Disclose med history for settling claims smoothly

Do you have a life insurance policy? If yes, why did you buy the product? It must be either to avail tax benefits with limited risks or to make the lives of your loved ones easier even after your death. But apart from buying the policy, there are a few important things that need to be sorted out so that your loved ones can get the claim settlement without any hassle. Concealing the material facts pertaining to health, income, occupation and insurance history can act as a hindrance to policyholder during claim settlement. These factors are important at various stages of underwriting an insurance contract. Hiding the medical history at the time of proposal for a policy is the most dangerous one. The premium pricing of an insurance contract mainly depends on health conditions of the policy holder. So, people generally don't disclose their true medical conditions to save money on premium. Yateesh Srivastava, chief marketing officer, Aegon Religare Life Insurance, says, "Insurance companies rate customers according to the data furnished by the policyholder. Pre-existing diseases, smoking and drinking habits of policyholders can increase the premium marginally. But revealing all necessary facts would ultimately help them while making a claim." At times, the agents who distribute the insurance products fill the insurance proposal forms and may miss out the material facts about the customers due to ignorance. Wrong declaration of the material facts can cause your claim getting rejected. It is better to keep away from the myths like hiding your medical history for lower premium. Frederic D'Souza, senior vice- president HDFC Life Insurance, says, "The main reason for the claim rejection is the non-disclosure of some relevant facts regarding the insurance contract. Claims also get rejected if they fall within the exclusion of a particular policy and if the policies are lapsed making them ineligible." "The policyholder must ensure regular payment of the premium to avoid lapsation. Life insurance products are long-term financial instruments and they need to be continued so that the nominee can reap benefits," added D'Souza. It is advisable to notify the insurance company at the earliest and submit the necessary documents regarding the claims. The Limitation Act prescribes a period of three years from the event date. However, according to a recent Insurance Regulatory and Development Authority (Irda) circular, claims cannot be rejected if the policyholders submit the documents late due to genuine reasons. Customers need to provide personal details, policy number and reasons of filing the claim. The person who is filing the claim should describe the reasons for filing the claim. It is better to keep the photostat copy of all the documents submitted with the insurance companies for future correspondents. Also, ensure that the entire proposal form is read well prior to filling and provide all necessary information required. All insurance companies send a copy of the proposal form, along with the policy document. If there is any mistakes in the policy document, the customer should bring the same to the notice of the insurance company and get the records corrected. Jayant Dua, MD & CEO Birla Sunlife Co Ltd, says, "Claim settlement process is very important as it shows the reputation of an insurance company. We have an in-house claim assistance cell to make the entire process of claim settlement smooth for the customers."