Tips to Make Claim Settlement Easy for Your Beneficiaries

The prime reason for which an individual buys a term insurance or a life insurance policy is to ensure that his family or his loved ones do not have to go through a financial turmoil in his absence. However, buying a life insurance policy would not make any since if the policyholder’s family does not get the claim when in need.

The annual report by IRDAI for the financial year 2013-14 depicted that almost 22 per cent of the life insurance claims made in the year were kept pending for more than 12 months before being settled. Though the total claim settlement ratio for the financial year 2014 stood at about 96.75 %, the lengthy period of waiting for the claims to get settled is the subject of worry because it is essential that your family receives the death benefit in the time of need.

But, following a few quick and easy steps can make sure that your family benefits from a hassle-free settlement of claim. Settlement of claims settlement might as insurer’s responsibility to you; however, as a policyholder, you also need to do your part in order to ensure simplification of matters.

Given below are some steps, following which can make the settlement of claims simple for your nominees: 

·      Check the Claim Settlement Ratio

An imperative measure to ensure easy settlement of life insurance claims for your family is closely examining the claim settlement ratio for your life insurance provider. Claim Settlement Ratio is basically the percentage of claims settled by an insurer with respect to the number of claims made on him over a certain period of time. A company’s higher claim settlement ratio means that there are greater chances of the claim to be settled by that insurer. It would not at all be a wise decision to choose an insurer with a low CSR just because it can be availed for cheaper premiums because it simply defeats the idea of buying a term life insurance policy at all.

·      Ensure complete accuracy and disclosure of the information

While filling your term life insurance application form, ensure that all the information you fill in is complete and accurate. After filling in the information, review the entire form and crosscheck the details to ensure zero errors. Do not refrain from disclosing your health habits, such as smoking or drinking, your health conditions, etc. Make sure that you fill up the life insurance application form on your own.

·      Periodically update the details

Make sure that you update your term insurance plans from time to time so as to be sure that it contains the valid and correct details. Update all the changes in the major details, such as name, contact number, address, etc. Also, immediately inform the insurer about the change in the beneficiary of your policy (if any happens) and maintain the proofs of all such amendments.

·      Understand your term insurance plan

Carefully go through the offer and the life insurance document carefully. Comprehend all the features clauses, inclusion, and exclusions of your life insurance policy, so as to learn about the fundamentals of making claims. Identify the benefits that your beneficiary is eligible to receive and stay informed about the redress procedure of your provider.

·      Inform the Beneficiary

On gaining complete understanding about the policy and its claim settlement procedures, pass on the knowledge to the beneficiary. It is essential for the beneficiary to know the details of the policy, including the sum assured under the policy and the process to claim it. Preferably, your beneficiary should always know the exclusion and clauses of your life insurance policy.

·      Maintain Documents

Make sure that all the documents related to your term insurance policy are kept safe and organized. Also, let your nominee know where you place them. Categorize and label each document so as to make it easy for the beneficiary to find them and easily understand them in time of need.

You can also maintain an E-Term Insurance account to and make all the streamlined information simply accessible for the beneficiary. Settlement of claims is the most significant element of a term life insurance policy so make it simple for your loved ones.