Message from LICI general manager — Pradeep Shenoy
APRADEEP SHENOY LICI general manager
FTER Food, clothing and shelter, life insurance has become one of the basic necessities of modern life. Once you have insured yourself, you can rest assured that the future of your loved ones is secured in any situation. Also, the hazard of surviving too long will also be taken care of by the sizeable amount that you will receive at the end of the policy term as maturity claim.
However, to get the most out of your life insurance policy, you have to take care of certain very important things. Every life insurance policy holder must read and understand the importance of the following aspects so that there are no hassles and unpleasant surprises at any time during the term of the policy;
1. Sharing with family members that you are insured: There is no point in taking a life insurance policy and keeping it a closely guarded secret from your family members! You have taken the wonderful decision of getting yourself insured. Now, tell them about it. It has happened that the family members, including the nominee under the policy, is unaware of the fact that the deceased was insured. They come to know of this several months or years after the death of the policy holder, accidentally. This is really sad and is totally opposite to the very idea of life insurance which is really to show that you love your family.
2. Keeping the policy ‘in force’: Purchasing a life insurance is just the beginning. The policy may have a term of 15/20/25 or more years. Keeping it “In Force” for full benefits by paying the premiums in time is very important. A lapsed policy (under which premiums have not been paid regularly) does not benefit anybody. If the premiums are being deducted from salary, then once in a year, it needs to be confirmed that they have been accounted for properly.
An annual statement will be sent by the life insurance company which should be scrutinised carefully. ‘Status report’ can be obtained once in few months to check this. If the premiums are being paid directly, then it is important to pay them within the grace period of one month from the due date;
3. Reviving a lapsed policy: If your policy has lapsed due to any reason, there is hope. It can be revived by paying entire or a part of the arrears of premium with late fee under any of the revival schemes offered by the life insurance company. The most suitable method can be chosen and policy revived so that the full benefits are available;
4. Keeping the policy document safe: The original policy document is the evidence of contract of life insurance and therefore it must be kept very securely. It should not be allowed to be torn/mutilated. It will be needed while applying for loan or claiming benefits like Survival Benefit/Maturity Claim and even Death Claim in case of unfortunate death of the life assured during the term of the policy.
5. Nomination: What is the value of a life insurance policy if it is not able to get the dependent, the claim amount promptly on the death of the life assured? This is going to happen if there is no proper nomination under the policy.
Many times, it happens that the nominee has died before the life assured and new nomination was not made or nomination was not changed with the changing personal circumstances like marriage, divorce or remarriage etc.
If a death claim remains outstanding for months due to ‘open title’ it defeats the very purpose of taking the policy. Many cases remain pending for want of Probate which is due to the fact that there is no valid nomination under the policy;
6. Mortgaging your policy: Your life insurance policy is a really wonderful thing! It can give you cash in case of emergencies. You can raise a loan by mortgaging your life insurance policy with your life insurance company. The process is very easy and quick. You can get the loan credited into your bank account within a day. Similarly, the policy can be assigned to any financial institution as a collateral security and loan can be obtained as per its practice.
However, it must be remembered that loan needs to be repaid and it carries interest, not paying the loan or interest will result in the same being recovered from any payment or claim that may fall due under the policy;
7. Updating your contact details: Always inform your life insurer about your latest address, email id and mobile number so that it can contact you for any purpose. Many maturity claims remain outstanding as the policy holders become untraceable for the life insurance company, particularly when the premiums were paid only for the first few years and the policy was in a lapsed condition for some years before maturity; and.
8. Keeping in touch with your agent: While it is expected that your life insurance agent will keep in touch with you and help you with any servicing needs, you should also make a conscious effort to be in touch with him.
This will come in handy if you are not able to visit the office of the company for any reason or have immigrated. The agent an also guide you suitably on any matter connected with your policy.
I am sure that if any life insurance policy holder takes care of the above, he will enjoy the full benefits that his policy has to offer without any hassles.