An excellent news for life insurance policy holders. No insurance company can deny your claim three years after issuance of life insurance policy. It does not matter if you hid any material information or committed fraud. The insurance company must pay. They have no recourse. The onus is on the insurance company find out any irregularity in the information shared within the first three years.
The path for this ground breaking move was laid in the amendment to Insurance Act early this year. IRDA recently issued a further clarification in a notice to all the insurance companies. Please note this is applicable for only life insurance policies.
Let’s first look at what the Insurance Act states.
Insurance Amendment Act, 2015
Section 45 of the Insurance Act clearly states:
No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e., from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.
This law is without ambiguity. It does not matter if the insured or his agent suppressed material information or even indulged in fraud. The life insurance company only has three years to find irregularity. If it cannot, there is no recourse available to the insurance company.
The insurance company has three years to find out if the any material information was suppressed or a fraud committed at the time of issuance of policy.
As I understand, this clause is applicable for both existing policies and the policies that have come into force since the passage of this Act.
What if the Insurer calls/withdraws the policy or repudiates a claim within 3 years?
If the insurance company is able to establish fraud within 3 years, then it can cancel/withdraw the policy. Moreover, in such a case, they can deny a death claim and also deny refund of premium.
In case insurance policy is called into question due on ground of misrepresentation or suppression of a material fact (not amounting to fraud) within 3 years, the insurance company shall refund the entire premiums paid till date of withdrawal. In this case too, they can deny/repudiate a death claim.
This is applicable for all types of life insurance plans such as term insurance, traditional plans and unit linked insurance plans.
IRDA, in its latest notification, clarified a few points about unit linked insurance plans (in case the ULIP is called into question after 3 years).
In case of Unit Linked Insurance Plans (ULIPs), the premiums collected under the policy up to the date of repudiation/withdrawal of policy shall be refunded. Please note the amount refunded shall have no relevance to the fund value.
In case you have revived the ULIP and the policy is called into question within three years of revival, the insurance company will pay: Fund Value as on date of policy revival + Entire premium paid for revival and thereafter.
The treatment is same for traditional life insurance plans. In case of revival, the insurer has further 3 years to call the policy in question or repudiate a claim (in cases apart from fraud). In the insurer does so, you will be refunded: Accrued/admissible benefits before revival + Premium paid for policy revival and thereafter
However, you shouldn’t be buying traditional insurance plans in the first place. To find out why, please read this post.
What happens after three years?
The insurance company only had three years to establish fraud or suppression of material information. After three years, they cannot do anything.
They have to honor the death claim. They cannot even withdraw the policy on their own. So, you just have to keep paying the premium.
Looking at the various scenarios, it is extremely important to establish what constitutes a fraud under a life insurance contract.
What is a Fraud?
As per Section 45 of the Insurance Act, fraud means:
the expression “fraud” means any of the following acts committed by the insured or by his agent, with intent to deceive the insurer or to induce the insurer to issue a life insurance policy:—
(a) the suggestion, as a fact of that which is not true and which the insured does not believe to be true;
(b) the active concealment of a fact by the insured having knowledge or belief of the fact;
(c) any other act fitted to deceive; and
(d) any such act or omission as the law specially declares to be fraudulent.
This should not be much of a concern to honest policy holders.
Section 45 provides further protection to the customers by stating that:
No insurer shall repudiate a life insurance policy on the ground of fraud if the insured can prove that the misstatement of or suppression of a material fact was true to the best of his knowledge and belief or that there was no deliberate intention to suppress the fact or that such misstatement of or suppression of a material fact are within the knowledge of the insurer.
So, if you have been honest and provided information to the best of your knowledge, your family should be safe.
Another reason (apart from fraud) for calling the policy in question is suppression of material information. For example, suppose X has cancer (and is aware of it) and manages to get a life policy issued. Even in such case, the insurance company has only three years to find out and cancel the policy. After three years, it must settle the claim, even if X dies of cancer.
What if death happens within 3 years and claim is made after 3 years
I am copying the response from IRDA.
The Insurer has only 3 years window for calling a policy in question on the ground of misrepresentation or suppression of a material fact not amounting to fraud, from the date of issuance of Policy or date of commencement of risk or date of revival of policy or date of rider of the policy, whichever is later. It is regardless of whether claim has arisen or not and when it is intimated. Once this period of 3 years is over, the policy cannot be called in question.
The IRDA response is very objective. Insurers have only three years to call a policy in question. After that, there is no recourse.
Additional point to note is that the insurer has three years from the date of policy issuance, date of policy revival and date of rider, whichever is later. So, in case you skipped premium payments and had to revive the policy, the insurer gets another three years from the date of revival of policy (and not the issuance). Hence, make regular premium payments if you do not want to leave insurance companies with any chance.
What this might lead to?
Let’s first look at the way insurance companies used to work. They will issue the policies based on self declaration. Only a few minor medical tests would be conducted before policy issuance. In fact, for very young people and for low sum assured policies, medical tests would be skipped altogether.
Insurance companies used to dig deeper at the time of claims only (or so I have read) or tried to find faults. The insurers could reject insurance claim (after any number of years) in case of material suppression of information or in case of fraud. Therefore, in the example discussed above of Mr. X, the insurance company would have rejected the claim even if the claim was made after 10 years.
With the amended Act, the above is not possible.
- The insurance companies are likely to conduct much rigorous medical tests before issuing the policy. So, the entire policy purchase process may get a bit longer and tougher. New buyers may have to shell out more money.
- The insurance premium for the new life insurance plans is likely to go up. Even though the probability of policy holder’s demise does not change with this change in Act, insurance companies could have earlier challenged a claim (even after 3 years) on some ground. Now, that option has been taken away. This will also reflect in their underwriting of risk.
- Claims process for the older policies is likely to be faster. Since there are no grounds to challenge a claim after 3 years, you can expect insurance companies to pay up quickly.
What is customer friendly is certainly not insurer friendly. In some cases, you might feel it is unfair to insurance companies like in the case of Mr. X and cancer. Insurance companies are not going to sit quietly. As I have read, they have already sent representation to IRDA.
PersonalFinancePlan Take
This is an extremely customer friendly move from IRDA, the insurance regulator and the Government of India.
Any policyholder will be delighted with this move. However, do not think of it as an opportunity to conceal any information from the insurer at the time of issuance of policy. If you hide material information, the insurance company may offer them the policy at a lower premium. With the new rules in place, at least a few people might be tempted to hide medical information since the insurance company cannot do anything after 3 years. Such behavior is strictly not advisable. Insurance is a contract and you must keep your end of the bargain.
Moreover, the insurance company can always question if the death of policy holder happens within 3 years of purchase of the policy.
Do not suppress any information at the time of purchase of insurance. Make regular premium payments. Do not let the policy lapse. You do not want to give insurance company another chance.
Nobody parts with money easily. And the insurance companies are not different. However, with life insurance, the insured event i.e. death is an objective event. There is not much insurance company can do beyond a point. But yes, you can expect the claims process to be a lot faster.
Do share this information with your friends and family.
Additional Read: You can read IRDA notice to all the insurers on IRDA website. In case, you want to read about changes to Section 45 of the Insurance Act, you can read download the Insurance Amendment Act, 2015 here. The relevant clauses are on Page no. 25. There are certain scenarios that I have not covered in this post. You will do well to read those cases on your own.
Deepesh is a SEBI registered Investment Adviser and Founder, PersonalFinancePlan.in
268 thoughts on “Life Insurance Companies cannot reject insurance claim after 3 years”
Very good move by IRDA. Gone are the days when Insurance companies used to make life difficult for nominees during claim settlement particularly when the sum assured was high. There were cases when the settlement was held back even for honest people on some flimsy grounds. Thank you Deepesh, for highlighting this and making us aware. Now honest people particularly young & healthy can be carefree and can buy insurance without worrying much about settlement.
No one parts with money easily. Insurance companies are no different. However, this decision brings a lot of objectivity to the entire claims process if the policy is atleast three years old. The claims process will be a lot faster for old policies. The family of the deceased will not have to go through too many hassles at a time when they are under so much emotional stress.
Hi just want to whether policies taken before this amendment are also affectedby this change or it is only for latter policies which are taken post amendment.
This is a grey area. Can’t say for sure.
Thanks Deepesh for such valuable information.
Thanks Kalpesh. Am glad you found the post useful.
is it applicable to term insurance also.
yes
Thanks Deepesh, this is some very helpful content!!
Thanks Varun!!! Glad you found the post useful
Hi Deepesh,
Please let me know from where have you arrived at the conclusion that, “As I understand, this clause is applicable for both existing policies and the policies that have come into force since the passage of this Act.”
I have this query since neither the clarification provided by IRDAI nor the Amendment throws any light on this.
Hi Kashish,
You are right. There is some confusion. The amended Act is silent on whether this applies to older policies too. Clarity will emerge either through IRDA notification/ruling or through outcome of a litigation (court judgement). Even insurance companies are confused about this aspect. I am not very sure myself. That’s why I put it as “As I understand”.
I based my understanding on the following points. If you look at older insurance contracts, the reference is made to Section 45 of the Act which stands amended. Hence, new clauses shall apply. The amendment talks about life insurance policies in general. The clauses have no relation to date of policy issuance (in relation to passage of the Act/ordinance). I take it as blanket reference to all policies.
Moreover, I feel the argument that the amendment shall not apply retrospectively is weak in this case. The event under discussion (demise of policy holder) has not happened. Insurance companies still have time to detect fraud or material suppression in the coming years (even for the policies issued before passage of the Act). If they want, they can still unearth the fraud or wrongdoing. They cannot wait till the policyholder dies after 10 years and then unearth a fraud/deliberate material suppression and reject a claim saying that the clause does not apply retrospectively. The argument will be weak according to me.
I am not a lawyer. So, please see my argument in that light.
My hunch is that this will also apply to the existing policies after three years from the date of notification. The previous modification to this section was clearly worded to express this and it also follow from the principles of natural justice. The insurers should get three full years to unearth any wrongdoing in their existing policies.
Quite possible. I agree. That is the best case scenario for insurance companies. Beyond that, they are asking for too much.
Amended section 45 of insurance act 1938 applies to both existing policies as well as to newly contracted policies after coming into effect of this section.
Thanks Mr. Kumar for the input. I am sure many readers will find this insight useful.
Can you please elaborate how you reached this conclusion?
I have discussed this issue with a couple of lawyers. They were not sure and said retrospective applicability can be challenged.
Is it stated clearly that the 3 year window applies even to fraudulent suppression?
Yes, if you compare the Section 45 of the amended Act with the one before amendment, it becomes quite clear.
In the amended Act, Section 45(1) goes as follows:
No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy.
Further it mentions in Section 45(2),
A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud.
If you see these clauses together, it is clear the insurers have only three years to detect a fraud (or fraudulent supression).
Thanks. That is good news. Likewise in health insurance, some unscrupulous insurers connect any preexisting symptom with any illness for which insurance is claimed. Should not the insurer be forced to declare in the policy document which symptom it considers as being related or unrelated to which illness?
Yes, insurance companies can do that with health insurance. However, it becomes very subjective and not everything can be put down on paper. That’s why you have the concept of waiting period. Once the waiting period is over, the insurance companies have to cover everything.
But still some companies reject claims by saying this was pretty existing but not declared . Is there no protection from that.
Insurance companies can’t be trusted beyond a point.
The ordinance was passed in December 2014. Hence, we should see the results only after December 2017.
There is no clarity if the clauses apply to policies issued prior to December 2014.
But irda clarified later that fraudelant claim must bbe rejected which means no claim is guaranteed.suppression of material fact not amounting to fraud -indeed aa protection for insurers.As a whole i think amendment will work for insurers which only a aa a Times Of India analysed.
Can you provide the link to the article/circular where IRDA provided this clarification and the Times of India article?
In my opinion,it is a customer friendly measure.
Applicability of sec 45 of insurance act 1938-under various scenareos the 1st one tells -insurers have 3 years window to call in question any policy on the ground oof missinterpretetion or suppression of material fact not amounting to fraud.does it not mean that fraud can be question any time deven after many years after policy issuence?
Applicability of sec 45 of insurance act 1938-under various scenareos the 1st one tells -insurers have 3 years window to call in question any policy on the ground oof missinterpretetion or suppression of material fact not amounting to fraud.does it not mean that fraud can be question any time deven after many years after policy issuence?
Dear Debnarayan,
In the amended Act, Section 45(1) goes as follows:
No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy.
Further it mentions in Section 45(2),
A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud.
If you see these clauses together, it is clear the insurers have only three years to detect a fraud (or fraudulent suppression).
Think you are referring to IRDA clarification. I understand clarification from IRDA might lead to some confusion. However, they had answered in a different context. Insurance Act supersedes what IRDA says.
One day, these things will be settled in a court of law. However, as I understand, the insurance company has only three years.
In any case, I am not too much concerned about fraud. I don’t expect readers to indulge in anything that can be remotely termed as fraud. Make complete disclosures. The insurance company won’t have much options after three years.
Hi, I have a question. Apart from death, is there any other way, insurance proceeds can be claimed? For instance, if a person is missing for a long time, can the beneficiary claim proceeds?
cheers!!
Perhaps a lawyer will answer this better. Life insurance pays only on death of the policy holder. I think if the person is missing and is untraceable for 7 years, the court can declare the person dead.
sir i have a question .not disclosing existing policies correctly is a fraudulent act or suppression of material fact? As i mistakenly commited this error .
Dear Sudeshna,
In my opinion, this is not fraud. The information does not affect your life expectancy in any way.
Disclose the information to the insurance company now.
You can drop an e-mail to keep a record.
And yes, keep your nominee in the loop during this communication with the insurance company.
Sir there is a six months difference in the DOB which is in my lic policy and that on my pan card. I have completed my ppt. My policy matures another 8 years. Can the insurance company deny the maturity benefit or death claim.
Prasanth Sarma
Prasanth,
How did this happen?
Such mistakes can be extremely problematic, especially if the age in the policy is less.
I believe insurance company can reject death claim. The only good part is that the insurer is LIC.
Deepesh Ji is declaration by elders or self declaration can be used for DOB endorsement. Can they still deny maturity benefit citing six months difference in DOB.
Can’t comment.
Dear Sir..
I need one advise from you sir. If A person taken policy and its commencement date is for ex: 22.02.2014, and he is diagnosed with Cancer-Lung on 18.02.2014 and started treatment on 20.02.2014. Is this case is fit for repudiation or it is exceptionable from Repudiation. Please provide your valuable information..
Dear Chandra Sekhar,
I assume you are talking about a health insurance or a critical illness plan.
If you were diagnosed before commencement date, then insurance company is unlikely to honor the claim.
Dear Sir,
i need one advice from you, if a person taking treatment for cancer and do not disclose his illness at the time of execution of policy(life insurance policy) and the person dies after 2years 8 months and the claim has been repudiated by the insurance company stating suppression of material facts.
the claim has been repudiated 3 years after the execution of the policy, whether the claim can be settled before ombudsman, on the grounds that The insurance company only had three years to establish fraud or suppression of material information. After three years, they cannot do anything.
They have to honor the death claim.
I don’t know. My post will suggest that insurance company will have to pay up.
However, no matter what IRDA (or the insurance Act) says, if the policy holder indulges in material suppression of an illness such as cancer, the insurance company will not stop at Ombudsman or the regulator. It will go to court. Most likely, it will end up winning too. Such cases can be taken to courts. And court can take an independent opinion.
The rules have been drafted so that the customers are not short changed. Customers need to keep their end of the bargain.
Either party can go to court. Mere alleging/suspecting the suppression of facts is not enough.The insurance company must prove it beyond reasonable doubt in the court.
Hi,If a person takes a life insurance policy and after 2 yrs develop cancer, does he/ she need to inform the life insurance company about the disease…or he / she continues paying premium and do not need to inform of illness
Absolutely no need to inform. The policy holder got diagnosed with cancer after purchase of the plan.
Duty of Disclosure of material facts is applicable at the time of proposal stage i.e. till the insurance company takes the risk. Thereafter you need not disclose or inform the insurer anything
Thanks for your input Mr. Ahmed.
Hello Mr Deepesh..
I wish to take your advice..on a LIC pension policy issued 1994 & 20yrs..Pension started 2014.around.Policy says payment of Rs X0000 monthly( Annuity) but while asking option they divided RsX000 by 12 & started option for Qtly or Hly payment of the said .While giving option it was pointed out to that it can’t be divided by 12 as amount Rs X000 was payable monthly as per policy & not yly. But they are paying as per their likes & not responding in spite of repeated representations ..Pl advise what I should do to get the Monthly pension right Amount..
PARMINDER
Dear Sir,
I didn’t get your question completely.
About the frequency of payments, changing the mode may not exactly result in division or multiplication.
So, if you were to get X annually, if you change the mode to monthly payments, the money that you get may be a bit less than X/12.
Sir a policy start from 18 Dec 2012 and risk start from 15th mar 2013, death occurred on 26 Jan 16, is the case policy completes 3 years short by 1+ month??? Please clarify….
Sorry for your loss.
You make a claim. It is not that the insurance company will not honor your claim if your policy is less than 3 years old.
Sir what I am asking that the case falls in early claim or non early claim?????
It should be from commencement of risk. So, early claim.
Mr. Raghaw you have excellent knowledge on insurance.
Thanks for the compliment!!!
I am not an expert on insurance matters. Have done some research and have some experience interacting with clients.
Mr. Raghaw, few days back one of my neighbors told me that the death claim of her deceased husband has been repudiated by the insurer on the ground that the Medical Certificate (cause of death) is a fabricated one.
The true fact is that their family doctor is a govt.medical officer who examined the deceased patient at his private chamber and issued the death certificate in Form No. 4A (non institutional death) signed but sealed the certificate in his official capacity ( at the time of issuing the same he was in the Casualty duty).
The company verified the certificate and found no record in the hospital and suspected its fabrication.
The doctor is very sorry for his mistake and has reissued a fresh death certificate.
Give me advivce to advise my neighbor.
Dear Firoz,
Please understand I am not an expert on insurance claims settlement. I will try to answer the question to the best of my knowledge.
Am quite surprised. The reason is quite flimsy. Technically, this shouldn’t be problem.
Cause of death is immaterial (unless it is suicide).
It is not as if the family is faking death.
Talk to the insurance company again. They can write to their grievance redressal cell of the insurance company.
Go to them with the proper certificate. The insurance company is on weak ground. They might create hassles but they will have to honor the claim in the end.
Let’s see what their response is.
If dissatisfied, you can escalate to IRDA.
Can you share the name of the insurance company too?
The policy age was more than one year and SA nearly ten lacs.
My mother had three Lic policy .One was five yrs.one was 14th month & last one was 1 month when my mother was expired due to cardio respiratory failure.Would I get the claim.
Kindly advised.
Dear Bikash,
The insurance companies cannot question the policy which is five years old save it was not lapsed and revived within 3 yrs preceding the date of your mothers demise.The 2nd and 3rd policies can be questioned only on the ground of suppression of material facts at the time of proposal or revival if lapsed. Here the onus goes to the company declining the claim to prove the suppression of material facts beyond reasonable doubt. If it cannot prove it must honour the claim.
Deepesh can better suggest you. So wait for his reply.
Firoz has covered almost every aspect. Very little to add on my part.
Just to add, in this post, I have merely highlighted that insurance companies cannot reject policies if the policies are more than 3 years old.
It does not mean that the claim will be rejected if demise happens within 3 years.
As Firoz pointed out, unless there is material suppression of information at the time of purchase of policy, the insurance company will honor the claim.
Respected sir,
This is brings to your kind notice that regarding accident death claim policies are geniue death claim there is no question arises for fraud concealment.As per session 45 rule ,customer protection act is not applicable in front of accident death..
So request you can we add the accident death rule in session 45 rule.
Hi Ajay,
The rule is only for life insurance policies.
Accidental insurance policies are not covered.
Dear Deepesh,
Today I met a friend who is junior to me and stayed with me at the same college hostel 10 years back. He narrated that his mother died last year after a few months ailment.She had an insurance policy with IndiaFirst who repudiated the death claim on the ground that she had been suffering from cancer prior to taking the policy on her life. The company stated that her mother was admitted in the XYZ Cancer hospital on 00/00/00 where she was diagnosed of cancer and they can prove it if required as they got the discharge summary.
Its true that she was suffering from some disease long after the policy was issued but not cancer. My friend is telling that his mother was never admitted to the said hospital and the discharge summary must be a fake certificate submitted by their appointed investigating agency or the name may be same but the two persons are different.
What should i advise him?
I am not an expert on claims settlement. I will try to answer to the best of my knowledge.
Write to the Grievance Redressal cell of the insurance company. You can also raise request through IGMS. https://igms.irda.gov.in/
If the matter is not resolved to your satisfaction, you can escalate to IRDA. Contact insurnace ombudsman. http://www.policyholder.gov.in/ombudsman.aspx
Go through this post in Mint for better clarity about the process.
http://www.livemint.com/Money/2vELZxBmDBY3eBlA1dFU3J/Integrated-grievance-management-system-for-insurance-policie.html
If you suspect fraud, you can also file a case against the insurance company. Better contact a lawyer in that case.
If the claimant knows that rejection ground is not true, they can ask for a review from concerned Insurance company Claims review committee stating the fact. It is time bound process, post that claimant can go for Insurance Ombudsman if not satisfied with claim review ,which is again hassle free, no cost & time bound process to get the claim.
If what is stated is true, claim has to be processed
Thanks Anil for your inputs!!!
my old policy ulip plan 8 yrs back i paid only for 3 yrs current lapse policy after fews days dealth claim sum assured or FV
Depends on your policy. Depending upon type of ULIP, youe nominee may get (Sum Assured + Fund value) or higher of (fund value, Sum Assured)
Dear sir, pls help me regarding the term plan problem occured with me , my father was done a term plan with a private insurer on 2010 with all medical checkup but now after six years due to Chronic liver disease my fater was passed away , pls tell me the main problems of the term plan , they want the death summery and admit report but no one ask that (lic) info.
Pls help me in this regard
Dear Jitender,
Has your claim been rejected?
Still not, i was intimate them about the event but now i will appling for the claim in two days
Sure. Let me know how it goes.
Thanks sir , i will inform u about it.
This is a great piece of information. Thanks for mentioning these details specifically as in general, these information remains unknown to a general person.
Thanks VittalKumar!!!
Please do share the post with friends and family.
Dear sir my father purchased a policy 16 months ago when he purchased it he was on medical leave for viral . He died recently from cancer . Can insurance company deny claim on ground of that.
Dear Vikas,
I am sorry for your loss.
If the adequate disclosures were made at the time of purchase of policy, insurance company will still have to honor the claim.
I assume he was diagnosed with cancer after the purchase of policy.
Yes sir he was diagnosed with cancer after a month and insurance company didn’t ask any information regarding medical leave in proposal form and leave taken for simple viral .I just wanted to know that if there’s no serious illness in the past still insurance company can deny the claim or not . Thanks for your precious time .
Dear Vikas,
The insurance company should settle the claim. Your father did not hide any information. He was himself not aware.
You will have medical records to demonstrate that.
Insurance companies can deny the life insurance claim only on the grounds that the policyholder did not disclose any material information at the time of purchase. Whether you had past illness or not is immaterial.
Life insurance companies adjust the premium to take of past illnesses.
Once they have issued, they must honor the claim, unless the policyholder hid some info at the time of policy purchase.
Be confident. Make the claim. Stand your ground.
Insurance companies don’t typically settle large claims easily (even for those without any past illnesses).
You must be patient and strong.
Even if the insurance company rejects the claim, you can escalate to insurance ombudsman. So, you have recourse.
Thank you sir for your valuable time and the information ,really appreciate .
Dear Sir,
I have a query regarding disclosing the material facts.I have one friend who went to take loan in bank, loan was given to him but insurance policy was also issued as it was part of conditions of loan. no issues he took the policy also.
he is illiterate and on the good faith he signed the proposal form without filling it as agent said we will fill it.It was noticed that agent filled the material information regarding his previous medical history was wrong. next day he called the bank and said details filled in policy is wrong, the fooled him by saying it is just the formality nothing else etc etc. he assumed it to be true. he was always on time of paying premium. now he has died and when his assigned person raised the claim of insurance it was said that it void because material information disclosed was mis-represented and it amounts to fraud. what is the LAW AGAINST IT ?
Dear Mr Goel,
Sorry to hear about your friend.
This is the problem many people face when they rely on agents to fill in the form.
Insurance company seems to have a valid case in this matter.
Don’t give up so easily.
Can you point out the bank and the insurance company?
Can you tell more about the cause of death and how it is related to non-disclosure of material information?
Please go through the following post.
http://www.personalfinanceplan.in/insurance/what-to-do-if-insurance-claim-is-rejected/
Sir my frnd committed a sucide . Its been 3 yrs 1 mnth for policy can he get a claim ?
Dear Hitesh,
Sorry to hear about your friend.
Suicide is not covered in the first year. After that, suicide is covered.
Thank u sir
Hi Deepesh,
Does pre-existing dieases such as Diabetes/Hypertension increase the life insurance (term plan) premium?
Thanks & Regards in advance.
Hi Babu,
Any pre-existing illness can increase premium.
Diabetes and hypertension will most certainly increase the premium amount.
Thanks Deepesh. So is there any predefined formula on how the premium is calculated for pre-existing illnesses (e.g. apply x% load for diabetes, etc) or is varies case-to-case?
There is no fixed formula. Every insurance company has own underwriting policy. Not disclosed to customers.
As I understand, sugar level and BP levels will also affect i.e. level of illness also affects the premium.
Thank you Deepesh. Much appreciate your efforts in helping people understand these basic things!!
You are welcome!!!
Please do share the post with friends and family.
Hi Deepesh,
You have explained the clauses very well. Appreciate your efforts!! I have one query I hope you can answer the same.
I am 32 years old now and have taken Birla Sun Life term insurance plan of 50 lakhs 4 years back (June 2012), undergone medical test since medical reports are clear I was issued the policy. Since Jan 2013 I started smoking and still a smoker now I have worry since I am planning to increase my life cover to 1 crore so please guide what are the options for me :
1) Continue this policy s completed since already 4 year and take addition cover of 50 lakhs from some other provider and inform the new company about my previous term plan cover. I am thinking that it will be contradict since for one policy I am non smoker and for another I am a smoker.
2) Close the old policy and take a new policy of 1 crore by declaring myself as a smoker , in this scenario premium paid by me will be 4 to 5 thousand more.
Please advice on these options.
Hi Manish,
You are welcome. This can get tricky.
Technically, the policy was based on your erstwhile medical condition and smoking status. The life insurance contract did not in any way put any restriction that you cannot smoke in the future. Unless the fine print of your plan puts any restrictions (exclusions), it should be ok. So, go through the insurance contract to find out.
So long as you do not let the policy lapse, you should be ok.
However, you must remember insurance companies are not the most ethical entities in the world. I don’t trust them beyond a point. Wouldn’t want to give them this opportunity.
For instance, if the demise can be linked to smoking habit, they can always say that the status was hidden at the time of purchase.
Even though life insurers cannot reject claim after 3 years, your policy was issued before the amendment. Not sure if the amendment applies to older policies too. Such things can always be contested in court of law.
1. For the additional cover, you have to disclose to the insurance company about smoking status. Even if you don’t, they will find out in a medical test. You can purchase additional cover as a smoker.
2. If you can afford, go for this option. This will remove a lot of ambiguity. And will also let you sleep peacefully.
Suggest you go through the following post too.
http://www.personalfinanceplan.in/insurance/which-is-the-best-term-insurance-plan-for-you/
Though it is none of my business, I would still say this. Why don’t you just quit smoking?
Thanks for your quick reply.
As per your suggestion and my affordability I am opting for option 2, since I also felt option 1 is risky and can create issue for my family in future.
Yes I am planning to quit smoking 🙂 in near future. Thanks for advising as a friend.
One small question, I am currently 32 years old and planning to take term plan of 1 crore as a smoker for 28 years period, just to take second opinion I have shortlisted
1) HDFC click to protect: Premium Rs.17457
2)Birla Sun life Protect@ease : Premium Rs.15275
3)Max life Online term plan: Premium Rs.12650
I have shortlisted Birla and Max Life because of their low premium and high claim settlement ratio and HRFC click to protect since I can buy accidental death/disability rider by paying extra premium but then it is going out of my budget.
So which one you prefer with reason, I know you are not endorsing any brand but your opinion can help me in taking this decision.
Also do you prefer buying riders with term insurance or buy them separately, I don’t have much idea on that.
Have a Great Day 🙂
As far as riders as concerned, I find only permanent disability rider appealing. Others, you can give a pass.
Both HDFC Click 2 Protect and Max Life Online Term plan offer disability rider.
Go with the company you are comfortable with.
A few of my clients have had better purchase experience with Max Life than HDFC Life. Do note I am not saying Max Life is better than HDFC Life.
An insurance company shows its true colors only at the time of claim. And you will never find out how good the insurance company was. Only your nominee will.
Btw, HDFC acquired Max Life recently.
Thanks for your advice Manish. I must say you have good grip in this area and sharing this knowledge to help others is a nice initiative.
Your valuable advice will really help me in deciding the right option for my Term Plan.
**For other readers shortlisted Max Life (Priority 1) and HDFC Protect(Priority 2) for purchasing life cover of 1 crore.
You are welcome!!!
Please share this post with friends and family.
Suggest you go through the following two posts. You might find the answer yourself.
http://www.personalfinanceplan.in/insurance/all-you-need-to-know-about-life-insurance-riders/
http://www.personalfinanceplan.in/insurance/which-is-the-best-term-insurance-plan-for-you/
Just Read your last line “Btw, HDFC acquired Max Life recently” and related article on internet.
I am planning to buy Max life term plan now so will this merger impact the Max life new customers in future.??
Don’t worry much. Customers won’t be affected.
Hi Deepesh,
Continuing the same discussion topic, I took HDFC Life Click to protect in Sept 2013. And recently Sept 2016 while making the premium payment, I made disclosure to the insurer that I have been irregularly smoking since 1.5/2 years with interval of 2-3 months of smoking followed by 1-2 months of non-smoking. I have visited the branch and have made the written disclosure.
Having said that the case falls under the category of 3 years (though I have never missed my premium deadline) and the development of the habits after taking the policy, are there any suitable ground in which my policy can be negated. Also on what parameters I can held the insurers not to cancel my policy.
Thanks !
Also I have disclosed regarding my occasional alcohol consumption (30/60 ml). So kindly take that too into account.
Hi Akhil,
In my opinion, that you start smoking or drinking after purchase of policy should not be a ground for revocation of life cover or rejection of claim. The policy was underwritten based on your health condition and disclosures at the time of policy purchase.
There is no restriction that you cannot smoke or drink in the future.
But these things can always get tricky. Insurance company can claim that you hid these habits at the time of policy purchase to avoid paying a higher premium. And that’s where these things start getting tricky.
The deadline of 3 years is useful for but you never know what gets challenged in a court of law.
There is still some subjectivity about whether the 3-year rule also applies to policies issued before Insurance Ordinance was passed (December 2014).
I hope you went through the medical test.
If you have disclosed this to the insurance company, do you have a proof of such disclosure? Do you have any acknowledgement of the letter?
I doubt insurer will cancel the policy. The maximum they can do is to reassess the premium. Even that seems quite unlikely.
I have a doubt. I underwent an angioplasty in 2011. I took an online term insurance policy on 16/12/2014. But I had not mentioned about the angioplasty. Recently I found the mistake and contacted an agent of the same company on how to proceed. He told me that since three years completion of my policy is due, I need not bother
Pl advice
I don’t know. It is difficult to forget about angioplasty while filling up life insurance form.
Though the insurance act mentions that the insurance company cannot do anything after 3 years, the insurance company can always go to court to seek relief and the court may rule in their favour.
Your policy may also have been issued before the Ordinance or the Act was passed. How the Act applies to the policies issued before the Act was passed is also a bit subjective.
sir. I have taken the online term plan in this month..but I forgot to dislouse familly history in proposal form..i.e my father dies due to heart disese but letter I mention it at the time of medical test…thus it is problamatick
plz reply
Bhushan,
I am not sure if your father’s health condition would have affected your premium.
To be honest, I do not know if it is problematic or not.
Give this in writing to the insurance company. Take acknowledgemet.
Also drop an e-mail to the insurance company stating this. E-mail is important.
Check with them if they need to revisit the premium amount.
thanks sir…sir plz tell me it
is consider as a fraud or miss representation
thanks sir…
plz tell me that it is consider as fraud or miss representation
It is certainly not fraud.
About misrepresentation, there is a fine line.
Don’t worry about it. Inform the insurance company and take acknowledgement.
thanks sir…for your voluable reply
DEAR SIR,
KINDLY LET ME CLEAR A DOUBT.
THIS DOUBT IS IN THE CONTEXT OF Section 45 OF NEW AMENDMENT ACT ,2015. MY SISTER HAVE TAKEN A TERM PLAN FROM ICICI HAVING 50 LAKH OF SUM INSUARNCE IN JULY THROUGH ONLINE .AFTER PAYING THE PREMIUM, SHE HAD TO UNDERGO A MEDICAL TEST IN WHICH HER REPORT WAS FINE AND POLICY WAS ISSUED IN HER NAME. SHE HAS DIABETES SINCE 1 YEARS BUT SHE DID NOT DECLARE IT AT THE TIME OF FILLING PROPOSAL FORM. MY QUESTION IS SUPPOSE SHE IS ABLE TO SURVIVE FOR MORE THAN 3 YEARS AND AFTER 3 YEARS IF POLICY LIFE SHE DIES. CAN NOMINEE WILL GET CLAIM AMOUNT? AND WHAT IS RULE APPLICABLE IN THE CONTEXT OF NEW AMENDMENT ACT ( SECTION 45 OF AMENDMENT ACT ,1938.)
Even though the Insurance Act provides protection in such cases, please understand the insurance company can always go to court in such cases.
And the court can decide either way.
Dear Deepesh,
My friend applied for a life term insurance 6 months ago (Aug2018) and got the policy from the insurer after doing all required medical checks by the insurer. Though he is a healthy person he is a diabetic (early stage) but having his sugar levels under complete control. He hasn’t disclosed this while applying the insurance, however he has disclosed his family history of Diabetes while applying the insurance. His medical condition was not detected by the insurer during his medical check and he got insured now. Does he need to declare his present condition as diabetic to the insurer? Will his claim get rejected within the 3 years in case of his demise? If not found by the insurer after 3 years, will his family get his sum assured after his demise? Please clarify his doubt.
If a person died after 6 months of buying the term insurance policy,but claim it after completing of 3 yrs of policy starting date, and had paid all the premiums on time for three years.but he has not informed about the death of person insured to the company during the three year period.it is possible to get claim settled??
Dear Mohit,
How does one pay premium for second and third year after he/she has passed away?
Auto-debit?
If there is auto debit facility..then after 3 years of policy life ,,can nominee claim for payment , while proposer dies after 6 or 1 years of policy commencement.
In my opinion, yes.
Sir,
If a person dies after 4 month from the date of term policy taken . Will he get the claim
Yes, the nominee will get the claim.
Typically, suicide is not covered for 1 year.
Sir,
If a person dies after 4 month of getting term plan .will his nominee will get the claim.
dear Mr. Dubey .
no one company can deny your claim if your proposer have disclosed all material fact at the time of filling proposal form.since this is early death claim , it may take a little more time due to rigorous inspection by insurer. but if your insured person not hid any thing.. in such case nominee is quitely entitled to get claim amonut..
Dear sir,
suppose mr x has two term insurance from 2 different company and they have not intimated about this information to both the companies.. he has not disclosed this at the time of proposal form.
after expiry of 3 years policyholder dies.how will it be claimed because there is two term insuarnce?
and will insurance companies honour the claim or not?
Rajkumar,
In my opinion, shouldn’t be a problem. You can communicate this to the life insurance companies.
Sir,
I am currently in a tough situation and would really like your advice.
If an early death claim of life insurance has been repudiated, does it mean that the refund of the premium will also be repudiated? If no, how much percentage of the premium will be refunded? If yes, is there anything I can do so that I get back at least some of the premium payed?
If they deny refund completely, is there a way I can at least transfer the amount to another policy?
Insurance companies are not required to refund premium in case claim is rejected.
Whether section 45,protection of honouring the claim after 3 years is available to stand alone critical illness policy issued by life insurance company like 35 critical illness policy by pnbmetlife .
Critical illness plan is not a life insurance plan. Hence, not applicable.
Sir what about a term policy ? Is it governed by the same rules ? My brother had purchased a term policy on August 2015. He had undergone all medical tests and was healthy. Recently he has been diagnosed with high blood pressure. He is uncertain whether he will be paid in the case of untimely death the chance of which is highly rare. Please note he has already paid 2 premiums and the policy is in 2nd year. Kindly clarify.
Thanks.
Term policy is a variant of life insurance plan. Hence, this rule will apply to term insurance plans too.
Sir, I am planning to purchase term insurance. Can I disclose below points –
1. In the year 2010 I was hospitalized for @5 days for low hemoglobin (cause was piles bleeding) & taken treatment to recover.
2. Further avoid above problem I have piles surgery in 2015/16.
Dear Nilesh,
Disclose these aspects while filing up application form.
Dear Deepeshji,
Can we disclose undisclosed information after issuance of policy ? Is their any amendment clause/process available with insurance companies ?
Dear Deepak,
As I understand, there is no amendment clause available.
If the event/illness happened after purchase of policy, then there is no need to disclose.
If you failed to disclose information at the time of purchase of policy, it gets tricky. It was unfair to the insurance company for you to not disclose such information.
You can disclose the information. Difficult to say how insurance company will react. They are well within their rights to terminate the plan.
Well, you can always purchase a new plan.
If we did not disclose our existing policies and the time span of 3 years(as per amendment) have passed. Will our claims be accepted??????
The ordinance was passed only in December 2014. I am not sure if the provisions apply retrospectively.
But the policy is taken in 2016
Then, you should be safe. Do note insurance companies can still take you to court (or rather you will take them to court when they decline to honor the claim). And court can rule anything.
In my opinion, unless the coverage under the existing policies was substantial, you should be ok.
Sir but the policy I am taking about is moneyback policy not a term plan so I want to know whether details should be submitted and if not submitted what would be the consequences
Money back plans are also life insurance plans.
IF OUR POLICY IS COVERED UNDER THIS CLAUSE I.E. PROTECTION AFTER 3 YEARS AND SOME YEARS LATER THIS CLAUSE IS REMOVED
WOULD OUR CLAIMS BE SETTLED ON THE GROUND OF SEC 45 OR THIS CLAUSE WOULD BE REMOVED FROM OUR POLICY…..?????
Please contact a lawyer.
Sir would such a clause be removed once added in the insurance act
Hi sir I have purchased one term plan of ICICI pru iprotect smart for my self and for by elder brother in 5 May 2016 through online portal. on the proposal form in Health colum (1)cancer, tumer,Growth or cyst of any kind.. I remark YES (2.)Have u undergone or been advised to to undergo any test /investigation or any surgery or hospitalized for observation or treatment in the past. I remark NO. Now as my elder brother died in November 28 2016 ..I submitted my Elder brother Death claim and they rejected on this ground that we have not disclose the fact that he went for test and he was the cancer patient .and they ask for with the death claim when was the cancer was deduct in which year and month .we got his bioscopy report on 5th December 2015.My question is arise when the company was new about the cancer in the proposal form we remark Yes.they issued the Term plan after knowing now the issue arise from the company with the rejection letter they have send the proposal form copy which is showing YES on cancer on health colum the company remark as No.and the company put statement had the correct medical history been disclosed in the proposal for insurance, the company would have declined the proposal upfront and the policy would not have been issued. Now coming to the point company is in fault to issued the policy for cancer patients and secondly for changing the language of proposal form remark. Now I have send them email they are taking expert advice. Can u please let me know how should we go with claim situation and remedy.and what is your observation and your opinion and what is the insurance act says about the case about by brother Death claim. Waiting for your suggestion. Thanking you Ricky deol
Dear Ricky,
I am sorry for your loss.
You should pursue the case. For you, major issue is about non-disclosure of diagnostic tests. The company should have sought more information about it when you had checked the relevant section.
As I see you did disclose that your brother had cancer/tumor/cyst. ICICI’s underwriting team missed out and didn’t notice. The company’s counter could be that not every cyst is cancerous.
Don’t let ICICI Prudential off the hook so easily.
If I were you, I wouldn’t trust them at all. They will just buy time and do nothing.
All their energy will be spent on figuring out a way to reject the claim (and not to look at your case objectively and grant your relief).
Drop them e-mail every second day and seek response.
Suggest you go through the following post too.
http://www.personalfinanceplan.in/insurance/what-to-do-if-insurance-claim-is-rejected/
Thanku so much for your response sir .I have one more question from u sir on pree mature death is company clear the claim. And in my brother case what benefits I can get as a nominee .because I finding it very tricky from the company expect. And how much time do I have to ree address the issue after receiving the letter on 11th Jan 2017 ? Waiting for the reply Thanking you Ricky deol
As a nominee, you get the Sum Assured,
The sooner you approach after rejection of claim, the better.
You can approach consumer court or civil court right away.
If the sum assured was less than Rs 20 lacs, you can go to Insurance ombudsman too.
Non disclosure and fraud terms and conditions will be as per section 45 of insurance act 1938 as amended from time to time. The policy is subject to terms and conditions as mention in policy document and is governed by law of India
SO will my policy be as per amendment or as per terms and Condition in policy document
Please help me out here…..
As I understand, retrospective applicability of amendments can be questioned in courts of law.
I am not the right person to answer this question. Please contact a lawyer.
Sir,can you please elaborate meaning of retrospective??????
Hi sir the cover amount was 35lakh and for hospital Medical benefits was covered with 3lakh 50 Thousand .Now hume Address for my brother claim for more then 20lakh.
Hello Deepak,
I read most of this discussion and its very informative but I want to buy a ****TERM Insurance *** I will declare everything but ****SMOKING**** part is disturbing and costly too for those who left smoking long back.
>>My age – 37
>>Living in Delhi
>>Private IT Job
>>Looking for sum-assured – 1 Crore
>>Annual Income – 7.5 lacs/ annum
>>Dependent member – my wife (No child)
>>Liabilities- I m on rent, looking to buy a flat in delhi for living and investment in flat balance to pay of 20 Lacs over 5 year+ Total LIC premium Rs. 75000 (next 5 years) + Total LIC premium RS. 156000
>>Local Road travelling to Office
>>>>Sum assured amount – Should I take 1 crore / 80 lakhs cover. m confused. Please suggest
>>>>I had left regular smoking years back but now just I smoked few cigarette recently 01 cigarette / 15 days in last 4 months that is very occasional. Last I smoked was 15 Jan 2017. I would not smoke in my life ever because I have to take TERM Plan for my family. I should be considered as NON-SMOKER.
Have some questions to clarify –
>>>First scenrio -If I DECLARE as NON-SMOKER and pass the nicotine medical test and continue my policy for many more years, My death does not happen due to smoking (because I have determined to leave smoking forever). In this is there any possibility that insurance company can come to know the insured’s non-disclosed smoking history although smoking is not my reason of death.
>>>>How can they reject the claim by nominee in this case?
>> Second scenario – If I declare as SMOKER, my abual premium will shoot up and in the medical test result the nicotine level comes ver low. Will Insurance company lower the premium amount if nicotine level comes very low?
>>>>>Policy TENURE – Why you stressed to take term period only till 60 years (retirement) age but not to take extended term period till 70 years age . What if soemone lives till 65 or so. he would not get benefit of the TERM Insurance. Average life period in india is now 70 years or more. Is it not better for Normal salaries person in india from middle class to bear extended cover till 70 years age and pay extra premium to secure family?
>>>>>RIDER -What riders a person Aegon has Terminall illness covered in the basic death sumassured. what do you advice on Premium waiver rider?
>>>>>>What will be the depreciated value of 01 lakh rupee after 30 years from now. What is the claculation behind that??
Sumit,
Suggest you try out a good life insurance calculator to figure out the right amount for you. In my opinion, you should be considered a smoker. You smoked a couple of weeks back. Every insurance company has its own guidelines.
Scenario 1: Would you want to leave that to chance? What if insurance company figures out? Perhaps through a Facebook photograph or some other way. Insurers are not to be trusted. You don’t want to give them a way out. The reason may be unrelated to smoking. However, if they find out that you were a smoker at the time of policy purchase, they can reject the claim. After all, because of your non-disclosure, they did not price the policy well.
Scenario 2: By the time you retire, you should have amassed enough wealth that life insurance is not needed. Your existing wealth is enough for everything.
Suggest you go through the following post.
http://www.personalfinanceplan.in/insurance/all-you-need-to-know-about-life-insurance-riders/
You adjust the amount with inflation. The formula is X/(1+inflation rate)^number of years.
incontinuation to my above post
++++Adding tenure for above mentioned Total LIC premium RS. 156000 is to be paid over 13 Years
dear sir.
its quite informative the article you provide. i want to share a interesting information regarding my term plan taken on 10/12/2016. i took it from policy bazaar a renowned comparing site for insuarnc. both policy bazaar and AEGON Life wanted to mislead me.
i had revelled all the material facts and my family history detail . i had revealled that my mother is suffering from cancer and father passed away in 2014 due to heart attack, i also told at the time of my medical test about my mother and father.
every thing was ok, but when they issued me policy bond i saw that my proposal form was attached with policy bond in which my family health history was missing and they have ticked it no. i immediately contacted and dropped a mail to rectify it, they told me that you have not disclosed , i dropped a harsh mail , within 24 hours they admitted their mistake and send me mail and also a letter of acknoledgement for their mistake. i had not proper knowlwdge but afetr reading above article i gained these experinace. all credit for it goes to deepesh sir..i really appreciate his effort in this regard.
thanks.
Dear Mr. Thakur,
That is very kind of you.
Your experience is not very uncommon. These incidents of non-disclosure of material info by agents or third parties are not uncommon.
And there is a lesson to be learnt.Fill all the forms yourself and check when you get the documents from the insurance company.
I compliment you for your fight against the insurance company.
Just one thing..you got confirmation from the insurance company, right?
YES SIR I GOT A LETTER FROM INSURANCE COMPANY THAT THEY HAVE ACKNOLEDGED THIS MISTAKE AND THEY HAVE UPDATED THIS DETAIL.
IT WAS QUITE SATISFACTORY.
I suggest you scan the letter and send to the customer care seeking confirmation that the letter was issued by them.
Seek an e-mail confirmation too.
This may reek of paranoia but I just don’t trust insurance companies.
Hello G K THAKUR,
I am also planning to take TERM insurance and looking at AEGON’s Iterm online policy…..
You mean they had altered the proposal form you had filled originally?
Did you fill the details on your own on the online policy form?
Did you receive a copy/ proof of filled proposal form after making the payment online to compare in later time?
Did you buy it via Policy bazaar portal/ Directly from Aegon’s website?
In how many days this issue was solved?
I suggest you escalate it to IRDA grievance cell and call them too.
Do you suggest anyone to buy AEGON term insurance..?
Hello G K THAKUR,
I am also planning to take TERM insurance and looking at AEGON’s Iterm online policy…..
You mean they had altered the proposal form you had filled originally?
Did you fill the details on your own on the online policy form?
Did you receive a copy/ proof of filled proposal form after making the payment online to compare in later time?
Did you buy it via Policy bazaar portal/ Directly from Aegon’s website?
In how many days this issue was solved?
I suggest you escalate it to IRDA grievance cell and call them too.
Do you suggest anyone to buy AEGON term insurance..?
DEAR SUMIT JI. I HAVE FILLED PROPOSAL FORM MYSELF NOT BY ANY ONE WLSE, BUT IT WAS THROUGH POLICY BAZAAR PORTAL.
I DO KNOW WHAT I HAVE FILLED , THATS WHY I INSISTED ON MY POINT AFTER GETTING MY POLICY BOND, BUT FORTUNATELY THEY ACKNOWLEDGED THE SAME AND UPDATED THEIR DATABASE SENDING A LETTER TO ME.
SINCE AEGON HAS GOOD CLAIM SETTLEMENT RATIO AND HAVING COVERAGE UP TO 80 YEARS OF AGE , THATS WHY I PREFERRED AEGON.
THANKS
G K Thakur,
>>>Did you get a system generated copy of the same proposal form on your given email ID as proof what you had filled while buying it.
>>>>>I am curious to know that why didn’t you buy it directly from the AEGON’s website..
Hi sir I need your financial advice. Please send me the links where to invest with secure investment. Please reply. Thanking you for bosting my confidence in my brother claim. The matter got resolved and I have received the sum insured. Please advise me where to invest in a right way for our betterment.
Hi Ricky,
It is good to hear that you got the insurance claim.
About investment advice, it is difficult to comment.
There are many products available such as fixed deposits, PPF, post office schemes, mutual funds etc.
The choice depends on the your goals (what you are saving for) and the investment horizon (how long you want to invest).
Suggest you contact a financial planner in your city. He/she will guide you better.
Hi Thank u for your informative information.
Sir , I have taken a term policy from icici prudential now and i have one more term policy of lic of 1000000 taken 5 years back . I have not disclosed this information in my icici pru proposal form
Would my claim get rejected due to this reason ??
To be honest, I don’t think it should be problem. But I do not know for sure.
The disclosure of existing life insurance plans is to ensure that you do not get over-insured.
It does not affect underwriting of the insurance company per se.
In my opinion, this shouldn’t be a reason for claim rejection. Again, as mentioned above, I am not sure.
My husband is diabetic person. He is 41,is it possible for him to take lic e term insurance plan
Difficult for me to tell. Please check with LIC.
DEAR SIR,
KINDLY TELL ME THAT WHAT IS THE PROCESS OF GETTING CLAIM IN CASE OF MISSING PERSON..?
You know somebody who is missing?
sir,
I HAVE DOUBTS ABOUT MY TERM INSURANCE WHICH I HAVE MENTIONED ABOVE EARLIER.
ACTUALLY I AM LIVING IN DELHI RIGHT NOW , I AM LIVING ON RENTED HOUSE. I AM FROM BIHAR WHERE THERE IS NO Any BRANCH OF AEGON LIFE INSURANCE EXCEPT PATNA. MY QUESTION IS SUPPOSE I PASS AWAY DUE TO ANY REASON , IN SUCH CONDITION HOW MY NOMINEE WILL CLAIM. BECAUSE MY ALL FAMILY LIVE IN BIHAR WHERE THEY KNOW ONLY LIC , BECOZ OF ITS OMNIPRESENCE..HOWEVER I HAVE TOLD MY NOMINEE ABOUT MY TERM INSURANCE.
BUT WILL THEY FACE ANY PROBLEM , OR CAN AEGON DENY MY CLAIM STATING THAT WE DONT PROVIDE SERVICE IN BIHAR EXCEPT PATNA.MY NATIVE PLACE IS 300 KM AWAY FROM PATNA..HOWEVER I HAVE REVEALED TO AEGON LIFE INSURANCE ABOUT MY NATIVE PLACE.
KINDLY GUIDE ME..
There shouldn’t be any problem. Aegon can’t deny claim on this basis.
A friend of mine lost his father this month only..they have this life insurance policy and they have two premiums till now…. now when they checked the policy they found that d.o.b of his father is not correct in policy as in documents
….also nominee i.e his mother`s name is also not correct spelling mistake i think …..and major problem is that his mothers other documents like adhar card and votr card do not share same info i.e her name and d.o.b are different in those two also …….. also they have mentioned that his father drinks alcohol from last 10 years but now the medical certificate mentions chronic liver disease which they didnt mentioned in policy bcoz his father was well and fine after the treatment and he didnt knew this gonna happen and forgot to mention……he is very tensed sir please help him with some useful info
Dear Anmol,
I am sorry for your friend’s loss.
Seems like proper information was not given to the insurance company at the time of purchasing the policy.
In such cases, insurance companies can reject the claim.
You can contact Money Life Helpline. They may be able to help.
Sir,
By over insured what is your meaning ??
How much insurance can a person take indivisually
Insurance companies may not permit you to buy life cover 15-20 times your annual income.
If i am planning to buy a term policy would their be any problem if i am planning to go for a private company
Because many people have told that lic is the best because it is a public company
Go with the insurance company you are comfortable with.
Sir,
If we did not disclose our existing policies in proposal form what would happen
And
Even if we did not disclose and year of 3 years passed will our claim settle on the ground of sec 45
Dear Raghav,
It is better to disclose. Your disclosure or non-disclosure of earlier plan is unlikely to affect under-writing of the insurance company.
However, the insurers need this information to ensure that you do not get over-insured.
Therefore, I am not too sure if this would affect claims process. However, you must disclose.
comparison between irda clause for claim settlement in case of online policy and offline policy .is there is any difference or both have same condition
Same for both online and offline policies.
Hello Deepesh,
What about the insurance company’s stability…..I mean the SOLVENCY RATIO, if someone buys term insurance from any of the small private insurers which are not very famous and have a small presence unlike like AEGON, Edelweiss Tokio and like that….buyer pays for a long term ****30-35 years******* and if incase he / she expires in the 34th year of the policy tenure…Whats the guarantee that these small private companies will survive and nominee’s family will get the claim sum-assured and family will not be in a lost situation…
******What is the guarantee that these companies will exist for next 30-35 years till my policy tenure ends************..I mean the *****company stability****…how IRDA ensures buyer’s money security and safety, If in case an insurance companies shuts down its operations but buyer family gets his claim money without hassle…
-In nutshell, How should I choose a PRIVATE insurance company based on its stability while buying the term insurance from it.
– How ***IRDA**** ensures, buyer’s money safety… If incase company as fund problem to repay the claims arising in future.
Please provide your expert advice as its the top most important factor to buy TERM insurance
Dear Sumit,
You are right.
If that is a concern, suggest you go ahead with the company you are comfortable with.
IRDA has capital requirements to reduce such chances of such crisis. Insurance companies have to maintain solvency ratio of 1.5.
Insurance companies also down sell to the risk to reinsurance companies.
But yes, what you have pointed out can happen.Insurance companies can go bust.
Suggest you go through following article on Morningstar.
http://www.morningstar.in/posts/27829/why-solvency-ratio-matters-in-insurance-1.aspx
dear sir,
i have severallife insurance policy from several companies.i pay premuium online through internet banking.
i never keep premium payment acknowledge receipt with my policy bond.
what will happen when i will not be here(pass away-let suppose),does it require to keep hard copy of premium payment or only policy bond is sufficient at the time of death claim. kindly clear this doubt plz..
govind kumar
9968538481
Ok thanks Deepesh. Can you tell me what will be the depreciated value of 50 Lacs after 30 Years from today onwards.
I mean how depreciation on rupee calculated…
at 8% inflation, the value will be equivalent of Rs 4.96 lacs today.
One of my relative expired recently. He is having term policy from sep 2014. He has made 3 premium payments annually. The reason behind his death is HIV. Whether nominee can claim death benefit in this case?
Depends. If the HIV was contracted after purchase of plan, the insurance company should honour it.
If HIV was disclosed at the time of policy purchase, insurer should honour claim in that case too.
There will be an issue if your relative had HIV at the time of policy purchase and didn’t disclose it.
We are not aware of his disease till the time he is admitted to hospital. Can we apply for claim from insurance company. Can the insurance company deny stating that he is having the disease prior to the policy. But no such tests are available to find out the tenure of the disease. How to go about in such cases.
Dear Sairam,
Unless the insurance company can prove that the person had HIV before purchase of policy and that such information was hidden from them, it will have to honor the claim.
Apply for the claim and fight it out.
Hello Deepesh,
Thank you for the response. You mean at the rate of 8% inflation, Rs 50 Lakhs Sum assured will be equal to today’s 5 Lakhs. I think, which is very less. So one should by at least 1 crore.
Till what age one should buy the term insurance… ?
Hi Sumit,
That’s not the way you calculate your life cover requirement.
In any case, shouldn’t go beyond retirement. The idea is you should have accumulated wealth for all that you need by the time you retire.
If you haven’t, you will be in serious mess after retirement.
If you think you have accumulated enough for all your goals earlier, you can stop paying premium for life insurance.
I mean to ask I am 37 years so . What should be the maximum tenure I should choose…How to decide…
Sir,
I am having 3 policies 2 with lic for 20 lac each and 1 with icici
I have not disclosed the policy with lic to icici as they would not allow me to buy the policy for 1 crore as we cant buy life cover more than 15-20 times of annual income
So would it affect by claim settlment or only claim amt would be lowered
Hi Brijesh,
It is better to disclose.
I know it is better to disclose but if not disclosed what would bbe the impact
Such rules are put in place to prevent people who plan to end their lives from purchasing excessive life insurance. For the same reason, suicide is not covered in the first year.
In the worst case, the company can reject the claim.
Will these clause also apply to policies taken in 2005
As when i saw the policy document in that sec 45 older version is written
So i want to ask will this new clause apply to that policy or not
I am not sure if this Act applies retrospectively.
A lawyer will be a better person
What happened after threeyears of onlinetermplan i purchase termplan in one company and next i purchase another termplan from other companies but i could not mentioned existing terminsurance if a person die what happened?
It has nothing to do with whether the plan was sold online or offline.
I am not very sure.
This could be an issue, especially in the event of early death (death a few months or years after purchase of policy).
Dear sir,
I have taken a term insurance policy in the year 2011 worth 80lacs. At the time of policy issuance I was a self employed and give the related documents. But after the policy issuance my business get loaded. Since then I m paying regular premium but not having on paper income till 2016. Since Feb 2016 I m having salary income. Healthnwise I m having diagnosed with sugar in last 2 yrs. My question is that if something’s goes wrong with me in that case will b any problems bcoz of this in the claim? If yes please provide solution for the same.
Thanks
Term insurance was issued based on the information shared at the time of purchase.
Subsequent changes in nature of employment, city of residence and income does not affect anything.
Information given at the time of purchase should be correct.
Dear Sir,
what is the impact of early/non early death on insurance claim settlement..
As i have come to know that one who has completed 3 years of policy life ,,,no one insurance company deny death claim even if it is taken on ground of hiding material facts……
kindlyguide me…
Hi Rajkumar,
In case of early death, you can expect insurance companies to be a bit suspicious. Hence, you can expect them to make deeper investigation into the demise.
Yes, that’s my interpretation too. However, insurance is a contract. You must keep your end of the bargain.
Irrespective of what is written in the Insurance Act, Insurance companies can always drag you to court.
And in exceptional cases, courts can decide in favour of the insurance company.
Therefore, you must disclose all information about your health while purchasing the policy.
Thanks Deepesh for sharing this information.
=> I had purchased LIC Term Insurance Plan in Aug, 2013 and I was a NON-smoker at that time.
=> After three years of completion of the policy, I had consumed tobacco (in form of smoking) for a period of 4 months around. Having realized the harmful effect of this, I have already quit Smoking and its been 2 months now.
I have following queries in this regard,
1) The fact that I was a non-smoker at the time of purchasing the Term insurance and had smoked for 4 months around (though I have quit smoking now) is going to have any impact on my existing LIC term insurance plan.
2) Am I supposed to inform to my LIC about the fact that I had smoked for a period of 4 months ?
3) Suppose, If I inform the LIC about this ? what could be a possible impact of that ?
4) Now, I am planning to take another Term Insurance plan. Will I be considered as smoker or non-smoker ?
5) Suppose I purchase the new Term Insurance plan as smoker.
– Then, is my new plan not going to be in contradiction with my existing LIC plan, which I had brought as non-smoker?
– Does, this contradiction in smoking habit in both the plans going to have any kind of impact on any of the policy with respect to its continuation and in claim settlement if a need arises.
Thanking you.
Hi Vinod,
1. Technically, what matters is your smoking status or history at the time of policy purchase.
Does not matter if you start smoking later.
2,3. Therefore, no point informing anything to LIC now.
However, in my opinion, the problem is that if the death happens due to illness caused due to tobacco consumption/smoking, insurance company can always maintain that you hid this information at the time of policy purchase. Insurance companies can stoop to any low to reject a claim.
You can’t do anything about this though.
4. If you are planning to purchase a new plan, inform the company about your smoking history and let them take a call.
5. Technically, no contradiction. You are merely informing your current smoking status at the time of purchase.
Dear Deepesh
Pl advise. A person purchased the life insurance policy of sum assured of Rs.20 lacs in June 2012 and died in Feb 2014 at the age of 48 years. When the claim was filed by the wife the insurance company has repudiated it on the ground that in the proposal form the deceased has said ‘NO’ in the first three columns that enquires about the past or present illnesses like BP, Diabetes, Cancer, kidney etc. The lady has filed a consumer complaint seeking claim of Rs.20 lacs. In reply the insurance company has pleaded the pre-existing illness on the ground that its probe agency has brought on record a prescription of March 2012 from the Hospital whereas the policy was purchased in June 2012. Now, I have a pointed query that when the sum assured was 20 lacs would it not be incumbent upon the insurance company to get the proposer medically examined before selling the policy ? Factually, the copy of proposal form filled in by the deceased insured was never supplied by the insurance company nor the proposal was accepted in writing nor the policy bond was issued/sent to the insured. Can these irregularities render the contract of insurance as Void Ab-initio ? If yes, what would be the consequences ? Your advise may be highly helpful to that lady.
Dear Mr. Dass,
There are two reasons.
1. The cost of complete checkup can be very high. Therefore, companies rely on self-declaration or medical tests limited to health disclosures.
2. Secondly, I believe it gives them a chance to reject claims later.
Insurance companies can stoop very low, can produce fake prescription papers too.
Did the deceased have BP or diabetes at the time of purchase of policy?
Ask them to furnish the proposal form. Believe that is the least consumer forum can do.
Btw, how did the spouse make a claim if she did have the original policy bond?
About terming the contract void ad-initio, please contact a lawyer. I am not the right person.
I had purchased term policy from hdfc life i had mentioned sum assured amount of previously purchased policy, but by mistake i missed to mention perevious policy details like compny name and date of issue.pease suggest should i continue my policy .
Yes, continue.
In my opinion, unless the amount of life cover in the earlier policy was quite large, it shouldn’t be a problem.
When did you purchase the plan?
Hello sir
Term plan history me epilepsy mention nhi kiya tha… 20th April 2017 ko heart failure se death hue… Policy 2013 ki he… 2014me detect hua first time heart problem.
Premium every year pay continue..
My question is kya Mera reject hoga kya… Epilepsy ki vajahse?
e
मैडम,
इस केस में आपको प्रॉब्लम हो सकती है|
Epilepsy अगर आपने नहीं बताई थी, तो insurance company परेशान कर सकती है|
Hello Sir,
I bought term plan on monday. I got call from insurance company for medical history.
I told them every thing correctly as I am not having any health issues.
They asked about piles and harnia. I told them, I dont have any health issues but I want to get myself checked for piles. But till date no health issue is there and no medical checkup was done till date. And this is fact. 🙂
What will happen now ? Will i get policy and will they deny my claim in future( as i mentioned piles thing) if any if any death happened due to diseases other than piles ?
Hi Rahul,
This is the problem everyone faces.
You have to answer in “Yes” or “No” while the correct answer is “I don’t know”.
Piles and hernia have physical manifestations. So, if you are concerned merely about those, think you can relax.
And yes, piles and hernia don’t kill (as far as I know).
No matter how honest you are, insurance companies never try to return the favour.
They will try to reject your claim (especially for term plans). That’s a risk that is always there.
You have done your best to provide full disclosure.
In any case, insurance companies can’t do much after 3 years.
Relax and enjoy your life.
Suggest you go through the following post.
https://www.personalfinanceplan.in/insurance/claim-settlement-data-life-insurance-companies-hides-reveals/
Dear Sir,
what is the importance of early claim and non early claim in context of death claim settlement?
kindly brief me plz…
Hi Rajkumar,
If the death happens within a few months or years after the purchase of policy, the insurers get a bit suspicious.
Therefore, they may investigate more.
Dear sir.. After 3 years of policy life.. Death occurs.. Case is investigated or not… Kindly guide me…
Case is always investigated.
Dear Sir,
I have taken a max life insurance term plan with accidental death & partial disapbility
but in telephonic discussion with their executive,_ i skip to mention about my other policies,
there will be possible to delay / denied claim in future due to non provided information of other insurance policies,
pls. suggest,
Hi Pritesh,
As I understand, the disclosure of life insurance policies is required to carry out financial underwriting for you.
That means insurance company is not comfortable in you having too large a life cover (as compared to annual income).
For this, they need info about your existing life policies too.
I believe this should not be a problem unless your total life cover exceeds 15-20 times your annual income.
Suggest you write to the insurance company about this (your existing policies) over e-mail and seek acknowledgment too.
The maximum they will do is to cancel the cover and forfeit premium (though I feel they won’t do it).
Better the hardship to the family.
Dear sir, I have purchased a term plan from max life in the month of March’17 where I have furnished all my incomes & investment. Everything was good up to the month of oct’17.But suddenly in 31 St October I received a closer of policy letter mantioning that my personal data are incorrect in financial grounds & a cheque of amount that was debited from my. Ac since last 8 months.They have neither discussed with me nor given me any notice. When i put a query regarding this in their office they told me this is the standing information of IRDA that any time a insurance company can cancel a policy with in a period of 4 years with out any notice and frequently following up me to encash the chq. Kindly suggest me what to do next.
Hi Manas,
Can you please elaborate a bit more?
As I understand, you purchased the policy in March 2017. Your policy was cancelled in October 2017 since, as per the insurance company, you did not provide the correct details (perhaps about your income).
Is that correct?
Technically, the insurance company can terminate the policy if incorrect information was furnished to them at the time of purchase.
The question, did you furnish incorrect information?
No , whatever they want from me at that time as per their requirement like Aadhar card, last 2 years computation of income, last 2 years income tax return, photo & investment details till that day.
Then, this looks unfair.
Suggest you go through the escalation procedure on Max Life website.
https://www.maxlifeinsurance.com/customer-service/escalation-matrix.aspx
To begin with, Drop an e-mail to manager.services@maxlifeinsurance.com and care@maxlifeinsurance.com
Explain your case and seek proper (and written) explanation from them.
If you do not get a proper response in a few days, do not shy away from marking e-mail to Max Life CEO.
http://ibai.org/email-id-of-ceos-life-insurance/
If even that does not help, you need to reach out to ombudsman or you can also raise complaint at IGMS.
https://www.personalfinanceplan.in/insurance/what-to-do-if-insurance-claim-is-rejected/
Thanks
Dear sir, pls let me know is there any provision of IRDA , before cancel a policy by the insurance company of a policy holder then the insurance company should give an intimation to the policy holder before how many days.
I don’t think there is such a provision. At least I am not aware.
As I see, in this case, the company is sure of false representation and hence has cancelled the policy.
Suggest you follow up with them and figure out the exact reason. That is your right.
Any action can be taken only subsequently.
Hello Deepesh,
Do you have latest claim settlement ratio report for 2017-18, I need to check it before I take any decision.
And , how can someone know what are the recent changes in the terms and conditions of the Insurance act from buyer point of view.
Hi Sumit,
You can check out the latest data in IRDA annual report.
Since FY2018 is not yet complete, you will have to wait.
Insurance Act is not amended every day. You can download the insurance act from IRDA website.
About the policy, you need to go through policy wordings (terms and conditions) before making the purchase.
Hi Deepesh, I have one query. in one of your replies here you mentioned – “If the sum assured was less than Rs 20 lacs, you can go to Insurance ombudsman too.”. ….. Please recheck and confirm if it is 20 Lakh SA or 20 Lakh Premium Amount.. Because in case of any consumer product the threshold amount is for cost / consideration amount for that product. In case of Insurance product is the premium paid and Sum Assured is mere the benefit or rater a potential / probable benefit which is contingent on happening of an event. Even in consumer courts the threshold amount to decide the jurisdiction (whether District or State or National Forum) is the amount for cost / consideration /Price for the product ….. not the benefit arising from that product.
Please check it out and confirm.
Hi Deepesh, I have one query. in one of your replies here you mentioned – “If the sum assured was less than Rs 20 lacs, you can go to Insurance ombudsman too.”. ….. Please recheck and confirm if it is 20 Lakh SA or 20 Lakh Premium Amount.. Because in case of any consumer product the threshold amount is for cost / consideration /Price amount for that product. In case of Insurance product price /consideration is the premium paid for the policy and whereas Sum Assured is mere the benefit or rater a potential / probable benefit which is contingent on happening of an event. Even in consumer courts the threshold amount to decide the jurisdiction (whether District or State or National Forum) is the amount for cost / consideration /Price for the product ….. not the benefit arising from that product.
Please check it out and confirm.
Hi Manoj,
It is the claim amount under contest.
Hello Deepesh,
I am considering Max online term Insurance also but i have below queries to clarify, I have sent an email to them but didn’t receive any reply. They some terms written in the brochure and not clear at all.
Is my premium going to be constant for the entire term of the policy and remain same as the amount of 1st Annual premium?
> What is the survival/ maximum term of WOP (waiver of Premium) rider when someone opting for “Pay till 60 years”? what is the condition with that
> Are all the riders terminate @60 years of individual age with “pay till 60 years”
> what is the maximum limit of the premium amount waiver under WOP rider?
> Please clarify the meaning of the below point as it says premium discounted @ 6.5%-
Once claim under this rider is accepted and future premium(s) are waived; then in case of termination of base policy due to happening of any insured event or surrender (only if surrender value is available under the base policy), the following benefits are payable:-
All applicable benefits under the base policy
the present value of the future Premium (including rider premium, if any) to be waived, discounted at the rate of 6.5% p.a.
Dismemberment: Is the disability covered due to illness or accident or Injury
While the Base Policy and this Rider is in force, all future premiums payable for the base plan and the attached rider will be waived off, in case policyholder being subject to one (or more) of the following impairments (due to injury or illness) which persists continuously for 180 days and deemed permanent in the opinion of a medical practitioner appointed by the Company:
Total and irrecoverable loss of entire sight in both eyes; or
Amputation or loss of use, of both hands, at or above the wrists; or
Amputation or loss of use, of both feet, at or above the ankles; or
Amputation or loss of use, of one hand at or above the wrist and one foot at or above the ankle
Key Terms Used:
Illness – Illness means a sickness or a disease or a pathological condition, leading to the impairment of normal physiological function, which manifests itself during the Rider Term and requires medical treatment.
Please explain what is covered under illness.
> Is this rider available with all online term plans.
Hi Sumit,
Will try to answer without looking at policy wordings i.e. how these riders are typically structured.
Please go through the policy wordings (and not brochure) to understand the terms and conditions.
Is your premium payment term not same as policy term?
Premium will be constant for the entire term. Riders will terminate as and when policy terminate.
Premiums will be waived if you meet the waiver of premium rider condition. Typically, disability is an eligible condition.
Waived premiums will be discounted at 6.5% p.a. and given to the nominee along with the base benefit under the policy (if the insured event i.e. demise happens).
Hi.Thanks for the valuable information. I already have a ABSL Term Insurance Plan that has been in force for the past 3 years. However owing to the low CSR coupled with the lackadaisical customer/agent service I was contemplating switching over to ICICI/HDFC for their high CSR. Much to my dismay, a LIC agent informed me that they are all sailing in the same boat and it makes sense to only take a LIC Term policy. I am 38 years old and have a family of 3 dependents excluding myself. Would request your advice if it makes sense to switch insurance companies at this juncture. Thanks.
Hi Malcom,
E-mails are the best way to communicate with any insurance company.
You can write to grievance cell too if you are not satisfied with the response.
If I were you, I would continue with ABSL.
You can’t port life insurance policies. You have to purchase another one with fresh underwriting.
You can expect such a statement from an LIC agent (there is a clear conflict of interest). However, if you are planning to purchase a new one, LIC e-term plan is also a good option.
Kindly give your address and phone no. With email address.
I have a problum with LIC and will mail your my case and may contact you personally.
It is a case where suspected misinformation committed by LIC agent.
Dear Mr. Gupta,
You can leave your case details (please hide personal information) as a comment.
I will try to respond at the earliest.
Alternatively, you can write to me at support[at]personalfinanceplan.in.
Hello Deepesh,
Kindly suggest what remedy available for a person who had not disclosed a desese at the time of renewal of policy and supposed policy holder got expired due to incident ( fall from the second floor of a building) and not due to any desese within 2 years from the date of renewal.
dear sir
I really appericiate ur time and effort to resolve queries.my heartfelt thanks for such a noble gesture.
Request you to answer my query also
In declaration where family health status to be disclosed there is a clause weather by the age of 65 parents have gone any medical surgery in that by oversight my advisor stated NO. But tge fact is that my father completed 65 years in feb and was detected and undergone bypass surgery after one month completing 65 years i.e in March. My Premimum for 3rdyr is due in April.
Shall i terminate the poicy or continue as operation was done after completing 65 years.
Thanks in advance
Hi Sarvesh,
If your father underwent surgery after the age of 65, you have not lied or hidden any info.
So, nothing to worry about.
R/sir,
Please provide me the email ID of LIC of India’s customer care for Haryana region,on my email address:
Thanks.
Jyoti
Hi Jyoti,
Please visit this link and select the right option for you.
https://www.licindia.in/Customer-Services/Phone-Help-Line
Sir,
Hiding criminal cases will effect the term plan claims? If we disclose in proposal form about conviction/acquital in criminal case as yes, what will be the consequences? Whether insurer will accept it?
It’s family case/498a case and got acquitted!! Whether we can disclose
If the information is sought and you do not provide, then it is non-disclosure of material information.
The claim can be rejected for this reason.
I am not sure how insurance companies treat conviction/acquital in criminal cases.
You make complete disclosure and let the insurance company decide.
Deepesh,
Hope you are doing good, Could you please suggest what are the key points , I need to consider before purchasing any Health Insurance as per present health insurance plans….
dependent family members – my wife only.
Hi Sumit,
I am doing well. Hope you are doing well too.
Unfortunately, I don’t have a single post that covers these points.
I will provide links to a few posts.
https://www.personalfinanceplan.in/insurance/things-to-consider-while-purchasing-health-insurance/
https://www.personalfinanceplan.in/insurance/10-exclusions-health-insurance-plan/
https://www.personalfinanceplan.in/financial-planning/health-insurance-plans-you-should-avoid/
https://www.personalfinanceplan.in/insurance/how-room-rent-sub-limit-can-affect-your-insurance-claim/
Please go through these posts.
Happy to answer if you have any queries.
COULD YOU recommend some good Insurance companies
With life insurance, go with an insurer that you are comfortable with.
With health insurance, it is a bit tricky. Look at the coverage you need and that the plan offers. Of course, premium is important too. And then make a choice. I always prefer established insurers for my clients. No guarantee though that this ensures claim settlement.
Hello Deepesh
Your blog above is very insightful/helpful
Is this Victorian/Australian LAW?
I had TPD plus Maximiser, Own Occupation, Life and Income Protection Insurance
I place a TPD and Income Protection Claim after 2.5 years of having the Policy
My policies were cancelled/void after the 3 years as my Insurer has said my duty of disclosure was fraudulent? (which is not true)
Is this posible?
How can the Insurance company Avoid my policies after 3 years!?
After placing my claims they took forever/years to go through everything and then decided to Void everything after searing through every little bit of medical evidence over my 38 years of living, and now I am left with nothing.
Hi,
Thanks!!!
I write about the treatment as per Indian laws.
Am not in a position to comment on laws in any other country.
Hello Deepesh,
I need to buy a health insurance plan for (my family Myself+wife) . Could you please recommend a good comparison for all available family floater health insurance plans today .
Also, please let me know what are point I need to keep in mind while buying health insurance.
For quick reference and shortlisting, you can look at Mint Mediratings or try out any insurance aggregator websites.
Once you have shortlisted a few plans, go through the policy wordings for better understanding.
You can also go through this article.
https://www.personalfinanceplan.in/things-to-consider-while-purchasing-health-insurance/
Hi Deepesh,
Is that true…that IRDA is planning for new reforms in Health insurance sector…….. Do you know what are these key reforms….
Hi Sumit,
The role of the regulator is to figure to ways to improve the industry in general.
IRDA is no different, at least on paper.
Even this 3-year rule was put in by the Government.
From what I know, they have been working on including mental illness under health coverage.
Apart from that, I am not really aware of anything groundbreaking.
Do let me know if you have heard or read about something. I will be quite happy to look into that area.
Dear Deepesh,
My friend applied for a life term insurance 6 months ago (Aug2018) and got the policy from the insurer after doing all required medical checks by the insurer. Though he is a healthy person he is a diabetic (early stage) but having his sugar levels under complete control. He hasn’t disclosed this while applying the insurance, however he has disclosed his family history of Diabetes while applying the insurance. His medical condition was not detected by the insurer during his medical check and he got insured now. Does he need to declare his present condition as diabetic to the insurer? Will his claim get rejected within the 3 years in case of his demise? If not found by the insurer after 3 years, will his family get his sum assured after his demise? Please clarify his doubt.
Dear Sudhar,
This is material non-disclosure. The claim can be rejected.
If not found for 3 years, the family should get the claim.
However, please note this “3 year rule” has not really been tested yet. Who knows what will happen when the insurance company goes to court?
Respected Sir :
The late mother of my friend passed away a couple of years back. The mother had taken a loan for purchasing a dwelling and insured the Flat with the same Bank. THE MOTHER WAS ILLITERATE. The claim was denied for the reason that the material facts of illness was not disclosed which she was cured years before obtaining the Policy. We are interacting with the Bank from several months and finally the Proposal Form was collected by us from the Bank and we noticed the errors which have been mentioned below :
1. SLIPSHOD METHOD OF FUNCTIONING BY THE REPRESENTATIVE DESIGNATED AS
THE FINANCIAL SERVICES ASSOCIATE, SALES OF THE BANK WHO FILLED THE
PROPOSAL FORM
2. MEMBER ENROLLMENT / PROPOSAL FORM NOT VALID AS THE MEMBER
ENROLLMENT / PROPOSAL FORM ARE INCOMPLETE AS THE MANDATORY POINTS
HAVE JUST BEEN LEFT BLANK
3. DATE ON THE PROPOSAL FORM MISSING
4. SIGNATURE OF THE FINANCIAL SERVICES ASSOCIATE MISSING
5. NAME, ADDRESS, OCCUPATION AND SIGNATURE OF THE WITNESS MISSING
6. DECLARATION AND SIGNATURE MADE BY A THIRD PERSON THAT THE INSURED
MEMBER HAS SIGNED IN VERNACULAR LEFT BLANK
NOW
AGAIN THIS QUESTION IS AT THIS POINT IN THAT ON WHAT GROUNDS DID DENY THE CLAIM WHEN IT WAS THE RESPONSIBILITY OF FINANCIAL SERVICES ASSOCIATE, SALES TO ENSURE THAT THE FORM WAS FILLED COMPLETELY AND CORRECTLY AS THE INSURED WAS ILLITERATE? In addition on the basis of this Proposal Form the Policy Certificate was approved and issued without the signature of the Bank Manager of that particular Branch on the Proposal Form.
Sir, your guidance and advice our next course action would be of great help.
Yours truly,
Robert Paul
Pune
Date : 21.03.2020
Respected Sir :
Eagerly waiting for your valuable reply to the above query.
Robert Paul
I am a doctor by profession and insurer have denied my policy after receiving the first premium on the basis of abnormal TMT report which I am sure is very normal (I will say supernormal) because I have read the report when it was being performed. Hear at our hospital I checked it multiple times which was very normal because I am an athlet and Yoga practitioner too. I asked for the report which they are not mailing. Now problem is nobay will insure me as it has already been declined by one company (Edelwies Tokio). At the same time I also had appied to another company (icici prulife), they also didn’t contact me at all after receiving the premium, not even for medical testing. Thus my Rs 60,000/- Rs (Aprox) is locked since arround a month. Please guide me in this regard.
Hi Avinash,
Difficult for me to comment on Edelweiss’s rejection. Some insipid reporting might have jeopardized your case.
You might also want to escalate to Edelweiss life grievance officer and get the reports.
About ICICI Pru life application, please escalate this to the grievance officer at ICICI Prudential.
(https://www.iciciprulife.com/services/grievance-redressal.html)
The lockdown might have prevented medical testing. But yes, with these guys, you have to follow up.
Respected Sir :
I, am eagerly waiting for your valuable guidance.
Yours truly,
Robert Paul
sir,
Thanks for the above information,
Is above rule applicable for paid up policy, for example, if lic jeevan anand policy ppt is 30 years and has paid premium for only 15 years and made it a paid up policy, can insurance company deny the claim in case of wrong date of birth is printed or any other error in policy document?
Yes, possible.
Hi Deepesh,
regarding Family Health insurance, I want your advise obetween increasing the base suminsured Vs Super Topup
– I am 41 and want to buy family floater policy but m confused if I should buy 10 lacs of base policy which will cost me more premium and in long run I will have to keep increasing due inflation in health services. so cost will be increased more.
Else If I should by a base policy of 5 Lacs + Super TOP of 25 lacs…that way I will me cover in less premium but Super top has its own terms and conditions , iwhich are not same as base policy..
One of my selection criteria is also the waiting period which is applied fresh on any increased coverage…so I want to opt and buy only either of the ways above for which I will not have think to regret and buy the other option above in later years. offcourse lastly which cost me less and more beneficial in long run.
Need your expert advise on this.
Hi Sumit,
There can’t ever be a crisp answer to such questions.
While the marginal cost of health insurance is low, I understand that the premium for HIGH Base cover will be more than LOW base cover + super top up.
And the cost is an important parameter.
However, I am a bit uncomfortable about claiming from two policies. I also worry that super top-up claims may not always be cashless.
If I were you, I would buy a solid base cover first. For a family of 3-4 members, a Rs 5 lacs base cover seems a bit low.
Go for 10 lacs cover.
Any additional coverage, you can buy through a super top-up cover.
Or if you have employer cover and your base plan offers no claim bonus upto 100% of sum insured, you can take the Rs 5 lac base cover too.
Hope this helps.