The Rights of Life Assurance Policyholders
Life insurance is a long-term contract and this is the very reason why we need to understand fully the terms and conditions under the policy contract; and also know our various rights under the terms and conditions.
There are various life insurance or assurance policies. These are basically design to bring us solutions to the problems life presents to us. Some of the policies are funeral, education, investment policies, pre-pension policies among others. All these are design to meet a particular need.
We have in a previous write up discuss the ten (10) things one needs to know before he/she signs a life assurance policy. We would also want us to know some of the rights of the policyholder. Kindly find below some of the rights of the policyholder;
Cooling Off Period
Your first right is to know that every life policy has a cooling-off period. It is normally 15 days for client to read through the policy document before signing a document receipt. The client has every right to reject the policy if the terms and conditions are not favourable and the premium should be refunded. Client accept the policy after signing the document receipt.
Claim
Insurance Companies should conspicuously display their claims procedures and documentation required to process claims. Instructions as to what claimants should do in the event of a claim should be stated in the policy document.
Maturity Policies
In case of a maturity claim, the life insurer needs to inform the policyholder, beneficiary, assignee, life assured and issue a discharge voucher at least two (2) months before the maturity date. When all required documents are submitted, the insurer has three (3) working days to compute and pay the maturity benefit to the beneficiary.
Policy Education
Life insurers shall educate policyholders on the relevant provisions of their policies. Insurers shall ensure that their policy terms indicate as to how, when and to whom claim should be notify. Policyholders should be educated to report claims in a timely manner because it is crucial for preservation of evidence that may be critical in admitting liability
Claim Guidelines
It is also very important that policyholders understand the claim guidelines, procedures and processes of insurance companies.
Acknowledgement of Claim
Upon receipt of claim, insurers have two working days to acknowledge receipt and provide claim form or request any additional information. In case of death claims, partial withdrawals and surrenders, the insurer’s reply shall quote the amount payable, subject to the admission of claim
Claims Investigation
In the event of any investigation, the insurer shall provide up to date information on the progress to the claimant or policyholder.
Acceptance / Rejection of Liability
The insurer has three days upon receipt of all documents and after investigation to accept or reject liability.
Payment of Claim
Where claim is admissible, the insurer has three working days to compute the claim and arrange for payment. Where claim is delayed for more than 4 weeks, the insurer shall pay interest on the amount (Treasury bill rate)
Conclusion
- Maturity Claim – the insurer shall pay the claim on maturity date or within three working days after maturity
- Death Claim – the insurer shall pay the claim within five working days
- Surrenders / cancellations / Partial Withdrawals / Cash encashment – the insurer shall pay within two working days
Insurer shall update the complainant regularly on the progress of the claim. If a final response is not sent within eight (8) weeks, the complainant must be informed of their right to refer the matter to NIC. The loss of a policy document is inconvenient but not crucial, as the policy is not the contract itself but and evidence of it. If the document is lost, and the insurer is satisfied that the policy is genuinely lost. It may ask the claimant to execute a statutory declaration, setting out the circumstances of the loss. And stating that, the policy has not assigned or charged. To help prevent these little inconveniences, kindly keep your policy document well. Irrespective of the type of product; all processes leading to the payment of claim shall not exceed for (4) weeks. From the date when all documents have been submitted. Where the insurer has a genuine reason for going beyond this date, insurer shall clearly document this reason to the claimant.
Written by: Justice Peprah Agyei.
A Chartered Insurer and an Associate of the Chartered Insurance Institute of United Kingdom and also Ghana (ACII-UK, ACIIG), and holds MPhil in Enterprise Risk Management and Business Consulting from Kwame Nkrumah University of Science and Technology. Attained Bachelor’s degree from University of Ghana, Legon and have Applied Insurance studies, Diploma and Advanced Diploma (AAIS & AIS) from Ghana Insurance College / Malta Insurance Training Institute.
+233 (0) 549705031 kwameabann@gmail.com
Reference
-Various life policies and insurance documents
-NIC Life Insurance claims guidelines