Recently one reader raised these questions on Ask Us. He wrote – I am your regular reader. I am little confused in below points
1. Why one should Buy Life Insurance? Please provide the list of major reasons.
2. Your article says that One Should Buy Term Insurance, That is OK but from which company one should buy or how one should choose the Insurance Company for Insuring himself.
Read – How to choose term plan.
3. I have planned to buy Term Insurance from HDFC but after reading the attached letter. I am confused. Please help me.
This is bit shocking read this letter:
So the whole purpose of taking insurance goes waste. Just a sympathy letter & they are done.
We all have seen impressive ads from Religare Aigon KILB (Kam Insurance leni ki bemari) – these touching ads shows the real importance of life insurance.
But it seems that Kam Insurance is a contagious disease & now Religare is also down with that. Money Life Magazine recently mentioned – Aegon Religare: ‘Kum’ insurance ‘dene ki bimari’.
“According to figures released by insurance regulator IRDA’s (the Insurance Regulatory and Development Authority) report for 2009-2010, the ‘claims settled ratio’ (the number of claims settled with respect to claims received) for Aegon Religare is a measly 48%, and the claims repudiated ratio (the number of claims rejected with respect to claims received) is as high as 44%.
For the 2008-09, Aegon Religare had not settled any of the claims that had been submitted to it. On top of that, the insurer repudiated 71% of the claims that had been submitted to it in the above period. “
What are IRDA guidelines pertaining to Claim processing? (normal process)
As per IRDA (Insurance Regulatory Development Authority), the insurance company is required to settle a claim within 30 days of receipt of all requirements. However, if the claim warrants further verification, the company should complete its procedures within 6 months from the receipt of the written intimation of the claim. If the company settles the claim beyond 1 month of receiving all request the interest is payable by the company on the claim amount. The interest is payable only where the claimant has submitted all the requirements. Further the rate and period of interest are decided as per IRDA guidelines.
But Why Rejections?? – Extracts from Religare Aegon website
As a policy holder, what should I do to ensure that my claim, whenever it arises in future, does not get rejected?
In the claims findings, if it is established that there had been a material suppression of facts pertaining to the proposal information, which would have impacted the assessment of risk, if disclosed at the proposal stage, then it may lead to repudiation of the claim.
If documents submitted at the Proposal / Claims stage are not genuine, it would also lead to claim repudiation. Comparing term Insurance claim rejections by Onemint.
When and Why Claim Repudiation/ Rejection happens?
It is very important to read through the Proposal form and submit factual details at the proposal stage and provide genuine documents at the time of buying a policy. In order to ensure that your claim does not get rejected, please ensure the following:
A) At the time of buying the policy:
- Ensure that you read and answer all the questions correctly and accurately to the best of your knowledge.
- Ensure that you have disclosed all material facts to the Company. In case of any doubt as to whether a fact is material or not, the fact should always be disclosed
- Ensure that all the documents submitted by you (E.g. Age Proof, Income Proof etc) along with the proposal form are genuine
B) Upon receipt of your policy document, please perform the following checks:
- Go through the copy of your signed proposal form enclosed along with the policy document
- Review and ensure that all the questions have been answered correctly and accurately to your best of knowledge
- In case you come across any discrepancy, please contact us immediately
On lighter note – one of my friends who is also a Certified Financial Planner wrote on his Facebook wall:
Just back from a rather irritated meeting with a client who decided to write to IRDA for allowing ‘bakwaas’ policies called ‘Term Plans’. He was upset that I had given his daughter a Term Plan since Term Plans don’t give any money back whereas only LIC policies always give you money back…”LIC bujhaye insurance ki pyaas, baaki sab policies bakwaas!!!”
I would like every TFL reader to share his experience on claims – in your family; friend’s family or you have learned something from discussion at some other forum. “Thousands of candles can be lit from a single candle, and the life of the candle will not be shortened.” So add your comment – this will really be helpful for others.