What is the point in buying an insurance policy if you or your loved ones are unable to seek the claim amount? It does not matter if you are banking on health, motor or life insurance. The purpose of buying insurance is defeated if it does not serve your purpose when needed. This explains why you must pay attention to the claim settlement ratio of each insurance company along with its corresponding insurance business before deciding which one to buy.
One may wonder the purpose behind checking the claim settlement ratio of every insurance company considering how the Insurance Regulatory and Development Authority of India (IRDAI) has mandated all insurers to settle insurance claims within 30 days of receiving the documents. This is because some insurance companies have longer claim settlement processes as opposed to the guidelines put down by the IRDAI. This explains why policyholders must keep themselves abreast of the latest developments in the claim settlement process to ensure that their claim is settled in full and on time.
Contact your insurer immediately
Time matters and that is why you must be quick to get in touch with your insurer. The idea behind buying life insurance is to financially support the nominee in case of the sudden death of the policyholder. Beneficiaries of the policy must submit the document along with the death certificate within a week or so to claim the policy amount. Insurance companies take about a month’s time to settle the claim. This is true of health insurance plans too wherein the insured must intimate the insurer before or immediately after getting hospitalized to ensure timely claim settlement of the amount spent on treatment.
However, if the policy nominees do not file the claim to the insurance policy within the given timeline, the process of claim settlement may become more time-consuming.
Check insurers’ solvency ratio
Many people do not proceed beyond looking at the claim settlement ratio published on the insurance company’s site. However, knowing this detail may not be enough as a lot depends on how much cash in reserve the insurance company has at any point in time. To do this, check the solvency ratio of the insurer on the IRDAI website. The IRDAI guidelines state that insurance companies must maintain a solvency ratio of 150 per cent to lessen the risk of bankruptcy in case of an unforeseen surge in claims.
Looking at the solvency ratio is important as it helps gauge if the insurance company has enough cash to settle both its short-term and long-term claims.
Share correct and complete information
Do not make the mistake of letting your agent fill in the policy details. The first rule of buying an insurance policy states that the intended customer must submit complete and correct details in the policy document. These details may include name and birth details, lifestyle habits, history of diseases, details of other policies held and other information as requested in the policy document. Besides, one must share all supporting documents like identity and address proofs, medical bills and other insurance documents along with the insurance policy form. Without these documents, claims cannot be validated. The insurance company has the right to withhold a claim citing any missing document or incorrect information stated in the policy.
Read the fine print to know about sub-limits
Did you know that many people with health insurance policies receive only a part of the claim amount? This is because many of them ignore to read the fine print in the policy that contains details of room rent and various sub-limits, thus, preventing the insured to claim the amount to pay the hospital bills. Not knowing about health insurance room sub-limits before paying for a health cover can cost you dearly. A recent tweet by Shrehith Karkera, Co-founder, Finshots explained how his friend had received only ₹40,000 for a ₹4 lakh health claim raised because his policy had “disease wise sub-limits”.
For the unversed, room-rent sub-limit in any health insurance policy means that the cost of the daily room rent and daily ICU rent and associated expenses will be capped at a percentage of the sum insured, thus, limiting the payout by the insurance company. Knowing this in advance can help the customer choose a health insurance policy accordingly.
Know your rights
The IRDAI gives some necessary rights to the policyholders. Knowing them is essential to making a claim and ensuring the success of the claim settlement amount. For example, if an insurance company does not accept or reject the claim settlement request within 30 days from the receipt of the last necessary document, it will be liable to pay penalty interest to the insured person.
There may be myriad other elements or parameters that the insured must be aware of, which will not help them receive their claims on time but also ensure full compensation in case of any folly by the insurance company.
