Last Updated on April 24, 2026 by teamtfl
A client’s wife called me in 2019. Her husband had died suddenly at 52 – a heart attack. He had a term insurance policy of Rs.75 lakh that they had taken jointly in 2014. She was calling with one question: “Will the claim be settled?”
I told her to gather the documents and we would work through it together. The claim was settled within 22 days. The insurer was HDFC Life.
But I have also seen the other side. A client who had hidden a pre-existing diabetes diagnosis in 2011. His nominee received a rejection letter three months after filing. The rejection was legally sound – material non-disclosure.
Life insurance claim rejection is almost always preventable. And the most important work happens not at the time of the claim, but at the time of buying the policy.
Quick Answer
Most life insurance claim rejections happen for two reasons: material non-disclosure at the time of buying the policy, or submission of incorrect/incomplete documents at the time of the claim. India’s overall claim settlement ratio improved to 96.82% in FY2023-24 (IRDAI data). The 3.18% that gets rejected is almost entirely avoidable if you fill the proposal form correctly and maintain proper documentation.
The real state of life insurance claims in India – 2024 data
The picture in 2026 is significantly better than it was in 2011. According to IRDAI’s Handbook on Indian Insurance Statistics 2023-24:
- Overall CSR (individual death claims within 30 days): 96.82% – both LIC and private insurers combined
- Private insurers’ CSR: 99% – the private sector has improved dramatically
- LIC settled 7,99,612 policies with a 96.42% CSR
- Top performers: Axis Max Life (99.79%), HDFC Life (99.97%), Bandhan Life (99.66%)
Note for context: The Aegon Religare that featured in the original 2011 version of this article – with a 48% settlement ratio – no longer exists. The company has been rebranded as Bandhan Life Insurance and its CSR is now 99.66%. This is a testament to how much regulatory pressure and competition have improved the industry.
But 96 to 99% settlement ratios mean 1 to 4% still gets rejected. On millions of policies, that is tens of thousands of families who do not receive the money they were counting on. The reasons are largely the same as they were in 2011.
Why life insurance claims get rejected
1. Material non-disclosure in the proposal form
This is the most common reason. The proposal form asks about pre-existing medical conditions, family history, smoking and drinking habits, travel plans, and other risk factors. Many buyers – guided by agents who want the sale to go through – underreport or omit these details.
When a claim is filed, the insurer investigates. If they find that a material fact was concealed at the time of purchase – diabetes, hypertension, a previous surgery, a previous policy rejection – they can and do repudiate the claim.
The rule is simple: disclose everything, even if you think it might increase your premium or lead to rejection. A slightly higher premium is far better than a rejected claim. And if one insurer refuses to cover you at standard rates, another may offer coverage at a higher premium or with exclusions – which is still better than no payout.
2. Fraudulent or incorrect documents
Fake age proofs, altered medical records, incorrect income documents – these are straightforward fraud and are rightly rejected. Always submit genuine documents and keep copies of everything you submit at the proposal stage.
3. Policy lapse due to non-payment
A policy that has lapsed because premiums were not paid on time has no claim value. Set up an auto-debit mandate for term insurance premiums. Missing a payment on a term plan is far more damaging than missing it on a mutual fund SIP – you lose coverage entirely.
4. Death during the exclusion period for specific causes
Some policies exclude certain causes of death for the first 1 to 3 years – suicide is the most common. Some riders may have waiting periods. Read the policy document carefully.
What happens when a claim is filed – IRDAI’s 2024 rules
IRDAI has significantly tightened claim settlement timelines. Under IRDAI (Settlement of Claims) Regulations 2024:
- Claim settlement within 30 days of receipt of all documents is mandatory
- If the claim requires investigation, it must be completed within 90 days
- If the insurer delays beyond these timelines, they must pay interest on the claim amount
- For claims under Rs.50 lakh, no investigation is required if the policy has been in force for more than 3 years (presumption of no fraud)
The 3-year rule is significant. If your term plan has been running for more than 3 years and your premium is under a certain threshold, the claim process is substantially faster and less likely to be challenged.
The checklist – before you buy and after
At the time of buying the policy:
- Fill the proposal form yourself – never let the agent fill it on your behalf. Read every question carefully.
- Disclose all medical conditions – diabetes, hypertension, thyroid issues, previous surgeries, ongoing medications. Even if you think it’s minor.
- Declare all existing policies – if you have other insurance, mention it.
- Use correct income details – the sum assured you buy should match your income declaration.
- Do not sign blank forms – insist on reviewing the complete form before signing.
- Keep a copy of your signed proposal form – this is your most important document if there is ever a dispute.
After receiving the policy document:
- Read the policy document within the free-look period (15 to 30 days). You can return it for a full refund if anything is wrong.
- Verify all your details in the policy – name, date of birth, address, nominee details.
- If there is any discrepancy, report it immediately – do not wait until claim time.
- Ensure your nominee knows about the policy – and knows where the documents are.
- Keep the policy active – set up auto-debit and monitor it annually.
Also read: What is Insurance – Investment or Expense? The Answer That Changes Everything
The darker truth about claim rejection
I want to say something that the insurance industry will not say: the incentive structure at the point of sale is partly responsible for claim rejections.
An agent who fills the form on your behalf and skips the pre-existing conditions section earns a commission. The rejection, if it comes, happens 5 to 10 years later – long after the agent has moved on. The regulatory improvements since 2020 have reduced this, but it still happens.
A friend who is a CFP once told me about a client who came to him furious – he had been sold a term plan by an agent who had told him not to mention his diabetes “because everyone has it and it just increases the premium.” Two years later, his wife filed a claim. Rejected. Material non-disclosure.
The lesson is not just to fill the form correctly. It is to work with advisors who have no incentive to compromise your disclosure – and to take personal ownership of what you sign.
Is your family’s term insurance actually claim-proof?
We review existing insurance portfolios as part of our financial planning process – checking for disclosure gaps, coverage adequacy, nominee setup, and policy lapses. A 30-minute insurance audit has saved clients from learning these lessons the hard way.
Frequently asked questions
What is the main reason life insurance claims get rejected in India?
Material non-disclosure is the primary reason – the policyholder did not disclose a pre-existing medical condition, incorrect income details, or other material facts at the time of buying the policy. The second most common reason is submission of incomplete or incorrect documents at the time of the claim. Both are largely avoidable with careful disclosure and documentation.
What is the current life insurance claim settlement ratio in India?
As per IRDAI’s 2023-24 report, the overall claim settlement ratio for individual death claims within 30 days is 96.82% (combining LIC and private insurers). Private insurers as a group achieved 99% CSR. Top performers include HDFC Life (99.97%), Axis Max Life (99.79%), and Bandhan Life (99.66%). This is a significant improvement from 2011 levels when some insurers had ratios below 50%.
How long does an insurer have to settle a life insurance claim?
Under IRDAI regulations, life insurance claims must be settled within 30 days of receiving all required documents. If an investigation is needed, the insurer must complete it within 90 days. If settlement is delayed beyond these timelines, the insurer must pay interest on the claim amount. For policies active for over 3 years with claims below certain thresholds, no investigation is required.
Can I appeal if my life insurance claim is rejected?
Yes. If your claim is rejected, you can file a complaint with the IRDAI’s Bima Bharosa portal or approach the Insurance Ombudsman in your region. The ombudsman can handle claims up to Rs.50 lakh. If the rejection was for non-disclosure and you believe it was not material to the risk, present your case with medical evidence. However, if there was genuine non-disclosure, the rejection is usually upheld.
Have you or someone you know faced a life insurance claim rejection? What happened? Share your experience in the comments – it helps others avoid the same situation.
Dear sir,
suppose mr x has two term insurance from 2 different company and they have not intimated about this information to both the companies.. he has not disclosed this at the time of proposal form.
after expiry of 3 years policyholder dies.how will it be claimed because there is two term insuarnce?
and will insurance companies honour the claim or not?
Dear Hemant,
Great Article!!!
Am looking to buy HDFC Life Click 2protect.
Pl advise if its good plan. Thanks.
hi,
My mother made a life insurance policy in 2008 but the agent somehow mentioned the age wrongly(10 years younger). she died in october due to cancer.
Now what will happen if i make a claim as hospital records show her real age. will the claim get regected and if it does do we get back the amount we paid (around 1 lac) as premiums
Hi Sir/Mam.
Hemant that’s great information shared by you & every one, this blog is very helpfull.Thanks much :),
One thing more i don’t see you post since long, are you available ? i need one help, if you can?
I have purchased Term insurance from LIC in 2010,
while taking insurance i specifically mentioned to agent that i am smoker,
but when i found policy in my hand , i didn’t see any column for smoker/non-smoker in policy form.
Please help/suggest if policy could create issue in future.
Note: i asked to agent about this , but he said weird answer don’t worry LIC considers this by default
LIC Agents are Representatives of LIC with IRDA Licence.
KNOW YOUR AGENT BEFORE TAKING A POLICY. KNOW THE PERFORMANCE, ACHIEVEMENTS, CLIENT BASE ETC.,
LIC Agents do not change companies for life time. But, many times Representatives coming from Private Insurance companies are not IRDA Licence Holders. They can leave the company next day after selling the policy. They are can not be held responsible for the sale.
Please know the AGENT before taking a policy because your nominee should not be running from pill to post.
Respected Sir/Madam,
My grand father has taken Birla sunlife insurance policy No 001387462 Dated 25/01/2008.It was 3 years premium pay policy which was duly paid. Unfortunately he expired 0n 02/06/13, I have submitted the death claim on 11/07/13 but when I was accepting a claim money I received a letter on 27/07/13 that your claim can not be settled as your policy was terminated on 25/02/13.
Sir, we have put so many complaints with Birla CGRO & IRDA Token No 07-13-040197 Dt 31-Jul-2013 ,08-13-001320 Dt 01-Aug-2013,08-13-004720 Dt 05-Aug-2013, 08-13-012270 Dt 08-Aug-2013, 08-13-025944 Dt 22-Aug-2013, 09-13-023417 Dt 20-Sep-2013 but company instead of satisfying and giving our death claim is misguiding IRDA & us.
Against our each complaint they are reiterating same response client clarified Policy is terminated & sending case closure request to IRDA. Sir, being a customer of Birla sunlife we are not even liable to know about our money. why company is not responding to our questions? By just saying your policy was terminated before company is free from its responsibility.
How can company terminate a policy without any information and even refunding foreclose amount till now. It’s clearly mentioned in IRDA life insurance Handbook, according to which they have break IRDA guideline.
Sir, as per company’s mail rcv on 20/09/2013 they have stated that policy gets terminated if its fund value comes to less than Rs 10000. In that case my policy was terminated on 25 may 2012 when its fund value comes to Rs 8715.0568(as per BSLI. statement).Than why my policy was continue till 25 feb 2013( according to BSLI) and why I have not rcv any information or foreclosure amount till I submit a claim.
Sir, so plz take necessary action in protection of policy holder interest.With lots of hope
Regards
Rajeev Arora
Dear Sir,
My grand father has taken Birla sun life insurance policy No 001387462 Dated 25/01/2008 unfortunately he expired 0n 02/06/13, I have submitted the death claim on 11/07/13(receiving enclosed) but when I was accepting a claim money I received a letter on 27/07/13 that your claim can not be settled as your policy was terminated on 25/02/13.
Sir I would like to know some questions,
Q1 If policy was terminated before why we were not informed ?
Q2 If policy was terminated before , sir as per my knowledge and law , I should receive the foreclosed amount?
Q3 If policy was terminated before how the branch staff accepted the death claim?
Q4 Sir as per insurance law the customer should be informed before the termination of policy so that if he wants he can continue it, where is that letter , sms ,or mail?
Q5 Sir at last I would like to know that a brand Co. like Birla sun life has no responsibility toward its customer?
Q6 My policy was 3 year pay premium mode for which I fully paid. In spite of getting interest my whole amount become zero in the name of charges for which even I was not known .
Sir I have asked the same questions to Birla Grievances centre for which I have send at least 10 mails and even a telephonic message for which I am getting the same answer that
“Your complaint have resolved your policy was terminated “
They have no answer to my any question
Sir in my opinion life insurance is done to provide economical aid to family members of the insurer and not for harassments.
Sir with very heavy heart I have to say that insurance policies are not for the interest of common man but just to misguide or mislead them.
so please take the action & do the necessary
With lots of expectations
Regards
Rajeev Arora
Hi Hemant,
I have recently applied for a LIC term insurance (SA: 40 lakhs). Medical tests are completed and I’m expecting the policy to be issued soon.
Recently I read somewhere that it is mandatory to declare all our old insurance policies in the application form. I have 1 endowment policy and 1 term insurance policy (from ICICI) but I haven’t mentioned about in the LIC term insurance application form.
Now what do I do? Can I change/update this even after the bond has been issued?
Thanks,
Nanda.
My application was rejected. Credit Sudhaar was my choice. Initially they were slow. But their counsellors were able to handle all my queries. I will give Credit Sudhaar a positive review
Hi Vikas,
I am planning to buy LIC Anmol Jeevan. I am asked to pay the amount first so that the agent can login and approve for medical test. How true is this? Incase of Anmol Jeevan is there anything that I need to be vary off? I am also planning HDFC Click to Protect policy(only two after I finish taking LIC). I generally do not trust private organizations over insurance policies but how good is HDFC click to protect?
Sorry its Hemant Beniwal not Vikas in addressing
hello,
I need 50lac life cover,which policy is better 1)HDFC CLICK TO PROGECT 2)SBI LIFE SBI Life Smart Shield 3) LIC Aulya JeeVAN
Which one is better for me,I m 25yrs and term 30-40yrs and better claim settelment retio???
A friend of mine already has 34 lac cover with LIC and has bought a policy with MAX LIFE two years back for 10 lac SA ( Life Partner Plus) , would his claim get rejected if it arose. His age is about 24 years. Pls advise.
HI !
I am 39 and have just taken Aviva i-Life term plan for 1 Cr today through online for 32 Years. Still Medical test is pending.Although I saw just now that claim settelment ratio for Aviva is 84% . Will it be a good policy in terms of claim settelment etc, because that is the only important that i see now ,since this product do not have any returns. Your view? Regards Kamlapati
Hi,
I have taken term plan icici iCare with option 2 (ADB for 50’000).
What I’m concern about is no medical test done by icici pru before issuing this policy. Though I had filled the policy detail online and to best of my knowledge but after going through all this information I’m a bit dough full if this can be an issue in case a claim is required in future.
Any suggestions
Raj
Just Adding some suggestions to Vikas comments for a Term Plan if a death claim is an early claim (less then 3 years from DOC) a deep, confidential investigation is done from insurer company on the other side after an early claim period is over (more then 3 years from DOC) 99 % all claims are done easily with flying colors.
Hi Vikas,
Thanks for the information. I have one more query.
If a person buys Term Policy from SBI with effective from today and if policy holder dies in a couple of days times…. then will his family gets the insured amount… Or is there any such rules that… one has to survive for a fixed tenure or has to pay a minimum fixed premium to get the insured amount.
Hi Ravi,
A term insurance become effective from the day policy is issued to you. Unlike health insurance there is no waiting period. However, there is one year exclusion for death due to suicides.
Im 33 years old. Now Im planning to go for a Term Plan at an amount of Rs. 30 Lakhs for 30 years. I have zeroed on two policies. 1) LIC Amulya Jeevan and 2) SBI Smart Shield (Without any riders). When I compare the two… SBI Smart Shield premium is quite less. Can you tell the advantage of SBI Smart Shield or the difference between two policies and also your CHOICE if you are to decide between the two.
Hi Ravi,
As far as term plan is considered the benefits are almost similar. The difference of premium is due to difference in mortality rates which each company calculates on the basis of their experience in the country. LIC hasn’t revised its term rates from a long time whereas SBI came out with their term rates much later. That’s the reason LIC is costlier then SBI.
To make a choice the premium is surely a consideration as you do not have any return in the product.
Dear Som,
MY suggestion on your query while filling up the proposal form say ” NO ” to diabetic and when the medicals happens if they found out that you are diabetic then they may accept your proposal with same premium or will ask for some extra loading also it depends upon your family background and health depending on the underwriter (person from HDFC signing your proposal form) the decision will be taken ALSO there are chances they might don’t come to know or they may not even conduct your Sugar Tests (Depending upon your Age).
Any ways ALL the Best !!!!!!!!!!!!!!!!
Dear Sir,
I want to buy Term Insurance from HDFC Life. I am little confused about dibetics, because I checked 3-4 doctors, some are telling I am diabetics some are telling I am not diabetics.
What sould I do? because HDFC life proposal form asking, do I have a diabetics. If I say no I am not a diabetics. I will go for medical test as per HDFC life panel doctor/hospitals. Is their decision is final? Either yes or no about diabetics.
Regards,
Som Wani
Dear Som,
You should go ahead with applying for term insurance. The difference among the doctors opinion may be due to the stage of diabities. In insurance companies also the level of diabities is identified during medical test.If perceived to be higher, you might have to pay extra premium.
HI Hemant,
i am new to TFL, and i like your articles. i was shocked to read the letter from HDFC rejecting the claim, saying that the death is happened within 91 days of the revival(Or Renewal) of the policy.
How is it even possible? it seems to be scary ..
so what exactly does it mean? is it like, death has to happen only after 91 days after you pay your renewal premium?
sorry i was ignorant.
Hi Vijay,
Refer to the policy document where terms & conditions are listed in detail.
hello sir,
Give me the details for the suicide death clime.
Hi Hemant,,
I have five LIC polices taken different branch with different Agent but I don,t know how can Agent filled up the Proposal form as only signature was made by me…Now my question is I need one TERM policy from LIC AMULYA Jeevan @ Rs.2500000.00..how can I check the other five polices proposal form for my best future claim settlement???????
Hi Pulak,
You can check your policy details from any LIC office but checking proposal form will be difficult.You will have to lodge a complaint for any misselling where company has a defined procedure which you can follow.
Hi Hemant,
It was by-chance that i come across your site and i found that there are lot of informative things which i was unaware although i had decent knowledge on Financial planning, Insurance, etc… Pl keep the good work going!!! Lot of readers will benefit from your knowledge.
I am 33 yrs old planning to buy a Term plan for a coverage of 1C. I have an existing policy coverage of 30L provided by my company but i would like to add a new policy while keeping the existing one in force. All along i was looking at a company that could charge me a less premium amount but after going through some of your posts i understand its not only about the premium but also the Claim ratio.
I have two questions.
1. Pl let us know if there are any other important parameters to consider before selecting the best term plan.
2. Although IRDA regulates the Insurance companies, what suppose the insurance company goes bankrupt? What will happen to policy holders?
Rgds,
Chandra
Thanks Chandra
I will suggest you to read this – how to select a term plan
https://www.retirewise.in/2011/03/best-term-insurance-plan-india.html
Hello,
I bought a term policy from LIC. for 30 lakhs.
Earlier I have another 2 more unit linked policies for sum assured 5 lakhs each from icici & bila sun and also one 5 lakh endowment from L I C
my question is when filling the proposal form for the term policy Ihave not mentioned the other policies detail . will there be any problem during claim in future?
thanks,
Hi Ahmed,
Insurance is a contract of “utmost good faith” & you as a proposer need to share all relevant details in the proposal form. Company have a good reason to deny the claim if they find that you shared incomplete or incorrect information in the proposal form. To avoid this you can share the details now including policy name, sum assured, term & premium – take receiving from them & wait for their reaction.
Hello ,
I am abhishek and have taken term plan of 50Lac from LIC in 2011.
Proposal has been accepted and got the policy agreement paper as well.
My concern here is , I have provided all the information correctly but there is chance Agent usual do some editing if they think so.I have read your article why Claim is rejected and in which scenario.
So my question is Can we get the exact copy of proposal , what details was submitted to the company to avoid any future problem if in case.
Why i am asking some silly query , some of the Agent do edit the contents , to get the policy running specially in LIC coz they get good Commission on Insurance.
Please help us.
Thanks
Abhishek Kumar
Hi Abhishek,
Normally all private insurance companies send a copy of proposal form submitted but LIC is not following this.
But you can get copy of it from the branch where your insurance agent is registered. Either ask your agent or you can directly reach their office.
Hi Hemant
Very nice and informative article. Thanks a lot.
Wish to read more from you, to enrich my knowledge.
Regards
Abhinav
Thanks 🙂
Last Month i applied for ICICI I Protect Option 1 after going thru medical test the company had postponded the policy for 6 months saying i have a high BP and Overweight then i have informed them BP was high as i climbed up the staircase while going to pathlogy lab and for overweight i have asked to charge me some extra amount and give me the policy can anyone suggest will i get the policy or not if not what is the next option avaliable as i have recently taken a housing loan wanted to protect my family
Hi Rajesh,
We fill proposal form of insurance form – this means we are proposing them to accept our risks. This is similar to proposing a girl – she may accept she may reject. 😉
So my suggestion is if ICICI is not accepting it you can look for other options.
https://www.retirewise.in/2011/03/best-term-insurance-plan-india.html
LIC Endowment Assurance Plans & Policies LIC Joint Life Plans & Policies LIC Unit Plans & Policies We give you the Best, Reliable Best Insurance Get best deal on all type of insurance I Gives Expert Advice on your insurance needs with free tax consultation maximum benefits and returns.
Hi Hemant,
Let me first congratulate you and thank you for this wonderful website and all your articles which has made me a lot more confident about my investments and helped me love finance planning than dread it 🙂
Would you also be able to elaborate on term policies with increasing sum assured? I came across a product of SBI Life called Smart Shield where the sum assured keeps increasing after a periodic interval, with the intent of basically keeping your SA ahead of inflation. I wouldn’t know if these are again just policies to fool the masses or do they really carry weight and are worth a look.
I am not sure if any other insurance providers have such policies and if yes, could you do us all a favor by writing an article on them.
Meanwhile, I keep learning as you keep teaching…
God Bless people like you…
Hi Arun,
My suggestion to my clients is stick with normal term plans – if in case they require some more insurance they can buy in future.
With increasing term there is one problem that after certain age your insurance requirement peaks out & start coming down – but policy still keep increasing term. unnecessary you have to pay some extra premium. But if you are comfortable with it – you can buy it. Buying term is one of the best financial decision one can make.
Rejection for Insurance claim is because of mis guidence of the sales representative.
In LIC normally Term Insurance, let it be for Rs. 5 lakhs also, given after the approval of medical test only given.
In LIC, there is no riders in Term Insurance plans .
LIC takes normally approx. 15 to 20 working days for examining the medical test papers before approving the proposal.
Most of the people look for lesser premium and end up in loss.
So, Always look for best claim ratio to avoid confusion in the end.
Hi Shiva,
Partially agree with you.
Recently I have purchased a term plan from ICICI Pru life insurance(iProtect) for Rs. 55 lakhs. I have undergone medical test and everything should seems ok. I have issued policy documents.
Is this a right product & company?
Hi Kiran,
ICICI is having good claim settlement ration. In future if you need to add some more insurance – take it from LIC.
Dear Hemant,
I regularly read articles posted on TFL and the links provided to them by manshu. I find them quite informative and i would like to commend you on your good work! Keep it up!
I would like to share my views regarding Life Insurance. Till 2011, when i actually became interested in Financial planning (I am 34y!), i was also of the opinion that Cash Back policies are the best form of Life Insurance! However, i have realised that Nothing can beat Term Plans in terms of Cover and the Low Premium. Moreover, whatever excess premium which one is paying in Cash Back Policies – ULIPs, Endowment Policies etc – if invested properly, would give better returns over a period of time. I have also understood that it would be better to have two rather than one term insurance policy and i have decided to go for one LIC policy for Rs 25 lacs and another one of KOTAK (Preferred Term Plan) for Rs 40 lacs with Rs 10 lacs each of Accidental Death Benefit(ADB) and Permanent Disability Benefit(PDB) respectively. I would be paying an annual premium of Rs 22,000/- roughly for the same.
I feel you should stress in your blog, the importance of ADB and PDB as well.
Kindly comment on my choice of policies as well.
Thank you
Dr Vijay,
You are going in the right direction – just 2 suggestions
1 – Don’t take ADB as rider go for separate Comprehensive accident policy.
2 – 10 lakh is a very small amount.
I TAKE ICICI PRUDENTIAL PURE PROTECT ELITE TERM PLAN OF RS. 30 LACS. IS THIS A GOOD TERM PLAN?
Hi Neeraj,
If you have provided right information – need not to worry. ICICI is having good claim settlement ratio.
Dear Hemant,
I am planning to take Life insurance but my problem is somehow different than usual ones, but thats how it is…
In all me Educational Certificates & Passport there is incorrect (14-02-1975) date of birth(DOB). where as in my PAN card, Bank a/c & all other financial documents, including exiting LIC policies, the original DOB (20-09-1975) is present.
Now it is too late to get the DOB changed in all the Educational Certificates & Passport.
Which DOB should I quote while applying for Life Insurance so that there is no problem in claim because of DOB? or is there any pariticular document that the claim settlement dept looks for DOB, during the demise of an individual.?
Please suggest what should I do to Aviod any consequences.
Thanks,
Raj
Hi Raj,
You should quote the right date & provide the supporting documents.
Your case we call “simple matter, multiple complication” we keep delaying or ignoring small things but some stage they turn into big problems. So try to solve things as soon as possible.
Thanks Hemant for your comment.
But what is the right way to solve this problem?
Pls advise, if there is there any pariticular document for DOB that the claim settlement dept looks for DOB, during accepting or rejecting the claim in case of demise of an individual?
Thanks
Raj
Dear Raj,
While filling a proposal form, an applicant is required to furnish his DATE OF BIRTH and a supporting document in lieu of that, whether it be PASSPORT/DRIVING LICENSE/PAN/VOTER ID etc..
As you have put it, you want your DOB to be 20/09/1975 and you have a support document in form of PAN for that, please furnish copy of PAN card only when you apply for a policy..
In each of the policy document from any of the company, be it KOTAK/ICICI PRUDENTIAL/BAJAJ etc., there is a list of documents required at the time of claim is mentioned in the end..Me being an agent of KOTAK, i can tell you what KOTAK wants in case of claim..
KOTAK will ask for DEATH CERTIFICATE/HOSPITAL REPORT, original policy document, and PROOF OF AGE, if this has not been previously admitted by the company..So that means, they will take the age or date of birth as the one provided by you in the proposal form and the supporting document (PAN in your case) as the exact DOB..You can check the list of document in your policy booklet from any insurance company…
My advice would be, just stick with one date of birth and its proof for all of your financial transaction as it will reduce confusion on everybody’s part..
Dhawal Sharma
Hi Dhawal,
Thanks a lot for sharing your views. Thankfully going by the same thought process I have mentioned the real DOB with supporting proof for all my finalcial transactions.
My only worry was incorrect DOB on Passport. But now since you said it wont be required, its such a relief .
thanks Hemant & Dhawal.
Cheers!
Thanks for guiding Raj.
I had purchased a term plan for Rs. 50 lakhs from Metlife online and underwent the medical tests and gave all the medical details alongwith the form. My application has been rejected without assigning any reason.
Hi Manoj,
It’s unfortunate but some companies already get this declaration signed by you “I acknowledge and agree that Insurer has the right to reject my application without assigning any reason whatsoever.”
One more thing you still have to mention this rejection in your next proposal form – if new company ask for.
Dear Hemant,
This article is bang on target..I myself being an AGENT dread such a day where claim is rejected because of some information withheld by the client or where i have put a tick HERE instead of THERE…
Yes, TERM PLAN is the REAL INSURANCE and its very cheap at that but this product is the most complicated one too..You are required to share all aspects of information with the company, from your present/past life style (Smoker/drinker) (working conditions) (Past/present medical history including family history) to earnings to your height-weight etc..So i think the laxness on part of everybody; from client hiding a minor illness (minor according to him) – Agent ignoring the actual height-weight (Because it did not matter, according to him) – company in a hurry to issue policies (To show up their business figuers)..
I think general public + agents + company all should be sensitized about the whole process..
Finally, fully agree with you on all your replys to Vasan…
Hi Dhawal,
Your views are always refreshing – rare breed of insurance advisor. 🙂
Can you please help Raj – who have asked question regarding Date of Birth on this post.
Thanks Again Hemant….For making an effort on my behalf to approach Dhawal… Expecting some response from Dhawal on this.
Thanks,
Raj
Thank you for your detailed response. Not sure why you thought about not publishing my first comment. I don’t think there was anything offensive in it.
Perhaps my tone was incorrect. My apologies.
I only pointed out that the ‘contact’ there should not point to you and the letter puts HDFC in bad light. This takes courage to do so.
My point is reader psychology would probably be to be wary of HDFC (and Aegon Religare, justifiably in this case). I don’t work for these guys.
My second point was that you are only one I know who has hit the nail on the head about poor claim rejection of privates. So this is only an appreciation. Perhaps I didn’t quote you correctly but the essence is the same I guess.
My last points about CFPs. Again no disrespect to you anyone else. My point when a CFP recommends A or B MF it is one thing. When he recommends term plan A or B it is quite another. I read somewhere even MFs at the bottom of the heap perform reasonably well. So choice of A or B fund wouldn’t hurt the client as much as a rejection of a term policy esp. if that was taken on the recommendation of a CFP.
CFPs dont have any legal responsibility. But the moral responsibility in such cases is large enough. Just wanted to point this out.
Manish who was dead against LIC when he began his blog has now started recommending to take one LIC term plan to many!
Last issue about affordability, thanks for educating me. I didn’t know that. You are saying a CFP can survive only by making plans and not recommending any product to a client.
No issues Vasan – keep visiting TFL & sharing your views.
Hi Vasan,
Here is my take on one of the questions which you have mentioned in your comment..
>Private agents are better trained than LIC agents. So they should educate their clients better.
I will say Private agents are better trained only to sell their products, yes they are better trained with the good marketing/selling techniques, but they will never think about clients need, their only concern is how they can sell the insurance product to the clients. And I am completely agreed with Hemant, that in India, Term plan are the least sold insurance products, as private agents/brokers are not used to get handsome amount of commission on the Term Plan selling.
Insurance agents and companies need to think a lot more about the clients welfare, only showing good Ads in TVs/newspaper will not make their insurance policies, plans much better.
Thanks
Hi Vishal,
In any insurance company training means sales training. 🙁
Nice article. Thank you.
Couple of questions:
1. Reg. the letter from HFDC. It doesn’t seem to be a term plan. The customer is to blame for choosing a wrong product or for not having enough insurance.
Has the insurer done anything wrong? This seems to the impression one gets from the article. Could you be sued by HDFC for slander?
2. Why should one contact you immediately?
3. Being honest upfront and providing all material evidence is common sense. While this is important the real issue is a question you asked in your previous post on term insurance:
Private agents are better trained than LIC agents. So they should educate their clients better. If claim rejection is only because of not providing/suppressing material information privates should have better claim rejection ratio.
The ‘real’ answer would be interesting!!
My point is the issue lies deeper than just client common sense.
Choosing/ recommending a term plan is a big decision made by the CFP. (yes I know about ethics and other blah blah for CFP)
All other suggestions (MFs shares etc.) will not have such a big influence.
If I am not wrong today CFPs cannot afford to just plan. They will be forced to recommend at least 2/3 different firms for all products.
Hi Vasan,
Thanks for adding comment – I think few of the points you have raised are due to misunderstanding. (and few others – even I don’t know the reason)
First let me tell you – I was having option for not approving your comment or editing it. (but normally I don’t do this)
One more thing for every reader. I strongly believe in this quote “Give a man a fish and you feed him for a day. Teach a man how to fish and you feed him for a lifetime.” So here I am trying to teach readers rather giving ready-made solutions. Even in future I will write many open-ended posts. So that people share their views, try to find answers & in whole exercise learn lessons.
Please find my inline reply.
Couple of questions:
1. Reg. the letter from HFDC. It doesn’t seem to be a term plan.
> I know this is not term plan & I think I have not written term plan for this letter. More than 99% of the policies that are sold in India are not term plans – people should go through their policies & read exclusions so that family life does not become miserable if they are not around.
The customer is to blame for choosing a wrong product or for not having enough insurance.
> Some time I write harsh replies on reader’s comment bcoz they have time to correct their mistakes. But I am not that insensitive that I blame a person who is not around.
Has the insurer done anything wrong? This seems to the impression one gets from the article.
>No not at all – they have followed the standard process.
Could you be sued by HDFC for slander?
>Ya why not even Religare Aigon can join the case.
2. Why should one contact you immediately?
>I have not created this CONTACT link – this is because I use a wordpress plugin which create automatic links for few keywords. “please contact us immediately” line is part of extracts that I have picked from Religare website. 🙁
3. Being honest upfront and providing all material evidence is common sense. While this is important the real issue is a question you asked in your previous post on term insurance:
Private agents are better trained than LIC agents. So they should educate their clients better. If claim rejection is only because of not providing/suppressing material information privates should have better claim rejection ratio.
> Actual comment was: “If the only reason of claim rejection is filling form or disclosure – claim settlement ratios of insurance cos would have been almost similar.” Or would have been better for private insurance cos – as I feel they have better agents & good training systems.
The ‘real’ answer would be interesting!!
My point is the issue lies deeper than just client common sense.
Choosing/ recommending a term plan is a big decision made by the CFP. (yes I know about ethics and other blah blah for CFP)
> Yes a financial planner can be really helpful in any important financial decision. When you know every blah blah thing about CFP – there is no need to add more.
All other suggestions (MFs shares etc.) will not have such a big influence.
> I am not sure I have understood your point right but even investment planning is very important part of once life.
If I am not wrong today CFPs cannot afford to just plan. They will be forced to recommend at least 2/3 different firms for all products.
> Financial Planners can afford to make just plans but it’s the client who can’t afford those plans. There are many ways financial planner charges globally but most common is Fee-based(fee + commission) & Fee-only(only fees – they will not take any commission from manufacturer)
Fee Based: In USA average financial planning fees is $2876(Rs 1.29 lakh + commission) if we consider a purchase power parity of 1:5 – we are talking about Indian Financial Planners charging Rs 25000. But still most of good planners charging less than this in India.
Fee Only: Fee only planners charge much higher than this & I don’t need to explain why. And to add there are less than 1000 Fee Only planners across the globe.
Hope I solved most of your queries.