While insurers strive towards paying all genuine claims at the earliest, customers should take a few measures to avoid repudiation and ensure hassle-free claims settlement
From financial planners to money gurus, the one standard tip you’ll always get is to buy a life insurance policy. It is that one product that would come to your rescue in case of any unfortunate event. While having life insurance is a must, claim settlement is the moment of truth for any policyholder.
Most people shy away from buying life insurance because of the perception that it is a sunken cost and claims could get denied. However, insurers continuously strive to maintain a high claim settlement ratio as it is indicative of the insurer’s financial health and performance. Claim settlement ratio reveals the percentage of claims settled by an insurer against the percentage of claims filed. Insurers take pride in a high ratio and therefore, strive towards paying all genuine claims at the earliest.
In 2018-19, life insurers settled 8.43 lakh claims on individual policies and paid Rs 17,365.30 crore. In the same year, private insurers’ claim settlement ratio rose to 96.64 per cent from 95.24 per cent in 2017-18. The industry’s efforts towards claims settlement is evident from these numbers. However, there is an assumption that getting claims settled is a cumbersome task. While insurers pay all genuine claims, customers should take a few measures to avoid repudiation and ensure hassle-free claims settlement.
Nature of the policy: It is essential to understand product features, benefits, premiums payable and payment terms. While buying a policy, ensure that the chosen sum assured and tenure align with your income level, age, current and expected financial commitments and standard of living. Timely and regular premium payment is critical to policy continuity. Claims are not entertained for a lapsed policy.
Uberrimae Fidei: Insurance contracts are solicited on the principle of ‘Uberrimae Fidei’ which means ‘utmost good faith’. This assumes that customers’ material facts and information at the time of policy purchase are accurate. Claims are mostly rejected following non-disclosure or misrepresentation of facts. It is advisable to correctly disclose all details, including smoking and drinking habits. It eliminates chances of claim repudiation.
Filling the proposal form: Most customers prefer buying policies from agents or their bank relationship managers. They help choose the right product and understand the proposal form. However, it is advisable to fill the form yourself and ensure all details shared are correct.
Further, state the nominee and beneficiary details clearly and mention the share of the sum assured they are entitled to. It is also advisable to keep the family informed about policy details and filing claims process for faster claim settlement.
In the event of policyholder’s death, the nominee must inform the insurer early through an email or a call to their helpline number with policy number, name, place and cause of death. Keeping the insurer informed will expedite claim settlement. At Exide Life, we continuously work towards settling claims within the same day if all requirements are met.
Upon informing the insurer, the nominee or the beneficiaries must fill the claim form and submit necessary documents. Once the required documents are submitted, the insurer will work on settling the claim expeditiously. Note that a few additional documents would be needed in case of missing persons or accidental death.
To eliminate the chance of disputes or repudiation of claims, read and understand your policy’s terms and conditions. Ensure that you are transparent with your insurer. Ticking these boxes and doing some necessary checks will help get your claims settled without a hitch!
The author is Chief Operating Officer at Exide Life Insurance