When you take a life insurance policy, you could say that there is only one purpose – to make life easier for the beneficiaries you have chosen in the event of anything unfortunate happening to you. However, no matter how diligent you may have been in maintaining your life insurance policy, it would be of no use if your beneficiaries are not able to get the claims settled on time whenever it may be required. The claims settlement process can be easy or complicated depending on various factors. Here are some tips on how to make claim settlement easy for your beneficiaries so that your policy can benefit them the way you intended.
- Understand your policy inside out: It is important to have an in-depth understanding of your life insurance policy, from its features to its benefits, all the way to its inclusions and exclusions and claims settlement procedures and policies. You should also make sure that your beneficiaries are aware of this. A lot of people keep their loved ones in the dark about their investments, whether it is life insurance or mutual funds, and this is unfortunate. If you want your beneficiaries to be able to get the claims settled without any delay, then it is imperative that you keep them in the loop about your policy.
- Be open about your health: Nothing can derail your claims settlement like a mistake or an all-out lie about your health condition. Whether it’s a habit of smoking or history of any pre-existing illness, it’s always better to be transparent about it on life insurance application form. Do not leave this to any agent to do if you are going through one. ‘Honesty is the best policy’ holds true here, no matter what anyone tells you otherwise.
- Keep up-to-date with updates: There could be changes in the terms and conditions of the policy that you will know only if you keep an eagle’s eye on the updates. This goes both ways, which means that you also need to update your life insurance company of any changes in details that could affect the claims settlement process. This includes things like a change in beneficiary, change in the address, change in contact number, etc. Failure to do so will result in unnecessary complications for your beneficiaries which could have been easily avoided.
- Get online: Getting online with your insurance policy is probably the best way to keep it organised, streamlined, and easy to access and manage. Make sure that your beneficiary also has access to your online account. It helps to cut down the amount of paperwork that is needed as well as the time as your e-documents can be stored and accessed at any time. Ensuring that everything is in order will help to cut down the time required during the claim settlement process.
- Documents in place: Even if you choose to keep your policy management offline, ensure that all your documents are organised, accurate, and in place. Make sure your beneficiaries know where the documents are stored so that there is no need to go hunting for them when the time comes.
- Beneficiary education: It is crucial that your beneficiary or beneficiaries know all about the claim settlement process, the documents required, time taken, how the payment is made, when to raise the claim, etc. This may differ from company to company, so it is important that they are aware of all the terms and conditions associated with this. Make sure they know about the grievance redressal mechanism as well as contact details. They should also know the policy number, sum assured, clauses, inclusions, exclusions, etc. This will help them be better prepared in case the claim has to be raised.
- Regular premium payments: Your policy is only of use if the premium payments are made on time and regularly. If there is a lapse in policy, then the insurance company has no obligation to pay the sum assured. A lapsed policy, in some cases, can be converted into a paid-up policy. This is where the sum insured is paid according to the premiums that have been paid already, even if the policy had lapsed due to non-payment after some time. This will, however, result in a lower sum insured. So, for the benefit of your beneficiaries, it is very important to pay your premiums on time to ensure that your policy does not lapse.
- Nominee appointment: It is easier and better in the long run to have a nominee appointed even if you have a beneficiary or if your beneficiary is a minor. The process to appoint a nominee is less complicated than getting a succession certificate in the absence of a nominee.
Once you have implemented the steps given above, you can rest assured that the claim settlement process will be a smooth one for your beneficiaries and you have done the best for them.