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LIFE INSURANCE

All about Your Rights and Duties While Buying Life Insurance Policy

Deepti Lad Deepti Lad 07 March 2018
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We discuss about the rights and duties of certain organizations, institutions etc. However, we ought to know the same while buying insurance policies and especially, life insurance. Let’s find what they are!

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Along with the traditional LIC policies there is another thing which has become quite popular amongst the new generation i.e “The Life Insurance policies”. Of late they have tremendously gained popularity not only because they are tax-saving but also because people know the repercussions of not having one. Since the rights and duties go hand in hand it is important to know about them while buying a life insurance policy.

Rights of a Life Insurance Policy Holder

  • You have the right to know all the details of your policy
  • You ought to receive the policy document stating the terms and conditions
  • You can cancel the life insurance policy within 15 days from the date of purchase of the policy document.
  • You can return the policy stating the reason for objection
  • You are entitled for refund of the premium paid
  • The nominee of the policy has all rights to claim the death benefit amount in case of death of the insured.

Rights for a ULIP policy

  • Right to partial withdrawal
  • You can switch funds in ULIP
  • Policy can be surrendered after the lock in period ends
  • You can ask for alterations or endorsements in the policy such as:
    • Mode of payment of premium
    • Term of the policy (if allowed)
    • Increase in sum assured (if allowed) and
    • Premium redirection

Duties of a Life Insurance Policy Holder

Duties While buying a life insurance policy

  • The most simple and basic duty of all is filling correct details on the form.
  • Signing on a blank form is a big no-no
  • Do disclose all the material information about yourself since you are the risk which is being covered.
  • Do select the premium as per your affordability
  • Selecting a secure mode of payment like (ECS/NEFT)- which is an electronic mode of funds transfer
  • Registering a nominee is very important with correct name and other details is vital, or the consequences could be extremely awful.
  • Choose a premium frequency correctly
  • Avoid leaving blank columns on the form

Duties After buying the policy

  • Please make sure you hear form the Insurer within 15 days from the day you submit the proposal form.
  • Keep in touch with the insurance company. In case if additional documents are needed, please do comply with the same as required by the insurance company.
  • Once the proposal is accepted the policy reaches within a reasonable time, and in case if it doesn’t, please contact the insurance company immediately.
  • Checking the policy document is mandatory, to know if you have received what you wanted and signed up for.
  • Checking if all the terms and conditions are the same, which were explained to you initially.

How can you maintain the policy?

  • It’s your duty to pay premium on time to avoid the life insurance policy from getting lapse. Sending notice or reminders is the insurance company’s courtesy.
  • Please make own arrangements in case of cheque payments, do not wait for the intermediary or the insurance company.
  • You can also contact the insurance company directly in case of renewals.
  • In case of any endorsement/ correction in the policy, you can directly contact the insurance company or your intermediary.

Must know information

1) Nominee name can be changed even after the policy is issued, you can do that by following the below:

a.) Filling a form for change of nominee

b.) If the nominee is a minor, appoint an appointee to receive any claim paid while the nominee is still a minor

2) When the policy lapses

Please contact the insurance company immediately for reviving it.

3) When you lose your policy

a.) Please report to the insurance company in case you lose your policy document.

b.) You can get a duplicate by complying with the insurer’s formalities.

c.) Always remember the duplicate policy would contain the same rights as the original policy would do.

The rights and duties of the life insurance companies are all in compliance with IRDAI. Following the duties and keeping your rights in mind would always be of great help.

Recommended Read: 20 Basic Life Insurance Terms You Should Know About

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Deepti Lad
Written by Deepti Lad
Deepti, a vivid nature lover, would want to explore all the scenic parts of the world.