One purchases a life insurance policy in order to ensure that their family is secure and can meet their financial commitments without difficulty. As a result, if you, the policyholder, die at any moment during the policy’s term, your family will be entitled to the predetermined sum assured.
Fortunately, the coverage of life insurance for NRI begins immediately once it is purchased, allowing the late policyholder’s family to file a claim and receive the death or maturity if any, benefit. Most individuals are unaware that several policies provide coverage for deaths in the first year. In this article, you will learn what to do if the policyholder dies soon after purchasing life insurance coverage.
What Happens If You Die Just After Purchasing Life Insurance?
If you unfortunately pass away after acquiring a life insurance policy, your beneficiaries can still get the death benefit. Life insurance policies come with a waiting period, known as the contestability period, that lasts three years from the policy’s issuing date. During this time, the insurance company has the right to examine the circumstances of the policyholder’s death
If the insured individual dies during the contestability period, the insurer will thoroughly investigate the application, medical records, and any other relevant information to confirm that no fraud or misrepresentation occurred during the application process. After the investigation is completed, and everything is confirmed to be in order, the beneficiaries are entitled to the death benefit.
Steps to Take Following the Insured’s Death
Most life insurance policies provide for a death benefit payout if the policyholder dies during the first year of the policy. This will also be determined by the nature of the death, and the claims department of the life insurance company may conduct additional investigations. However, here are some things you can do to make the claims process easier:
Collect the death certificate: When the insured dies, make sure to get both the death certificate and a letter from the examining doctor. This document is essential in a legal sense because it records the time, reason, and date of death, as well as the name of the hospital and the examining doctor’s contact information. If the insured did not die of natural causes, this document and letter can save you and your insurer a lot of time.
Get in touch with the insurer: If you purchase life insurance for NRI online, you can contact your insurer online to communicate about the policyholder’s demise. To maintain the record of the conversation you had on call, write them an email as well. Some families may not know who their life insurance provider is; in this instance, they could contact the National Association of Insurance Commissioners.
Fill Out the Claim Form: The claim form is the most important part of the claims procedure, and it should be filled out correctly. If the insured unfortunately passed away due to unnatural causes or an accident, make sure you write it accurately on the form. One of the beneficiaries or the nominee will be responsible for completing this task and submitting the required documents for the claim process to the insurance company. One needs to make sure this form should be filled out by approved personnel in order to avoid the submission of inaccurate details.
Allow the Insurer to review the claim: Though most claims can be evaluated in a few weeks, according to regulatory requirements, life insurance firms can take up to 30 days to review a claim, while for an extensive inquiry, such as death by suicide, this time schedule can be extended to 90 days. However, at the end of the review, the insurance provider may reject the claim form if it contains insufficient information.
What Happens If You Die Just After Purchasing Life Insurance?
If you, unfortunately, passed away after acquiring life insurance for NRI policy, your beneficiaries can still get the death benefit. Life insurance policies feature a waiting period, known as the contestability period, the last three years from the policy’s issuing date. During this time, the insurance company has the right to investigate the circumstances of the policyholder’s death.
If the insured individual dies during the contestability period, the insurer will thoroughly investigate the application, medical records, and any other relevant information to confirm that no fraud or misrepresentation occurred during the application process. After the evaluation is completed, and everything is confirmed to be in order, the beneficiaries will be entitled to the death benefit.
Reasons for Rejecting the Claim
To be eligible for life insurance death benefits, the death claim must be filed correctly. However, certain claims may be rejected for reasons that were not considered before purchasing the life insurance coverage. Here are three of the most typical reasons why your claim may be rejected:
Incorrect Information: Most of the time, incorrect or incomplete information leads to claim rejections, which is why you should double-check and confirm every detail you include on the claim form.
Missing Documentation: Always supply all necessary documents as requested during the claims procedure. Even a hospitalization expense could be critical for the insurer, affecting the disbursement of your claim.
Poor claim settlement ratio: When purchasing a life insurance for NRI policy in India, your insurer’s claim settlement ratio is quite important for claim settlement. Only choose a life insurance provider that has a higher claim settlement ratio.
So we are saying,
Given the unpredictability of death, purchasing life insurance for NRI coverage as soon as possible is recommended. However, it is equally crucial to educate your family about the claim process and prepare them for the worst in case you die soon after purchasing the insurance. In many cases, life insurance companies will want to perform a thorough investigation, which might cause further mental anguish for your loved ones if you die soon after acquiring a life insurance policy.
