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What are some best practices after buying a term policy?

10 Oct 22      |       | ShareShare Share Blog Or copy link Copy Share this link via

Authored by: Anurag Ainapurapu
Reviewed by: Krupa Kenia

It is great that you have all your policy documents stored properly, but no it’s not enough. 


You must also keep digital copies of your policy documents and store them in an E-Insurance Account so that you or your family can access them anytime, anywhere and all in one place, without the hassle of looking for physical documents.

It is not mandatory to have an E-Insurance account, but it will surely make your life a lot easier. 

 

Why? Because it helps you store all your policy documents in one place so that you can easily manage and access them anytime and anywhere you want without the hassles of paperwork. 

 

Your E-Insurance account provides other benefits too such as:

 

  • It is a one-stop for tracking, downloading and managing all your insurance policies and account statements

  • You can also easily update your personal information, bank and KYC details across all policies in one place

  • You can get reminders on policy renewals with online renewal payment facilities

 

And here’s the best part: Your nominee(s) can easily access your policy documents upon your death. They don’t need to waste time searching for these documents when making a death claim at a difficult time. 

 

P.S.: Don’t forget to inform them about your eIA account and the login credentials

 

Find out more about E-Insurance Accounts and why you should get one. 

 

Congrats on finally buying term insurance to secure your family’s financial future in your absence. 

 

But remember, your responsibilities don’t just stop at buying the term plan. There are some more steps you should follow to make the best of your plan and ensure your family has a hassle-free claim experience.

 

Here are some best practices you should follow after buying a term plan:

 

  1. Read the policy document carefully, understand policy exclusions and get any errors rectified at the earliest to avoid future problems

  2. Keep your family informed about your term policy and educate them on how to make a claim in the event of your death 

  3. Pay your premiums on time to avoid the risk of policy lapse. You can also activate auto-pay with your bank so that the premiums get paid automatically 

  4. Keep all necessary policy documents in physical and digital format safely, and ensure your family has access to these at all times

  5. Sync up your DigiLocker to access the e-copy 

  6. Keep your family informed about your E-Insurance account credentials

  7. Update all the relevant information about your policy as and when it changes. For e.g.: Update your nominee details like changes in their personal information or living status

  8. Make a Will and register it and clearly mention your nominee(s) and their right to receive the life cover as an added precaution. This is because your Will will always override your term insurance nomination (unless your policy was bought under MWPA).

  9. From time to time, ensure your life cover is sufficient and increase it as per your changing requirements

Yes, of course you should do it at the earliest. A term policy is for their benefit and can help them tackle financial problems that may arise due to your passing away. 

 

When you buy a term policy, you should inform your family about: 

 

  • The policy details 

  • The policy documents and how to access them

  • Your insurer’s contact details 

  • The life cover they should be getting as a payout 

  • How to make a claim 

  • What to do in case the claim gets denied

 

Don’t make a mistake of not informing your family about your term policy.

Yes. If your death claim ever gets denied, your family needs to know the next steps so that they can tackle this unfortunate situation and avert a financial crisis in your absence. 

 

Here’s what they can do: 

 

  1. Contact the Claim Review Committee of your insurer and share all your claim details

  2. Submit your claim details either physically or electronically and get an acknowledgement from them for receiving your details. Pro tip: They can also contact the committee if they have already gotten a response from your insurer but they’re unhappy with it.

  3. Get in touch with an Insurance Ombudsman if they are unhappy with the matter resolution. The Insurance Ombudsman can entertain a complaint up to ₹ 50 lakhs. 

  4. Escalate the issue to IRDAI if the matter is still not resolved. The complaint should be resolved in two weeks.

  5. And as a last resort, they can approach the consumer forum.

 

Find out more on what your nominees can do in the case of a claim denial. 

Yes, you should, if you don’t want your nominees to face a hard time getting the term insurance payout when you pass away.

 

Here’s what your nominees need to do to file a death claim: 

 

  1.  Inform your insurer right away about the death of the life insured to expedite the process. They can also get help from an insurance agent with the claim process in case the policy was bought from one. 

  2. Fill out the claim form with all the necessary details and submit it. We know it could be an emotionally difficult time but they should avoid making any mistakes as it can result in claim rejection.

  3. There are some additional documents they have to submit like: 

  • Death Certificate
  • Policy documents
  • Hospital records and discharge form (if applicable) 
  • Postmortem report (if applicable)
  • Your ID proof 

The list of documents will vary from insurer to insurer, so they should contact your life insurance company for the exact requirement. To avoid claim rejection, they should follow the process of filing a claim properly. 

 

4. Additionally, here is some information you should know 

  • Beyond a nominee or an assignee, even a relative can do the claim intimation

  • The list of documents will vary from insurer to insurer, and also on the basis of what add-ons the policy has. Contact your insurer for the exact requirement.

 

5. After filing the claim, the insurer will accept/reject it in

  • 2 weeks (without any investigation requirement)

  • 120 days otherwise

 

Find out more about how to file a term insurance death claim. 

Yes, it’s good practice to do it. If your family needs to make a claim on your term policy, they can get guidance from the agent for the claim process. The agent may also help them provide the necessary details and documents required for the claim and make sure they make no mistakes at such a tough time.

Yes, absolutely. Your family members should know what’s in your Will and honour that. A Will becomes especially important if the nominees of your term policy are not the intended recipients of your term policy payout. 

 

For example, let’s say you want to ensure your live-in partner receives your term insurance life cover. You may have named your parent as the nominee on your term policy but on your Will, you have specified that your live-in partner has the undisputed right to the payout. In such a case, your parent should know about your Will and they should honour that, i.e. when they receive the payout, they should transfer it to your live-in partner. 

Yes, you should inform your family about any changes that may affect them.

 

For example: say you have changed your life cover amount. Or you have modified the life cover payout i.e. the way your nominee will receive your life cover. 

 

This information can help them during the claim process, i.e. they’ll know about what changes you’ve made to the policy and can get it clarified from your insurer in case someone questions their claim. Knowing this information can also help them plan their lives ahead in your absence. 

Yes, you should. In case their claim has been rejected due to any other reason, they can challenge it and mention it to the relevant grievance cell. 

 

A term insurance claim can be denied if: 

 

  • You lie or provide inaccurate information about your: 

    • Age

    • Lifestyle habits

    • Medical history (yours and your family’s)

    • Any other insurance policy you may have

    • Other personal information while buying your term insurance policy 

  • You do not pay your premiums 

  • You don’t update relevant information about your policy (such as a change in nominee’s name) 

  • You die due to unlawful activities such as drunk driving

Yes. Even if you have bought the policy online, your family members can still approach your insurer to provide them with assistance in the claim process. It’s good to keep your family informed about this aspect as well so that they know whom to approach in case they need help with the claim process. 

 

A term insurance policy claim can be initiated even by a relative. So it’s a good idea to inform a trusted close relative about your term policy. They can also help your nominees during the claim process, especially if you have a special needs nominee.

Check your life insurance needs whenever there is a significant upgrade in your lifestyle and financial status. For e.g.: say, you bought a house, you got married or had your 1st kid etc.) or you have aged. At such stages, check if your term policy life cover satisfies your life insurance needs. 

 

For example, if you have bought a house, you may want to check if your term cover can pay off the home loan and still leave enough money behind for your family to stay financially secure. If you are in your 40s, you may want to check if you want to add a critical illness rider to your term plan or not. 

 

Find out how you can ensure if you are adequately insured or not. 

Yes, this is a very important thing to do. The contact information can help your family while making a claim or whenever they want to get in touch with your insurer to know information about your policy (for example, if you get hospitalised, they may want to check with your insurer if your policy provides a payout for hospital care). 

Unfortunately, yes, they have to initiate separate claims for the different policies you have. That’s why don’t buy more policies than you need. Buy just as many policies as required to meet your life insurance needs, not more. 

 

Use the KlarifyLife Term Guide to determine how much life cover you need.

Yes, it's good practice. In case, god forbid, the claim gets denied, your nominees can show the conversations as proof to the respective grievance platform. 

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