Life Insurance March 2, 2021

A claim settlement ratio gives individuals an impression about the insurance company from where they look to buy a life insurance policy. A high claim settlement record means a high efficiency rate of the company in settling insurance claims. Even then, such a company could delay honouring your claim if you go wrong while complying with the requirements. If that delay leads to rejection later, the feeling won’t get any better! So what are the mistakes that could make life insurance companies delay claim settlement? This is what we’ll focus on here! Pay attention to the same and stay away from such mistakes.

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Mistakes That You Should Avoid for Hassle-free Life Insurance Claims

Incorrect details while filing the insurance claim, inaccurate information regarding health conditions are some of the reasons that could force a life insurance company to put on hold an insurance claim. Let’s check out these reasons in detail.

Incorrect Details While Filing the Insurance Claim

Once the unfortunate incident of death happens, the nominees or beneficiaries of the life insured will need to mention personal information, such as date of birth, occupation, qualification and income, correctly. If it is not the case, the company can delay the claim settlement and ask you to remove the discrepancies and re-submit it. Failing to do the same could result in claim rejection too!

Incorrect Information About Health Conditions

While filling the life insurance application form, one may not mention the details correctly. Some may do it intentionally, others could do it mistakenly! But then, it’s YOU who could face problems during the claim settlement. So while filling the form, mention your health status correctly. Yes, when you mention the past or ongoing disease, the insurance company will raise the premium rates. But how will you react when they will delay or even reject the claim on account of incorrect information put in by you? Annoyed, right? So, mention your health status correctly.

In case the premium amount comes beyond your affordability, check for it at some other life insurance companies. You have so many options, choose the right one based on your requirements. What’s more, health status can change over the years. For example, you may not have been a smoker while filing the application form. But over time, you could become a smoker and worsen your health as a result. There won’t be any problem if you update this to the insurance company. If not, a delay in the claim settlement is inevitable! So, do update all these and save yourself from hassles later.

No Updation of Nominee or Beneficiary Details

Life insurance benefits are offered to nominees upon the death of the life assured. So if you have not mentioned details like the name and contact information of the nominee correctly, the claim settlement will get delayed! Also, the contact details of nominees could change over time, and if you don’t get it updated, it could lead to a delay.

What’s more, nominees may not be alive or in a relationship with you later. Suppose you put your spouse as the nominee while filling the life insurance application form. In case both of you have got divorced, and if you have not intimated it to the insurer when it happened, the insurance company can’t process the claim settlement. Similarly, you had your parents as your nominee at policy inception. But if they pass away thereafter and the insurance company does not know about it, the claim processing will get delayed.

Late Submission of Life Insurance Claims

Many submit the life insurance claim much later than they should and end up getting their settlement delayed. Late submission does not go down well with insurance companies, which could see it as a way to deceive them. They investigate to examine the authenticity of the claim made. In case they find credible evidence of foul play, don’t be surprised if they reject your claim!

Non-disclosure of Past/Ongoing Life Insurance Policies

Many don’t disclose the life insurance policies they took earlier and withdrew later by surrendering them. At the same time, you may have some policies too besides the new policy you want to buy. If you don’t reveal it to the new life insurer, expect a delay in the claim settlement. So, it’s important to reveal other policies too.

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