Category Archives: Insurance

How to claim for your Life Insurance in case of Natural Calamities!

A natural calamity is an uncertain incident, which comes with a disaster of materialistic loss and life loss. Chennai floods, has again shown us, the worst side of natural calamities which are oftern referred as an “Act of God” specially when it comes to applying for your insurance claims. The greatest way to help yourself, in case you face such incidents is to lodge your insurance claims (Life & General insurance policies) at the earliest. Let’s understand what you need to take care before applying for any claim:-

These natural calamities are so sudden that not only it causes loss of human lives but also loss of assets in terms of immovable properties, valuables, vehicles, equipments, movable assets like machines and stock for businessman etc. There are three main types of insurance claims one need to make, these are Life Insurance (death claim), House & Motor insurance & Medical (health) insurance. Let’s understand death claim in this article:-

  1. Life Insurance:-

If a person lost his/her life, then after his death, his successors and legal heirs can claim the amount covered under the life insurance policy. A different policy plans and companies may have their own specific documentation; however the basic process and requirements are more or less same for lodign death claims. We advise you to take the following steps, to lodge your claims for life insurance policies.

  • Ensure the possession of the original policy document with you.
  • Coordinate with the nearest branch of the insurance company with the policy. Please note the time frame within which claim to be lodged from the date of death, try to lodge the claim immediately.
  • Some of the important details/documents which are generally required are:-
    • Original Policy document,
    • Name & other personal details of the policy holder,
    • Death certificate (including date and cause of death), and
    • Claimant’s relationship with the deceased.

Important Note:- In cases like Chennai floods & calamities like this, apart from the loss of human life, policy papers and documents may also get swept away and Insurance companies may launch a special help desk or drive and become liberal for relaxing the requirements of documents to be submitted. For e.g. getting a death certificate immediately may be a problem or if any person goes missing then, rules in particual this kind of situations, may get relaxed, particularly.

We have seen during Uttarakhand devastation that government had asked public sector insurer to pass claims on the basis of indeminity bonds submitted by the claimants for those who were missing because when in case of no physical proof of death, claims process may take several years. Because in case of applying for a death claim for a missing person you cannot apply for a “death certificate” and insurance claim cannot be made on the basis of “Presumption of Death”.

As per the provisions of section 108 of Indian Evidence Act, you can claim presumption of death only after the end of seven years starting from the date when the person was reported missing; the nominee/ legal heir also need to submit FIR, Police department reports and a court order along with any other necessary documents as required for lodging the and its settlement. These conditions and requirements may get relaxed during any natural calamities/disaster and claims are passed on priority.

For those affected by Chennai floods, most prominent insurance companies have already announced measures like setting up a dedicated toll free numbers and email ids to help claimants lodge their claims seamlessely.

 

What would you prefer; a cup of coffee or term insurance?

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Haven’t you seen various life insurance advertisements lately; selling you term insurance plan which costs less than a cup of your coffee or Rs. 15 a day? Why insurance companies’ have suddenly started offering cheaper term plans? Are these online term plans really good or is it a marketing gimmick? Let’s understand better:

What is a Term Plan?

As compared to traditional insurance plans, Term plan is a basic insurance plan wherein you pay a much lower premium to get a high sum assured. The other main difference is the death benefit which is provided only in case of death of the policy holder. It means that in case the policyholder survives the entire term of policy, nothing will be paid to the nominee hence there is no return on maturity of the term plan. A person of 35 years of age can buy a cover of Rs. 1 crore at around Rs.10,000/- per annum only.

Why it is available so cheap?

Because there are no agents involved; it is similar to your online shopping wherein no shopkeeper/distributor is involved saving company all the amount which they have to pay towards commission/other payouts and even the other administrative costs are much lower. The same amount is passed back to the end user. The other statistically proved reason is the longevity of those buying online as the population is mostly between in between 30s and 40s and also more alert and conscious about their security & well being.

Advantages:

Term plan has many advantages than your traditional policies as follows:

  1. Lowest Premium (50-60% cheaper than offline)
  2. Highest Coverage
  3. Faster process & Issuance
  4. Less paperwork involved
  5. Utmost Transparency
  6. Flexible in selecting a required plan
  7. No medical checkup for certain age groups or up to Rs. 50 lakhs sum assured

Disadvantages:

Though there are lot advantages as seen above for the policy buyer but ultimately it’s your nominee who is going to apply for the claim if arises. You have to make sure that the technology/lodging claim online and other filing process should not become a bottleneck for them because nominee in most cases would be either wife or parents. They should not be made run from pillar to post to get their due claim. This happens mainly because there is no agent or mediator who can help in all the paperwork (online) to get it done especially in times when they are under emotional trauma due to the death of their loved one. Even local office of insurance companies won’t be able to help because it is online and could be done online only.

Mango Investor’s Tips:

Online Term plans are best if you can educate your dependents for the procedures and formalities involved in the claim and also keep them updated about your policy contract and jurisdiction. Enjoy your cup of coffee without comparing its cost to the term plan and don’t fall prey to marketing gimmicks, buy smart.

 

 

How to buy the right life insurance cover?

How to buy the right life insurance cover?

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In India, insurance is mostly sold as a tool to achieve your financial goals like retirement planning, child education or mostly for tax planning. But none of these reasons should be the criteria for buying a life insurance product. There should be only one reason of buying a life insurance policy and i.e. SECURITY or financial protection, to guard your family in case of death of the main bread winner, a protection against financial hardships.

Life insurance products are also very complex in nature and people often finds them dangling with the following questions, so let’s understand how to buy the right insurance cover?

Q. 1) Which product to buy?

 

Ans.  This is the most critical part as a wrong product will defy the whole purpose of buying the policy itself.  Life insurance products comes in all shapes and sizes with no one size fit for all, you have Term insurance/ Money-back plan/ Ulips/ Pension plan/ Whole life insurance & Endowment insurance. I suggest you to go for pure term insurance policy only, the best and the purest form of insurance; it offers very high insurance cover at a very low price.

 

Q. 2) Which Company to buy from?

 

Ans.  The saying Ek anar aur so bimaar” applies aptly on insurance industry as there are as many as 24 insurance companies in India offering numerous life insurance products, making it very difficult to select. A simple test to decide which company to look for could be its claim settlement ratio i.e. how many claims it honors every year apart from its market standing and term and condition of your policy document, it’s pricing, buy a policy considering all the facts.

 

Q. 3) How much insurance cover to buy?                                                     

                                                                              

 Ans. It depends on your age, no. of dependants, outstanding liabilities, existing assets, monthly expenses, future ones like child education & marriage. You should buy a cover which provides enough money to manage the above mentioned events and expenses. Choose your cover diligently or at least buy a policy cover which is 8 to 10 times of your income apart from covering your outstanding loans.

Q. 4) Up to how many years do you need to buy?

Ans. Always buy a policy for the no. of years you intend to work as after that ideally your investment should give you a real insurance cover. You should always build solid assets like Gold/Properties/Cash/FDs/MFs or shares etc. in long run than depends on the policies, though initially buying policies would be the need of the hour.

Conclusion:

I have highlighted the deciding factors before you buy a policy, each factor needs to be researched thoroughly based on the various parameters as mentioned in the article. Only in case we are super rich or wins a lottery, we don’t need to worry about life insurance else buying a wrong policy would prove disastrous in case of an emergency, so be smart & buy smart.

Beware of Fraudulent IRDA calls for Bonus!

Beware of Fraudulent IRDA calls for Bonus!

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I believe you are aware of the fact that life insurance products are highly mis-sold financial products, especially In India as against the worldwide practice. It has been widely sold on the pretext of achieving your financial goals like Retirement, child education or as an investment tool for your future; it amounts to “Misselling”. But there is a flip side to Misselling, which is “Miss-buying” as many people buy policies for getting pass back in commission from the insurance agents which is an illegal practice.

But gone are the days when policies are bought and sold like this as the ever-increasing organized financial crimes has not spared Insurance industry also. For past few years many policy holders have fallen prey to fraudulent phone calls from the people claiming to be from IRDA.

How does it work?

These fraudsters work in the similar pattern the way Nigerian or IT refund frauds are being conducted ( as seen in my previous article).

Many policy holders have received calls from the people who claim to be from IRDA, offering you bonus or interest free loan on your existing insurance policies. Why people fall prey to these scams can be mainly attributed to two reasons: firstly the authenticity they establish by disclosing all the personal information of the policy holder and the other reason is the lucrative bonus amount or total “Interest Free Loan” they offer.

These calls are mostly originated from Delhi and you will be asked to claim your bonus or interest free loan by buying another insurance plan through them. These fraudsters never meet in person and all these transactions are carried out over phones or via courier guys.

Role of IRDA:

Insurance Regulatory and Development Authority (IRDA) has been warning people and has even put up a notification on its newly launched portal for the customer i.e. http://www.policyholder.gov.in/ . IRDA has clarified that it is a regulatory body established to protect the interests of the policyholder and to promote and ensure orderly growth of the insurance industry. It does not involve in sale of any kind of insurance or financial products.

What should you do?

Stay away from any unsolicited calls as these callers have all the information with respect to your existing policies which makes them looks very genuine. Never ever deal verbally and don’t get lured by bonus offer. Even otherwise, always verify the offer in “writing” and visit the official website of the insurance company before you buy insurance products. Look for genuine agents as against those who have been found using pamphlets & promotional materials showing tall claims. Don’t buy anything at the eleventh hour, especially for tax savings as many people do not invest in time and later on do not have time to verify the details.

In my next article, I will tell you how to select and buy right insurance policy. Till then beware of these calls and, Stay alert!

 

Who will Cry when you Die! Death Claim: Important tips before applying for a life insurance claim

It has been 4 months since Vinay (aged 39) has died in an accident leaving the family with the irreparable emotional gap which cannot be filled. He had a life insurance policy for Rs. 50 lakhs but the claim amount is still pending as Ankita his wife is still in a mid of knowing the process of lodging the claim and the documents required for the same. Let’s see the specific process to apply for the same.

Insurance Claims-How Personal Injury Cover Works in toronto

  • What is a Death Claim?

When the life assured dies during the Term of the policy i.e. before date of maturity, proceeds under the policy as a claim, is payable to the beneficiary which is called as a Death claim.

  • How to intimate a death claim?

The claim intimation should consist of information such as policy number, name of the insured, date of death, place of death, name of the claimant. For online policies you need to apply claim Online and for physical policies, one can get a claim intimation/notification form from the insurance co.

  • What documents need to be submitted?

Claimant’s statement, original policy document, death certificate, police FIR and post mortem report (for accidental death), certificate and records from the doctor treating the deceased/hospital (for death due to illness). Based on the sum at risk, cause of death and policy duration, insurance companies may also request some additional documents.

  • How much time does Insurance Company takes to settle the claim?

As per IRDA regulation, the insurer is required to settle a claim within 30 days of receipt of all the documents including clarification sought by the insurer. If the claim requires further investigation, the insurer has to complete its procedures within six months from receiving the written intimation of claim.

  • Who is entitled to receive the Death claim benefit?

The claim is usually payable to the legal heirs or the nominee (will discuss Nominee V/S legal heirs in coming series) as the case may be.

  • What happens if there is no nomination on death of the Life Assured or what happens if both the LA and the Nominee expires in the same event?

If the deceased policyholder has not nominated/assigned the policy or if he/she has not made a suitable provision regarding the policy money by way of a Will, the claim is payable to the holder of a succession Certificate or evidence of title from a Court of Law.

  • In case of any claim dispute where can your case be represented?

The claimant has to first approach the customer care dept. of the insurance company and in the event of response being dissatisfactory, the claimant may write to the Grievance Redressal Cell of IRDA which will then take up the matter with the concerned company.

If the complainant is looking for a judicial decision in respect of claims, he or she may approach the Insurance Ombudsman.