We take life insurance coverage to protect our loved ones from the undue financial burden once we leave the world. You’d need to be aware of the course of action that needs to be followed in case a death claim arises. By following that, it would be possible to get the claim process completed in a timely manner.
There are assumptions in the market that the insurance companies are solely working as a profit making corporation and they do not pay claim benefit when the need arises. This is not true. The insurance company is not aiming only to make money, they simply need to verify that the claimant/insured didn’t mislead the insurance company during purchase of policy and the intentions were entirely genuine to safeguard their family in the case of any untoward incident. After verification of facts, the insurance company promptly pays the death benefit to the claimant who can use it as per the needs of his/her family. When you purchase a life insurance policy, the insurance company provides you coverage in good faith and uses due diligence to conduct medicals of the client. The insurance company has the right to ask for your medical history from the family doctor or specialist that you have visited in the past for any major health concern.
When a claim arises, what should you do! First, immediately, look into your policy and verify with insurance company or your advisor that it is ‘in force’. Then, request the company to send the required claim forms which usually include claimant statement, physician statement, death certificate and additional documents (if someone dies abroad). Gather all documents, get the physician statement completed by the doctor, complete claimant statement and then, submit documents to claims department of insurance company. If you are not certain about any point, you may seek the guidance of your insurance agent since he has a better understanding of the claim procedure. Now, depending upon the time duration that your policy has been in force, it may be subject to contestability period (if it has been in force for less than two years). Contestability period means that the insurance company has the right to probe deeper into the claim. They may probe the details by consulting the provincial health listing to verify the physicians that insured had consulted during the past 5-10 years. For this, the claimant needs to sign an authorization for the release of health records. Then, insurance company requests medical information from the physicians to verify that the medical facts submitted by insured during the purchase of policy are correct and, that the insured didn’t submit any falsified information during the purchase of policy. Also, they verify the facts related to insured’s death to rule out any false information or foul play.
It is important that you do not submit any falsified information during the purchase of policy. Because, during the emergence of a claim, the insurance company will verify in detail the medical facts submitted by the claimant and at that time, if any falsified information comes to the notice of insurance company, you will lose the claim benefit. The purpose of buying insurance for your family’s security is defeated. If somebody hides his smoking status or other physical/mental ailments thinking that he can do away without this information during a claim, it may have a derogatory effect on the overall financial estimates of insurance company. The rate of premiums is calculated by taking into account client’s health history and lifestyle. So if at that stage, the actual health history and lifestyle are not brought to the attention of insurance company, the premiums may be undercharged against the actual cost. Also, if the company had come to know about the inaccuracy/ untruthfulness of submitted facts, it would not have issued the policy at all.
However, it doesn’t mean that the insurance company is aiming solely to deny the claim. They simply need to verify that the claimant/ insured didn’t mislead the insurance company during the purchase of policy. Their intentions were entirely genuine and they only meant to safeguard their family in the case of any untoward incident. After verification of facts, the insurance company promptly pays the death benefit to the claimant who can use it as per the needs of his/her family.
This information is for general purpose only. Every insurance company has its own internal claim handling procedure and criteria applicable to the coverage that the insured has. For more information, contact your insurance company. Keep in mind that life insurance is a valuable resource to secure your family during their times of need. Always submit true facts to the insurer when you purchase a policy. This will save your family from the unwanted hassles when they actually need that resource to cope up with their financial needs.
As an independent insurance advisor working through Punjab Insurance Agency and dealing with different insurance companies, I can assist you to avail the best insurance coverage suitable for your needs and resources. Also, I can also help you to purchase mortgage insurance, super visa insurance, disability insurance, critical illness insurance, extended medical plans, group medical plans, RESP, RRSP, travel insurance, TFSA accounts, health and dental plans along with estate planning suitable for your needs and resources.
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