In our modern day lives, we are lucky to have a lot of tools to protect us from these unexpected changes that life throws at us. But do we actually make extensive use of these tools? Sadly, we don't. Life insurance, for instance, is approached with a very casual attitude.
Most people just buy a policy without really believing that the chance of them dying within the tenure is very possible. As a result, they do not inform their kin about the claim procedure. A lot of times old parents or young children are left clueless as to how to get the money that they rightfully deserve after the death of the policyholder. To prevent such a thing from happening to your family, make sure you discuss the claim process with your nominees well in advance.
Explain the policy and its benefits
If your nominees are very young or for any other reason unfamiliar with the insurance process, explain it to them. Make them understand that you are building a fund for them, in case they lose you suddenly. Give them the assurance that even in your absence you will have provisions for them. This will not only make them feel secured, it will help them facilitate the claim process when required.
Share copies of the documents
Often, policyholders make the grave mistake of keeping all the policy documents in a place which only they have access to. You must make sure that your nominees know exactly where your documents are so that they can easily access them at the time of filing the claim. Also, keep multiple copies of the documents at multiple locations so that even if some are lost, the process can be initiated without much trouble.
Explain the claim process
An insurance claim process is very simple, if followed methodically. First of all, the claim needs to be filed. For this the nominee has to procure an application form and fill it out. Next, the form needs to be submitted with all the required documents, including copies of the original policy document. Along with that, a copy of the death certificate needs to be submitted. If the death is accidental, a copy of the FIR needs to be handed over as well. Your nominee needs to know this practice thoroughly so that the claim can be processed at the earliest.
Discussing the claim process with your nominee is a very important thing to do. You pay the premiums and build up a fund for your dependents just so that their lives are secured in your absence. But if a claim is not made or rejected due to an improper approach, the entire purpose of buying a life insurance will be lost. So make sure you discuss and explain the claim process with your kin in a very methodical and practical manner.
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal.