The awareness regarding term insurance remains abysmally low in India.
Term insurance is increasingly evolving to meet the diverse needs of today’s consumers.
Term insurance, which is the essence of any financial planning, is often overlooked until an unfortunate event strikes the family and ends up bearing the brunt of financial uncertainty. This coverage, instead, should be seen as an indispensable part of one’s financial journey, ensuring that those who rely on you are not left in the lurch. The purest form of life insurance, ie – term insurance comes with affordable and reasonable premiums for high coverage.
Despite its significance, the penetration of term insurance in India remains low, with many unaware of its benefits. To address this, the industry has introduced new products with enhanced features, aimed at closing the protection gap and making term insurance more accessible. A key feature that has emerged is the benefit of quick claim intimation, which highlights the critical role of immediate payouts in times of need.
Immediate claim payouts: Instant relief for families
When the primary earning member passes away, families need quick and immediate financial support to take care of expenses at hand. The quick claim intimation comes to the rescue in such cases that requires minimal formalities to process the amount of Rs 1-3 lakhs to be disbursed to the nominee. All that one needs to do here is to file the claim promptly and the amount paid helps cover urgent expenses such as funeral costs during a challenging period.
New-age features guaranteeing comprehensive coverage
The awareness regarding term insurance remains abysmally low in India. Insurers are constantly innovating with new products and features to address this challenge. A feature like quick claim intimation benefit stems from the idea that a grieving family does not need to go through extensive paperwork to obtain financial help at the time of need. The feature has been gaining momentum across the industry with leading insurers now offering it. The features make term insurance more attractive for the middle-class segment of the country. This, by extension, ensures greater penetration of term insurance in the country.
How this works
The policyholder needs to opt for a plan offering the quick claim intimation benefit. Following the demise of the policyholder, the insurance company needs to be intimated and submit necessary documents including an online death certificate, bank details, the nominee’s KYC and the policy document. Thereafter, a sum of Rs 1-3 lakh will be instantly paid to the family as per the policy. This amount will later be deducted by the insurer at the time of claim payout from the total sum assured.
For instance, out of a sum assured of Rs 1 crore, if the insurer has paid Rs 2 lakhs as the quick claim intimation benefit, the dependents will be eligible to get Rs 98 lakh at the time of payout. This ensures total transparency in the claims process.
Highly valuable for NRIs
This feature offers high value, especially to NRI policyholders who might or might not be staying with their families. In case the NRI consumer unfortunately passes away, the family in a distant land would not be in a position to secure immediate financial help. The quick claim intimation benefit alleviates the financial stress of repatriation and funeral expenses. This is a feature that should be considered by NRIs while buying term insurance.
Term insurance is increasingly evolving to meet the diverse needs of today’s consumers. They are being offered better flexibility in paying premiums to make term insurance more appealing for them. Also, higher coverage plans are becoming more affordable and accessible for a vast consumer segment. This enables individuals to secure substantial protection for their families without straining their finances. Moreover, products tailored to specific segments, such as women, are being launched to recognize and fulfil their unique needs. Quick claim intimation marks yet another milestone towards ensuring a wider and robust safety net in the country and worldwide with term insurance.
-The author is Head of Term Insurance at Policybazaar. Views expressed are personal.
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