Review your Insurance portfolio Regularly

A stitch in time saves time and money and heartache

Many of us have insurance policies. Would it surprise you if I told you that 94% of us sign an insurance application form at the “x” mark and depend on our agent to fill up the details? If this is the status at signing-up, would it be any different when the contract is received? Have you been guilty of handing over a cheque to your agent with the amount blank or the name of the company blank? Do not worry: you are in the majority. It is surprising that we will argue with our vegetable vendor for over charging us by a few rupees but will ignore crucial steps with regards to our insurance policy.

India has many million insurance policy holders. I can confidently say that those who have read it from cover to cover number a handful. Hardly any of us have read the documents. Almost none of us know what is in them. We depend on our agents to tell us if any amounts are due. If it were not for automatic credits into our accounts of any survival benefits, we probably would not even track those! We also know that insurance documents are complex pieces of legal jargon, loaded in favour of the insurance company. But this does not mean that we abdicate our rights to know what is in these documents. Insurance companies are expected to do a due diligence when they underwrite a new case, yet in their hurry they may tend to overlook critical documentation: however what most people do not know is that a far greater due diligence is done at claims stage before actual payouts happen. Many are the claims that are stuck because the policyholder did not perform basic actions either due to lack of knowledge or because of carelessness. For example, general insurance claims have to be reported within a defined time-frame, and unnecessary correspondence can be avoided over delayed reporting of claims. Few know that insurance company loans require payment of interest: Insurance maturities amounts can be severely curtailed/forfeited because interest on loans availed on the policy were never repaid. A few of us are not exactly sure when our policies renew and if it not were for those pestering calls we may forget that date as well. Make a resolution today: Review your insurance portfolio.

Check when your policy expires

Check when your policy expires. If it is a health, home or motor policy, this will most probably be annual in nature. Check if your agent/distributor is still around and speak to him. If online options are available, and you are comfortable transacting online, check if online renewals are available. If it is a life insurance policy, check if any premiums are due and on what date they are due. As in general insurance policies, most life companies allow payment of renewal premium online. Your agent or distributor, if he is still around, can also be contacted. If your policy has lapsed, check whether you want to revive it. It is generally wiser to revive, because surrender values are usually low. Contact a professional for help.

Are your policy and its details up to date?

Check the details of your policy. Has your address changed? If so get it updated in the insurer’s records. Most will require proof of address, hence keep documentation ready. Are any survival payments due and/or have you missed any? While in most cases insurers will have records of missed payouts, it is better to be on the safer side and keep track. Check if nomination details are updated. There have been cases where nomination details are left as it were recorded in the original policy (usually in favour of the mother or father) and at the time of claim they may have predeceased the life assured, resulting in complex legal documentation to prove title. Has the policy been assigned, say for a housing loan, and if so have all loans been repaid? Initiate proceedings for reassignment, to bring the policy back in your name.

Read the T&C

Read the policy document and see what is covered and more importantly what is not covered. General insurance policies will have plenty of conditions and clauses that limit your claim payouts. It is better to be aware of them. Some of them may have benefits in your favour: for example road side assistance in case of a vehicle breakdown or ambulance benefits in case of hospitalisation.

While it is not possible to list down all the factors that may impact you, it is critical to know your rights and responsibilities with respect to your insurance policy. It all starts with reviewing your portfolio.