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Home >Money >Q&a >Insurers hesitate to issue coverage after a health issue is diagnosed

My deceased father had taken a life insurance policy from Life Insurance Corp. The insurer says it has paid bonuses accrued only up to the date of death of the policyholder and has not paid any interest/bonus for the subsequent period, i.e., for the period from the date of death to the date of actual payment of the claim. In such a case, is the nominee entitled to receive any interest/ bonus/benefit on the overdue amount of death claim by the insurer?

—Name withheld on request

The Insurance Regulatory and Development Authority of India (Irdai) stipulates the period within which a life insurance death claim should be settled. The first requirement is that any information requirement must be raised in one go, and not piecemeal, within 15 days of claim intimation. The insurer must make a decision within 30 days of receiving the claim documents requested. If the claim is one that requires an investigation, then this must be completed within 90 days of the claim intimation and settled 30 days thereafter. For any delay beyond this, the insurer must pay interest at 2% over the prevailing bank rate. These conditions are specified in the Protection of Policyholder’s Interests Regulation, 2017. Deviations in these requirements have to be reported to the insurer’s board and are monitored very carefully. If these timelines have been breached, you should complain to the insurer for payment with interest.

I have a floater mediclaim policy of 3 lakh for the past four years. I now have some health issues. Can I take a top-up plan any time, or only on renewal, to increase my sum insured?

—Name withheld on request

A top-up plan works independently of the base plan. So, you can take it immediately without waiting for renewal. A top-up plan carries a deductible. Claim up to the deductible is not payable and reduced from the overall claim amount. However, it does not matter if you claim this deducted amount from a base plan or pay it out of pocket. So, the period of the base plan does not have an impact on the top-up plan.

Insurers are generally reluctant to issue coverage after a health issue is diagnosed. In case you don’t get a top-up plan, you can apply for an increase in sum assured at the time of renewal. Many insurers offer a one-level upgrade at the time of renewal without full medical underwriting. However, at all times, make sure you disclose your health condition accurately.

Abhishek Bondia is principal officer and managing director, SecureNow.in.

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