Insurers consider the initial waiting period, history, non-disclosure and policy renewal.
Last week, HDFC Life Insurance Company was fined for delaying a claim settlement. The company took more than the prescribed six months to decide on a death claim. HDFC Life CEO Amitabh Chaudhary said: "The claim was made within four months of the policy issuance. This called for a detailed investigation. Hence, the delay."
In life insurance, claims made within months (typically first 12 months) of purchasing the policy are always investigated to rule out foul play or even suicide, which are not covered in the first year. The only time you would not face counter questions is when the death is due to an accident.
| CLAIM DELAYED? |
LIFE INSURANCE
HEALTH INSURANCE |
-
Disclose all charges levied by the hospital
-
Claims aren’t granted if sum assured is exhausted
-
Don’t hide pre-existing diseases, renew policy
-
Remember the exclusions, waiting periods
Claim settlement period = 30 days
MOTOR INSURANCE
-
Only accidental damages are covered
-
Disclose claim history when changing insurance
-
Do not delay reporting of any accident
-
Second-hand owners must ensure policy transfer
Claim settlement period = 7-15 days
Many have multiple life polices. In such cases, one needs to inform the insurer, at the time of buying a new policy, about the existing life covers. This is part of the underwriting practice to check if you have more covers than required. If so, an insurer can deny you a policy.
Some may not reveal they were smokers earlier. Insurers say, everything from past and present jobs, income and medical history impact your underwriting risks. So, when such a piece of information is discovered later, it is deemed non-disclosure of crucial information. According to the regulator, on submission of all documents, the insurance company should take 30 days to inform about the acceptance or rejection of a claim request.
When claiming, you need the original policy document and the death certificate. "When the cause of death is unnatural, insurers ask for more documents, like past hospital records," says Anil Sahgal, founder, i-save, a comparison portal.
When claiming against your health insurance policy, you should disclose all hospital charges. Bharti AXA General Insurance CEO Amarnath Ananthanarayanan says: "Mostly, people get admitted in high-end hospitals when their policy does not support the charges levied by such hospitals (sub-limits on room rent). If the company discovers that (non-cashless), it asks for more documents and there is a delay." Usually, you can get clarity on health claims within a month.
Future Generali General Insurance Head (Health Insurance) Shriraj Deshpande points out that many policyholders are not aware that they have exhausted their assured sum and go ahead and make a claim. It is not accepted.
Some even hide their pre-existing diseases and make a claim in the waiting period. This is most likely to be rejected. Normally, pre-existing conditions are not covered for the first four years. Similarly, if claims are made in the initial waiting period of 30 to 90 days, it is rejected. Many even claim for treatment of diseases listed as exclusions.
Motor claims are resolved in 7 to 15 days. Motor policies cover only accidental damages, and natural wear and tear is excluded. When changing the insurer at the time of policy renewal, you should disclose your claim history. If not, the insurer has the right to reject your claim, as it contacts your previous insurer to verify your history when you make a claim.
Don't delay reporting any accident. Delay of over 10 days gives rise to suspicions, and delay. Second-hand car owners should ensure the policy document has been transferred in his/her name. Insurers reject claims if the names are different. When travelling, you need to get in touch with the insurer to include clauses making the policy valid in that area/state or neighbouring country.
In both health and motor insurance, not renewing the policy can land you in trouble. Once the renewal date has expired, you will have to go through formalities for buying a new policy. According to the Insurance Act, the premium needs to be paid before the risk is accepted. This stands true even if you make a claim in the grace period.
