Well begun is half done, as the saying goes. Starting out correctly at the application stage can have a major impact on how your life-insurance claims get processed. The last thing you want for yourself, or your loved ones, is running helter-skelter during an emergency to sort out a claim – all because of a mistake you made at the time of taking the policy. It’s a real, but easily avoidable headache.
Here are some of the top errors people make when they take their policy, which can cost them and their families peace of mind when it comes to filing a claim.
- Not filling your application yourself: It’s very tempting to simply sign where your agent asks you to, and let them fill the form. As for online applications, ensure that you fill your application form in an unhurried and careful manner with full disclosures about your present state. Be especially clear about any pre-existing conditions and declare any vices, such as smoking or drinking, to their actual extent.
- Not stating beneficiaries’ details clearly: Your claim can get needlessly drawn out in the verification process because you were casual about nominee details. Also, keep your nominee details updated whenever a change is needed, e.g. if you want to incorporate your spouse, or change the allocation proportion of settlement between nominees. Keep their ID information with you when filling your form to ensure that you don’t incorrectly enter their data.
- Not informing your nominees and families about the policies you’ve taken: Life Insurance plays a primal role in a family’s financial protection. So, it’s only fair that you inform the key members of your family about the whereabouts and details of necessary policy documents, and that you discuss the steps to be taken to file a claim. If you have gone through an agent, then ensure that his or her contact details are kept updated and available to your nominees, so that he/she can assist them as needed.
All tax savings and financial portfolio planning aside, most of all, you want your life insurance to be a boon to your nominees in an unfortunate situation. Make sure you’ve taken the right steps to pave an easy path through a difficult time for them.