Term insurance is a crucial investment for securing your family’s financial future in case of your untimely demise. However, it’s essential to ensure that your beneficiaries receive the claim payout without any hiccups.
Table of Contents
How to Claim a Term Plan?
In case of the unfortunate event of the policyholder’s demise during the term of the policy, the nominee or the beneficiary can claim the term plan benefits.
Here’s how to claim term insurance:
1. Intimate the insurance company:
The first step is to inform the insurance company about the policyholder’s death. This can be done by contacting the insurance company’s customer care or through the agent who sold the policy. The nominee will be required to submit a claim intimation form along with the necessary documents, such as the policy documents, death certificate, and ID proof.
2. Submit the claim form:
The nominee or beneficiary will have to submit the claim form, which can be downloaded from the insurance company’s website or obtained from their office. The claim form should be filled in with accurate details and signed by the nominee.
3. Submit the required documents:
Along with the claim form, the nominee will have to submit the necessary documents, such as the policy documents, death certificate, and ID proof. It’s essential to ensure that all the documents are in order, as incomplete or incorrect documents can lead to claim rejection.
4. Wait for the claim processing:
Once the claim form and documents are submitted, the insurance company will start the claim processing. The claim settlement process usually takes 30 days from the date of submission of all the necessary documents.
5. Receive the claim amount:
If the claim is approved, the insurance company will transfer the claim amount to the nominee’s bank account. In case of any discrepancies or issues, the insurance company may ask for additional documents or information.
It’s essential to keep in mind that claim settlement is subject to the terms and conditions of the policy. In case of any doubts or queries, it’s best to consult with your insurance agent or the insurance company.
Lets explore how to avoid term insurance claim rejection.
Reason 1: Misrepresentation of Information
One of the most common reasons for term insurance claim rejection is the misrepresentation of information. It’s essential to provide accurate and complete information when filling out the policy application form. If you provide incorrect information, such as hiding a pre-existing medical condition, the claim may be rejected.
Tips to avoid:
Fill out the application form accurately and truthfully.
Disclose any pre-existing medical conditions, habits, or lifestyle factors that may impact your health.
Update your policy details regularly to reflect any changes in your health or lifestyle.
Reason 2: Non-Disclosure of Information
Another reason for term insurance claim rejection is the non-disclosure of information. If you fail to disclose any relevant information, such as a pre-existing medical condition, the claim may be rejected.
Tips to avoid:
Disclose all relevant information on the policy application form.
Keep your policy details up to date and inform the insurance company of any changes in your health or lifestyle.
Reason 3: Policy Lapse
If you fail to pay the premium for your term insurance policy, it may lapse, and the claim may be rejected.
Tips to avoid:
Set up automatic premium payments to avoid missing any payments.
Ensure that you have sufficient funds in your bank account to cover the premium payments.
Renew your policy before the due date to avoid any lapse in coverage.
Reason 4: Death Due to Exclusions
Term insurance policies come with certain exclusions, such as death due to suicide, drug overdose, or participation in hazardous activities. If the policyholder dies due to any of these exclusions, the claim may be rejected.
Tips to avoid:
Read the policy document carefully to understand the exclusions.
Avoid participating in hazardous activities that may be excluded from the policy coverage.
Reason 5: Late Claim Filing
If you fail to file the claim within the specified timeframe, the claim may be rejected.
Tips to avoid:
Inform your beneficiaries about the policy and the claim process.
Ensure that your beneficiaries have all the necessary documents to file the claim.
File the claim as soon as possible after the policyholder’s demise.
Conclusion
By following these tips, you can avoid common reasons for term insurance claim rejection and ensure that your beneficiaries receive the claim payout in case of your untimely demise. Remember to provide accurate and complete information, keep your policy details up to date, pay the premiums on time, and understand the policy exclusions. In case of any doubts or queries, it’s best to consult with your insurance agent or company.
It’s also essential to review your term insurance policy periodically to ensure that it still meets your financial goals and requirements. If you’ve experienced significant life changes, such as marriage, the birth of a child, or a change in your income, you may need to update your coverage. You can use a term insurance calculator to know the premiums. Lastly, keep your beneficiaries informed about your term insurance policy and the claim process. Make sure that they have all the necessary documents and information to file the claim smoothly. By taking these steps, you can ensure that your loved ones are financially protected, even if you’re no longer around to support them.
