There are 2 things that you need to check when you receive your term policy document / intimation.
1. Inclusions and exclusions of your policy.
Every term policy need not necessarily cover death under any circumstance.
- Some cover death from terrorist attacks, some don’t.
- Some cover death from natural disasters such as floods, earthquake, etc., and some others don’t.
- Some will give you the claim if you die in an accident but were probably a little drunk while driving. Some other term plans don’t.
- Some will allow claim even if you die bungee-jumping in New Zealand, some others will not allow.
- Some will cover you if you were breaching any act of law, while some other term plans don’t.
What about your term policy? Does it cover what it said it would when you were buying it? Check the term policy document – all inclusions and exclusions will be clearly mentioned in it. Ensure that it is exactly the way it was committed to you.
2. Errors and omissions in your policy document.
It is possible that at times, there could be an error in your term policy document. And some of these could be very critical errors that might result in rejection of the claim itself. Here are some things that you need to check for.
• Your full name – check for spelling errors and that it matches your name as per your identity proof
• Your gender and date of birth – check for errors, especially date and month getting interchanged such as 05/06/1973 becoming 06/05/1973
• The total amount of Sum Assured (or Life Insurance cover) – check if the no. of zeros are correct such as Rs. 50 lakhs should indeed be Rs. 50,00,000 and not Rs. 5,00,000!
• If you have opted for an additional (rider) benefit such as Accidental Death, Disability or Critical Illness, do ensure they are clearly mentioned with their relevant Sum Assured. e.g. Accidental Death Benefit rider for Rs. 30 lakhs.
• Ensure that the premium and its mode (frequency) are correct. i.e. Rs. 25,000 payable every 6 months, or Rs. 48,000 payable every year. Take a note of the next premium due date.
• If you have declared any previously purchased life insurance or term policy either from any other insurance company or from the same insurance company itself, make sure that it is clearly mentioned in the copy of the application form that you get back.
• Most importantly, every life insurance policy (including term policy) comes with a photocopy/printout of the application form that you filled while applying for the policy. This is mandated by the regulator (IRDA). Check the copy of the application thoroughly – and here I mean every little information that you have filled. Has everything you have mentioned been included? Is there any error? Any previous medical condition such as diabetes, any minor surgery, your smoking and drinking habit, your height and weight especially, anything else that you have mentioned while applying – has it been clearly mentioned on the form? If not, and if your death occurs because of a related reason, your claim may be denied on grounds of non-disclosure!
• Sometimes it is possible that you may have provided additional information when the company asked you, by email or through a letter in writing. Please ensure this information is acknowledged by the insurance company and that you keep a copy of the same in your records. Ideally, it is best included in the application form itself.
Ensure both the above checks are conducted the moment you receive your term policy document.
And what if you find out that there is indeed a problem in your term policy document.
– In case there is an exclusion in the policy that you are not okay with, all is not lost. Thanks to the regulator, every insurance policy comes with a FREE-LOOK period. It means that any insurance buyer in India can return the policy back to the insurance company and get a full refund within 15 days of receiving the policy document. Every insurance company in India honors this completely.
– In case there is an error in your term policy document, ensure that you get it corrected by the insurance company. If there is any error in the application form copy that you receive, do ensure that this is corrected as well. You may sometimes receive a confirmation from the insurance company through an email or a letter. Do attach that to the policy document and keep it along with the other papers – remember, if required later, you are not there to explain anything – only such printed communication can help.
Don’t compromise on anything mentioned here. And ensure that the job of protecting your family is complete and perfectly done.