Last Updated on July 30, 2019 by Gopal Gidwani
Before you buy life insurance, it is important to understand your rights under the law. Not many policyholders are aware of the fact that they have certain rights, which they can use at any point of time after the purchase of the policy. IRDA rules state that each policyholder has rights and duties that go hand in hand.
Important rights that policyholders have under the law
Explained below are some salient rights that you should know about.
1. Point of Sale
As a policyholder, you have the right to seek complete material information about the life insurance policy so that you can select the most suitable plan as per your requirements. In case you fail to fill the proposal, you have a right to receive a certificate from the agent at the end of the form. The certificate should mention that you have been explained about all the details of the form and that you have understood the same. It should also state that you are aware of the significance of this contract.
2. Proposal for insurance
In life insurance, a proposal for the cover is a written agreement. An insurance company must provide a free of cost insurance proposal within 30 days from the date of accepting the proposal and the form. If the proposal form has not been used, the insurer needs to record the same information in writing or orally and confirm the same with you within a period of 15 days. They need to incorporate this information into the policy or cover note. Once this has been processed, you can decide on the same within 15 days.
3. Claims procedure
When you buy a life insurance policy, there is a policy contract, which will state the primary documents that are needed to support a claim. The insurer can clear any query or ask for additional documents within a period 15 days from the date of receipt of the claim. However, they cannot ask you about any details at a later stage. Your claim should be paid or disputed with all the reasons within 30 days from the date when you had filed for the same. If your claim is accepted but you have not received the payment from the insurance company for some reason, the company will hold this amount for your benefit. The amount held by the insurer will earn interest at the rate that is applicable to a savings bank account.
As a responsible policyholder, it is of utmost importance for you to know about your rights. You need to be aware of the fact that as per rules, you can expect a claim amount paid to you within 30 days of making an application. Additionally, the claim process need not be tedious or stressful. The insurer cannot ask for new documents every other day without any valid reason. They have a 15-day window within which all the documents will be collected. Your claim will be addressed within a period of 30 days. As a smart investor, you need to ensure you need to read the policy documents thoroughly and ensure that they are in order. Be aware of the rules and regulations to take the right steps at the right time in case of a claim.