My friend’s family is facing problems while claiming his life cover. Can insurers ignore the contract on the death of the assured?
Insurers can’t ignore the contract on the death of the assured. Rather, they should settle all genuine claims. However, it is the duty of the insurer to protect the interests of other policy holders by declining any fraudulent claims. Most refusals are owing to the non-disclosure of facts like pre-existing health conditions, hazardous occupation, pastime details, unusual lifestyles, etc. If such information is not disclosed when applying for a policy, the insurer may refuse to settle the claim as insurance is a contract of good faith. The repudiation of a claim is according to the terms of Section 45 of Insurance Act, 1938, on the basis of inaccurate statement or false document which was material from a risk-assessment viewpoint and such repudiation is made within two years of taking the policy.
When looking for an investment-cum-insurance plan, how to choose between a traditional and a unit-linked plan?
While choosing to buy a traditional insurance plan or a unit-linked insurance plan (Ulip), it is important to analyse the financial needs, goals and objectives of any individual before deciding on the plan. For example, if a customer is planning for child's education, he could look for a plan with guaranteed returns. Hence, he may buy a traditional plan, with guaranteed returns. On the other hand, if a person is single, has few liabilities and wants to create wealth, he may aspire for higher returns. He can choose to invest in market-linked products, offering equity funds. Both traditional plans and Ulips have their merits. Traditional plans are important to ensure basic protection for one's family in case of an unfortunate demise. Ulips, on the other hand, can help save and create wealth over a period of time, while also offering insurance cover. In summary, the needs of the customer have to match with the features/benefits put on offer by the life insurance plans.
The writer is the MD & CEO of Future Generali Life Insurance. Send your queries to yourmoney@bsmail.in