Read Your Life Insurance Policy

The first thing a life policyholder should do when the policy bond reaches him is to read the policy fully. All insurers advise the customer to read the policy and check the details therein and, should he find a mistake or error in it, to get it corrected immediately. A small lapse at this stage can create problems later.

Let us take the case of a policyholder who paid premiums through salary deductions. He called on the insurer to get his name corrected on the maturity claim cheque. He had hardly ever taken out his policy bond from its envelope in twenty five years, and had not noticed the error even while submitting it to the insurer along with the maturity claim papers.

The cheque carried the name as it appeared on the policy bond. The insurer expressed his helplessness; no correction could be done as the policy had matured and the contract period was over.

A customer should read his life insurance policy mainly for three reasons. One, to check whether he has received the policy he desired. Two, to confirm that the policy that has reached him pertains to the product of his choice, and to be reminded of its main and rider benefits and other details such as how long to pay the premium, the mode of payment, the ancillary benefits etc. Third, to know what the restrictive conditions on the benefits are and the situations in which benefits may not be paid

The regulations provide that a customer can go through his policy and return it within 14 days of the receipt of the policy document, if he disagrees with any of its terms and conditions, stating the reasons for his disagreement. He shall be entitled to a refund of premium paid, subject to deduction of medical exam expenses incurred. A refund of premium means recovery of commission paid to the salesman. This right given to the customer is a safety valve against wrong selling by unscrupulous salesmen.