 "Steps to render the claims process a breeze")
You have heard of membership cards, gift cards and so on. Now, Aegon Religare Life Insurance has introduced a nominee card for all policies sold online. Along with the policy document comes this card, which the proposer, or policyholder, can pass on to his/her nominee.
How is this a help? The card contains details such as policy number, sum assured and so on. It also has a barcode, which will route the beneficiary to the company's website, offering a simple and easy way to log in for claims, says Yateesh Srivastava, chief operating officer, Aegon Religare Life Insurance. The company will later extend this card to policies sold offline as well.
Other insurance companies too have introduced measures to ease the claim-lodging process.
Manish Shah, co-founder and CEO, BigDecisions.IN, says that usually claimants do not realise that a policy is in force until long after the death of a policy-holder. In some cases, a nominee does not even know that s/he has been nominated. Good practice would be to have policy documents stored safely, though with access to a nominee/ claimant.
Cases abound where family members make a claim a couple of years after a policyholder has passed away, simply because they did not know at all about the policy. In such cases a "nominee card", with all details of the policy, could prove to be very useful, says Srivastava.
Lodging a claim
Once beneficiaries discover a policy, the procedure of lodging a claim begins. Insurance companies have also introduced measures to smoothen the claims process.
ICICI Prudential Life Insurance has a 24x7 ClaimCare cell, SMS service (by which a claimant can text a message and the company will call back) and a dedicated e-mail ID for all claims-related enquiries. The company has also introduced a facility to initiate a claim online through which claimants can upload relevant documents and the work of processing a claim can commence. A 'designated claims expert' is assigned to every claim in order to guide a claimant through the entire procedure. Claimants are updated on their claim status via SMS. They can also track on the website the status of their claims.
"We pro-actively update claimants on their claim status via SMS, or they can track the status of their claims from our website", says Kalpana Sampath, chief - customer service and operations, ICICI Prudential Life Insurance.
Language is a problem, given that many claims arise from semi-urban and rural places, says Ravi Kutumbarao, head - claims, Bajaj Allianz Life Insurance. To deal with this, the company has designed a one-page instruction sheet in various languages so that claimants understand the claims process and the nuances of various claim forms. Once a claim is notified at a branch office, the "claims module" of the system generates claim forms. Instruction sheets, too, are generated in the language preferred by the claimant.
Common mistakes
When purchasing a policy, buyers must keep in mind some matters in order that the claims process is made smoother. For instance, providing the correct spellings of names, addresses and contact details is one. Not having a nominee is another common problem. Hence, always fill in the nominee column in the application form when purchasing a policy.
"Customers should also disclose all facts related to their health while buying the policy. Or it could happen that the claim may be rejected later on", says Srivastava.
If you have not yet made a nomination for your policy you can add a name later, says Sampath. A nominee has to intimate the company regarding the claim, provide proof of title and of identity, and give a valid discharge to the insurance company. "Remember that the claim benefit is payable only on the demise of the life assured and claims proceeds are payable to the nominee only", she says.
If a deceased had not made a nomination, the benefits from the policy would ideally accrue to the legal heir. An insurance company may, hence, request legal documentation and "no objection" statements from other family members to obviate lawsuits in the future, says Shah.
Reasons for delay or rejection of claims
The chief causes of delays in the claims process are incomplete documents (the claim form, discharge voucher and documents related to the cause of death such as medical records, police records, etc.). If identity and residence proof of the nominee/beneficiary are incomplete according to the Anti-Money Laundering guidelines, the claims process could be delayed, says Frederick D'Souza, senior vice-president - underwriting, at HDFC Life. "The main reasons for claim rejections are non-disclosure of material facts or incorrect information pertaining to risk such as health, financial position, occupation, etc., at the time of the proposal. Claims are also rejected if they fall within the provisions excluded under the policy, e.g., suicide within a year of policy, death within the waiting period and if policies have lapsed, rendering them ineligible for a claim", D'Souza says.
Claims are classified as early and non-early. Any claim which arises within the first two years of the policy is classified as an early claim, and insurance companies thoroughly investigate such early claims. The investigation process involves field investigation and, at times may depend on external agencies/service providers such as hospitals, police officials and a few other government agencies. Such investigations could take a while. The regulator provides 180 days within which a claim has to be determined.
In the case of a non-early claim, documentation required is minimal such as a death certificate, bank details and KYC of the nominee. Once these documents are provided such claims are decided within five to seven days.
ENSURE HASSLE-FREE AND QUICKER CLAIMS SETTLEMENTS
How is this a help? The card contains details such as policy number, sum assured and so on. It also has a barcode, which will route the beneficiary to the company's website, offering a simple and easy way to log in for claims, says Yateesh Srivastava, chief operating officer, Aegon Religare Life Insurance. The company will later extend this card to policies sold offline as well.
Other insurance companies too have introduced measures to ease the claim-lodging process.
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HDFC Standard Life Insurance has designed a 'Little Book of Legacy', which helps a policyholder maintain a detailed, timely and systematic record of all assets and liabilities. This the beneficiary can refer to while making a claim.
Manish Shah, co-founder and CEO, BigDecisions.IN, says that usually claimants do not realise that a policy is in force until long after the death of a policy-holder. In some cases, a nominee does not even know that s/he has been nominated. Good practice would be to have policy documents stored safely, though with access to a nominee/ claimant.
Cases abound where family members make a claim a couple of years after a policyholder has passed away, simply because they did not know at all about the policy. In such cases a "nominee card", with all details of the policy, could prove to be very useful, says Srivastava.
Lodging a claim
Once beneficiaries discover a policy, the procedure of lodging a claim begins. Insurance companies have also introduced measures to smoothen the claims process.
ICICI Prudential Life Insurance has a 24x7 ClaimCare cell, SMS service (by which a claimant can text a message and the company will call back) and a dedicated e-mail ID for all claims-related enquiries. The company has also introduced a facility to initiate a claim online through which claimants can upload relevant documents and the work of processing a claim can commence. A 'designated claims expert' is assigned to every claim in order to guide a claimant through the entire procedure. Claimants are updated on their claim status via SMS. They can also track on the website the status of their claims.
"We pro-actively update claimants on their claim status via SMS, or they can track the status of their claims from our website", says Kalpana Sampath, chief - customer service and operations, ICICI Prudential Life Insurance.
Language is a problem, given that many claims arise from semi-urban and rural places, says Ravi Kutumbarao, head - claims, Bajaj Allianz Life Insurance. To deal with this, the company has designed a one-page instruction sheet in various languages so that claimants understand the claims process and the nuances of various claim forms. Once a claim is notified at a branch office, the "claims module" of the system generates claim forms. Instruction sheets, too, are generated in the language preferred by the claimant.
Common mistakes
When purchasing a policy, buyers must keep in mind some matters in order that the claims process is made smoother. For instance, providing the correct spellings of names, addresses and contact details is one. Not having a nominee is another common problem. Hence, always fill in the nominee column in the application form when purchasing a policy.
"Customers should also disclose all facts related to their health while buying the policy. Or it could happen that the claim may be rejected later on", says Srivastava.
If you have not yet made a nomination for your policy you can add a name later, says Sampath. A nominee has to intimate the company regarding the claim, provide proof of title and of identity, and give a valid discharge to the insurance company. "Remember that the claim benefit is payable only on the demise of the life assured and claims proceeds are payable to the nominee only", she says.
If a deceased had not made a nomination, the benefits from the policy would ideally accrue to the legal heir. An insurance company may, hence, request legal documentation and "no objection" statements from other family members to obviate lawsuits in the future, says Shah.
Reasons for delay or rejection of claims
The chief causes of delays in the claims process are incomplete documents (the claim form, discharge voucher and documents related to the cause of death such as medical records, police records, etc.). If identity and residence proof of the nominee/beneficiary are incomplete according to the Anti-Money Laundering guidelines, the claims process could be delayed, says Frederick D'Souza, senior vice-president - underwriting, at HDFC Life. "The main reasons for claim rejections are non-disclosure of material facts or incorrect information pertaining to risk such as health, financial position, occupation, etc., at the time of the proposal. Claims are also rejected if they fall within the provisions excluded under the policy, e.g., suicide within a year of policy, death within the waiting period and if policies have lapsed, rendering them ineligible for a claim", D'Souza says.
Claims are classified as early and non-early. Any claim which arises within the first two years of the policy is classified as an early claim, and insurance companies thoroughly investigate such early claims. The investigation process involves field investigation and, at times may depend on external agencies/service providers such as hospitals, police officials and a few other government agencies. Such investigations could take a while. The regulator provides 180 days within which a claim has to be determined.
In the case of a non-early claim, documentation required is minimal such as a death certificate, bank details and KYC of the nominee. Once these documents are provided such claims are decided within five to seven days.
ENSURE HASSLE-FREE AND QUICKER CLAIMS SETTLEMENTS
- Fill in the entire proposal form, yourself. All life insurance proposal forms encourage customers+ to read and to fill up the form themselves
- Always have a nominee while buying the policy. Disclose all information with regard to your health. If it is discovered later on, the company may reject your claim
- A policyholder must read the policy document when s/he receives it. Along with the policy document, all companies attach a copy of the proposal form. The answers to questions in the proposal form need to be checked. If the information there is incorrect, bring it to the insurance company's notice and see that it is corrected
- A policyholder must keep a policy in force by regular and timely premiums to avoid a policy lapsing. Life insurance products are long-term financial instruments and need to be continued so that a nominee can reap the benefit
- Keep policy documents in a safe place and inform the nominee about it. This will ensure that the money is claimed on time
- Beneficiary must ensure that all claims-related information, including medical/ police records are provided to the insurance company at the time of a claim
- Submitting incomplete documents, especially the claim form
- Not submitting supporting documents such as a death certificate, hospital records, doctors' certificates and past medical history. This may lead to further documents being required
- Submitting documents piecemeal
- Not informing the insurance company about the reasons and inability to provide documents on time