Taking cover. Don’t keep your policy under cover

One of the biggest challenges that the life insurance industry faces is intangibility of the product. While the policy document is a legal contract and contains all the relevant schedules and conditions regarding the product, it also promises to indemnify the loss of life.

Under such circumstances, it is crucial to keep the document safe — like you would handle your property papers or financial and educational documents. One has to preserve the document, given that the beneficiary must submit the original policy while raising a claim or even to get a loan.

All investments, including life insurance, must be discussed with family. The reason: many a times, the beneficiary is seldom aware of the life insurance policy. In such a vulnerable situation, the much-needed financial support gets delayed indefinitely, thanks to the maze of legal rules.

Sometimes, the policy may be misplaced or lost due to circumstances like change in residence or natural calamity; it may even remain with your financial advisor!

It is therefore recommended that the family creates a financial check list. The beneficiaries must know whom to contact in case of an emergency or exigency.

However, here are a few tips that the beneficiaries can follow to get immediate redressal.

If you are a beneficiary unaware of where the documents might be, it is ideal to ruffle through the files in your cabinet. Chances are the insurance documents may be safely stacked away with other important legal documents like house lease, bank statements and income tax returns. If they are not, check bank safety deposit boxes or locker facilities held by the policyholder.

Bank statements and income tax returns filed might provide useful information regarding premium payments made over the past few years or deductions availed under 80C through an insurance policy. This can help track the insurance company whose services had been availed of by the policyholder.

With the advent of e-insurance accounts, safe-keeping your insurance policies has become easier. There are chances the policyholder might have used the services of an insurance repository (IR) to store the documents. Even if the policy was issued in a physical form initially, one can convert it and store it in the e-insurance account. So, even if the IR system was launched only recently, the policyholder might have availed of the services.

One can try contacting the employer of the policyholder. There are chances that the employer might have some details on the file that may prove useful or may have facilitated the purchase of insurance.

The policyholder’s phonebook or mobile may have contact details of insurance agents or bank professionals who might have sold the policy to your loved one.

While the above steps may prove helpful in finding the lost documents, the policyholder must follow some steps. A circular by the IRDA in 2014 said that several life insurance policies went unclaimed and the primary factor was the beneficiaries were not aware of the existence of such covers.

So, the beneficiary must be informed about the policy and its details.

Although locating your lost policy documents could prove to be frustrating, it is important to remain calm and not panic.

The writer is Chief Distribution officer, Aegon Life Insurance

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