A term insurance plan is the simplest and most affordable type of life cover. It pays the benefits to your nominees if an unfortunate incident occurs during the policy duration.
Buying a term plan is important to ensure the financial stability of your family in your sudden absence, especially if you are the only earning member. The policy benefits ensure that your family members are able to sustain their lifestyle and meet various financial goals, such as household expenses and education costs, among others.
A term insurance policy is only helpful if your nominees receive the money when they file a claim. Here are six ways to make sure that the insurance company does not deny your claim:
- Provide complete medical history and lifestyle-related details
Insurance companies can reject claims due to “concealment of relevant information”. The insurer determines the premium on term life insurance based on various factors, like your age, gender, habits, occupation, and income. You may be tempted to hide lifestyle habits like smoking or drinking or your medical history to reduce the premium or increase the sum assured (SA). However, it is essential to provide all the relevant details so that your nominees do not suffer from claim rejection at a time when they are dealing with the emotional loss of your absence.
- Make timely premium payments
It is important to pay the renewal premium on or before the due date to ensure that the coverage under the term insurance policy continues without any interruption. If you fail to pay the premium on time, it may result in the lapse of the policy. Insurers also offer a grace period during which you can pay the premium for continued coverage. It is advisable to set up a direct debit facility from your bank account to prevent the lapse of the policy,
- Give details of existing and past policies
When you buy a new insurance policy, you must share information about all your current and earlier plans. Ensure you disclose the name of the insurance company, the sum assured, and the policy number at the time of buying a new term plan. Do not avoid disclosure of these details, as it may result in the rejection of the claim that your loved ones will file when you are not there with them.
- Update nominee information
Your nominees will receive the death benefit in case of an untoward event. Therefore, it is necessary to update their details to avoid complications when they file a claim. Furnish all information, such as name, age, address, and contact details of the nominees to the insurance company. Also, select your nominee wisely. If the nominee is a minor, provide the insurer with the details of the guardian.
- Understand all the terms and conditions
You must read the policy document thoroughly to know about all the terms and conditions and the fine print. Be clear on all the inclusions and exclusions to ensure that your family members do not have to face any issues in the future. Usually, an online term insurance plan does not cover events due to existing medical conditions, hazardous activities, under the influence of alcohol or drug, and self-harm. Therefore, review the fine print and ensure that your dear ones learn about the various terms and conditions to avoid rejection if they need to file a claim in your absence.
- Fill the proposal form yourself
It is best if you fill the form on your own so that you can give accurate details to the insurer. Do not let your agent fill the form, as he or she may not have all the necessary information about your medical condition and history, financial situation, and lifestyle habits. The insurer may reject your nominees’ claim if the details do not match with the information available with the company.
If you have submitted all the relevant information and filled the form properly, the insurer will have no reason to disapprove of your nominees’ claim. Therefore, be responsible while buying a term plan to prevent your family from difficulties in the future.