Jan 03, 2017,16.52 IST

Keep these in mind for smooth settlement of life insurance claim

Moneycontrol Bureau

Rejection of life insurance claims can be devastating for the family who has lost a bread earner and dependent on financial security through the insurance policy bought by the deceased.

However, insurance companies often reject claims, sometimes on flimsy grounds, to the extent that the President of the National Consumer Disputes Redressal Commission (NCDRC), Justice D K Jain recently said that insurers ‘lack heart’ while dealing with such claims.

While Indian insurers have a healthy claim settlement ratio, some in the high 90s in terms of percentage of claims settled, you should try and make sure that your family is not the one being denied the money when you are no longer around to stand by them.

So, what are the steps you should ensure while buying a policy? Insurance experts say that among the measures is to provide full and honest information to the insurer and not try and hide any medical condition.

“The insured must provide correct information and designate a beneficiary. Premiums have to be paid on time. Equally important is the need to provide required documentation and get the required medicals done,” Pushkaraj Shete, CEO, Claimvasooli.com told Moneycontrol.

Shete says death claims can also be rejected when you fail to keep up with policy premiums or make material misrepresentations on the policy. “Claims may also be rejected if death has happened during the waiting period or when the type of death wasn't covered in the policy,” he said.

Naval Goel, founder and CEO, PolicyX.com, says contrary to popular belief insurance companies would prefer to settle claims rather than decline payment. “Insurance companies are is not inclined towards holding back of claims. In fact they are motivated to pay as soon as possible after receiving bona fide proof of death, to avoid steep interest charges for delaying payment of claims,” Goel said.

He pointed out the main reason for rejection of claims is when facts are deliberately suppressed by the policyholder at the time of buying the policy. The claim is rejected on the ground of non-disclosure of material facts.
Goel listed out a series of steps a policyholder should take before and after buying a policy to ensure that future claims go through smoothly.

Dos and Don’ts before Taking Policy

• Fill the proposal form carefully and mention all the details clearly
• Do not hide medical history
• Do not hide facts like consumption of tobacco or alcohol,
• If your profession involves risk mention it in the application form
• Do not avoid medical tests
• Read all policy terms and conditions
• If possible, consult a financial advisor

Dos and Don’ts after taking policy


• Keep the nominee details updated in case of change
• Pay premium on time
• Provide the mandatory documents and any other documents required to the insurer at the time of filing the claim
• Don’t delay filing insurance claims
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