By Business Desk,News18
Copyright news18
Having a life insurance policy in place helps individuals ride through their most difficult times. Buying an effective life insurance scheme allows individuals to ensure a sufficient financial safety net for their family members after their demise. Banks hand over the accrued sums to the nominees assigned by the borrower in the agreement after the borrower’s death.
Having a life insurance policy is only half the job done. The policyholders can only rest easy when their loved ones can easily access the sums and claim their intended benefits in the future. According to Rajesh Krishnan, Chief Operations and Customer Experience Officer, Bajaj Allianz Life Insurance, claiming the life insurance can be a “difficult time for nominees, and truly the moment of truth for life insurers.”
Why Is a Life Insurance Claim Delayed Or Rejected
A nominee’s life insurance claim may be delayed or rejected by the bank due to common errors, such as failing to attach the required documents of the original policy bond or the registered account. It forces banks to undergo a second round of paperwork with individuals to obtain the mandatory documents before issuing them the policy amount.
In cases where the borrower suffers unnatural or accidental death, the nominee must not omit police records or hospital discharge summaries from the documents. It could lead to further delays or even rejection of the life insurance claim.
At times, families may face other unnecessary complications in filing the claim after providing wrong information with respect to the cause, date or both of the death. “Beneficiaries should be careful not to submit photocopies without appropriate attestations as well,” said Anup Seth, Chief Distribution Officer, Edelweiss Life Insurance, as quoted by the Mint.
Other Mistakes
Mismanagement of the life insurance policy by the policyholder or the nominee may also lead to delays and rejection in receiving the claim. Banks may reject or postpone handing over the policy benefits in such scenarios. “Non-payment of premiums or delaying paying premiums, leading to the policy lapsing or reduced benefits,” said Seth.
Individuals are advised not to hide any information related to their health and financial condition at the policy purchase stage. This error is often caught by investigating authorities during the claim period, which creates grounds for complete rejection.
If the claim is rejected, the insurer provides a written explanation for the decision, while also opening up avenues for appeals made by the nominees. The beneficiary can file a complaint with the bank’s concerned authorities, who will then initiate an investigation into the matter immediately.
