Life Insurance is designed to safeguard your family in the case of a tragic incident. It essentially serves as a financial safety that keeps them going during a crisis. What if, meanwhile, that safety had gaps in it, permitting them to fall through?
One of the most distressing experiences is having your life insurance policy claim denied. Financial strain is added to an already distressing situation. If the policyholder is the family’s earner, the issues become more critical.
Here are 7 reasons why do we face obstacles in learning life insurance planning:-
- Incorrect Information- a Life insurance policy is a business agreement between the policyholder and the insurance provider. While the policyholder trusts the insurance company to satisfy their claim in a time of need, the insurance company also assumes that the information provided about the life insured is authentic. The policyholder information is considered at face value. However, to lower their premium, one is tempted to suppress some aspects of their data.
- Detain In Premium Payment – Unintentionally, a policyholder may overlook paying the premium. The life insurance agent then sends a reminder by email, phone, and text message to meet the necessary payments. There is also a grace period, which might last up to 30 days in some situations. If the policyholder does not respond, the insurance is considered expired. All of your previous premium payments are likewise destroyed, and no amount can be recovered back. To keep your coverage active, set up an auto-debit or ECS instruction with your bank. Alternatively, making a payment calendar and sticking to it works well.
- Unrevealed Medical History -Your term insurance coverage and premium are determined by the company’s risk after taking into account your medical history. As a result, neglecting any medical testing or omitting information about surgeries, family diseases, or other circumstances might become a valid reason for your term insurance claim to be rejected. When buying a life insurance policy, you must undertake a medical evaluation. Without proper testing, the insurer may even argue that a serious disease was pre-existing. Make sure you give the insurer all of the pertinent information about you and your family’s medical records. Check the data offered twice to reduce the possibility of claim rejection and to assure that all of your pre-existing conditions are taken into account.
- Insurance companies, like the contestability clause, maintain a standard exclusion list of deaths to limit losses. Life insurance does not cover all forms of death. If the policyholder was involved in dangerous activities or died of a pre-existing ailment, his or her life insurance claim will be denied. Insurers scrutinize the cause of death in extreme detail. Natural disasters, terrorist attacks, and homicides are not usually covered by life insurance policy plans.
- Insurance companies provide sufficient time for making a claim. Although claims are rarely denied as a result of late submission these days, it is possible if the delay is excessive. Insurance firms have been told not to reject claims due to delays by India’s Insurance Regulatory and Development Authority. Family members of policyholders, on the other hand, should file the claim as soon as possible. Insurers may not completely reject a late claim, but they may take some time to pay it, a life insurance agent would be of great help in that condition.
- Insurance is a risky business, and insurance relies on good risk assessment to reduce the risk you will need a life cover i.e. any best life insurance policy. To acquire a thorough picture of the risk, insurers double-check every medical data provided by an applicant. Medical testing is performed by most firms, especially in cases of high age or high-risk coverage. If you refuse to do the tests, your claim will almost certainly be denied by the insurer due to a pre-existing condition. It is usually a good idea to have medical tests since if you get a test, all pre-existing conditions are covered.
- As part of their retirement preparation, your parents should have obtained life insurance. According to a survey published by the AARP Public Policy Institute in 2018, roughly 6.2 million youths and counting are caring for a parent, in-law, or grandparent.
If you’re looking for your aging parent at home, in long-term care, or a nursing facility, life insurance with a long-term care premium can assist.
To get the most out of life insurance, contact a financial adviser, accountant, and estate attorney early in the investigation to ensure you have adequate coverage that adapts to your changing circumstances.