How to ensure that your Insurance Claims gets Paid.

When the time comes to pay the claim, the insurance company experiences the moment of truth.  That is the single most (or some would say the only) criteria that insurance companies are judged on. The customers have paid their premium for years and now had an unfortunate event in their life. They expect the insurer to help them. Treat a customer well during this time and you have him/her for life. What’s more, the customer will spread the good word. Treat them badly and you not only have an irate customer but also a negative amplifier for your business.

All insurers do want to pay legitimate claims. The difficulty for claims evaluators is that the moment of claims also presents the best opportunity for fraudsters to strike.  If you are too lax you are frittering away the premium of your customers. The claims evaluator faces a really difficult task. They typically look for patterns that seem to indicate a dodgy claim. The best thing you can do is not to get caught in that unintentionally. Here are some tips that will help you.

Declare all information truthfully

Insurance forms are lengthy and we often tend to skip or overlook sections. We fail to declare our previous claims history, pre-existing diseases, smoking habits etc. While insurers may accept these declarations at face value at the time of buying a policy, the claims adjustor would scrutinize these a lot more carefully. So make sure you declare everything and not hide anything.

Better to undergo tests.

Lots of people try to avoid medical tests while buying life or health insurance policies. Medical tests are a hassle, you need to fast, probably take a day off from work and it is not the easiest thing to do. But I would advise you that it is well worth the hassle to go thru a medical test.  Medical tests allow the insurer to be sure of what he is insuring and gives the insurer and more importantly the claims evaluator more certainty. Do not avoid medical tests and repent later.

Keep your documentation in proper order.

This is especially important for claims related to car and property. Ensure that you keep the ownership documents and purchase documents with you. In case of a car under insurance, ensure that you have the registration in your name and have a valid driving license. Lack of proper documentation is a big red flag for the insurer.

Take these three simple steps and ensure that your claims never get rejected. Remember again that most insurers do want to service you well at the time of claims. Make their job easy by declaring all information, undergoing a pre-policy test if needed and keep your documentation in order.

If you are still worried that an insurer may not pay your claim, check out the claims payment record of all the insurers in India before buying a policy.

6 Steps to take if your life insurance company rejects your claim

Nothing can be more traumatic than an life Insurance claim getting rejected. Primary feelings are a sense of betrayal and helplessness.

But do not lose hope; here is what you can do.

1.       Know your Rights: These are an extract of your rights as a policyholder/claimant:

a.       After you submit a claim, the company shall raise requirements all at once and not in a piece-meal manner, within a period of 15 days of the receipt of the claim.

b.      A claim under a life policy shall be paid or be disputed giving all the relevant reasons, within 30 days from the date of receipt of all relevant papers and clarifications required. If the company requires an investigation, it shall initiate and complete such investigation not later than 6 months from the time of lodging the claim.

c.       Under certain circumstances, companies are liable to pay interest on delayed claim payments. 

It is possible that you may not have in your possession documents that the company insists on your producing. This could also be one reason that the company delays/denies claims. You must inform the company in clear terms that you do not have these documents and the reasons for the same.

2.       Check the date of commencement of the policy: Insurance companies cannot reject claims under policies that have completed more than 2 years from the date of commencement, unless they can prove fraud. It will help to read Sec 45 of the Insurance Act.

3.       Check the Proposal Form: A copy of the proposal/application for insurance is part of the policy document. Check if all information was correctly provided at the time of taking out the policy.

4.       Write to the company: If both of the above are in your favour, write a letter to the company asking for a review of the claim decision. Most companies have committees that review appeals from claimants. These committees generally comprise of senior staff and they tend to have a more “open” view. Make sure your application reaches this committee.

5.       File a complaint with the Ombudsman: If the value of your contract with the insurance company is Rs 20 lacs or less, you can approach the Ombudsman. The Ombudsman is a quasi-judicial body that hears appeals against an insurance company. This service is free and there is no need to appoint lawyers or other legal personnel. Ombudsman awards are binding on the Company.

6.       Approach the Consumer Court: A large number of decisions by consumer courts have helped aggrieved policyholders and claimants.

Of course the choice to approach a regular court always exists, and you may want to seek those remedies.

It is useful to also know the claim paying history of companies before you purchase a policy. Visit us to know more. If you still have a query, please contact us.

Amit Kumar