigation. Claims made within 3 years might get rejected on the grounds of non-disclosure and misrepresentation and additional documents may be called for in order to make certain that material facts were not suppressed at the time of proposal. Therefore do not withhold any material information such as pre-existing medical conditions or other life insurance policies that you hold, as any mismatch in information can lead to denial of claim. Apart from pre-existing diseases you should also be truthful about your tobacco and alcohol consumption levels.
Pay Premium Regularly. It is very important to pay your premiums regularly to keep the policy in force. If a policyholder fails to pay a premium on a policy and the policy lapses then the insurance company is not liable to pay the full sum insured. Such a lapsed policy, however, can be made a paid up policy (in case of traditional plans). In a paid up policy the sum insured is reduced to an amount based on the amount of premiums already paid.
Appoint a Nominee. It is not compulsory to fill nomination details. But having filled it saves you later from the exercise of running from pillar to post. For example insurance companies ask for a succession certificate in absence of nomination. The process for obtaining a succession certificate can be cumbersome and time consuming for a nominee. Moreover, the nominee should also be informed in advance about whereabouts of the policy documents.