Do I need to tell my family about my term plan?

Yes, you do! How will your family make a claim on your life insurance if they do not even know that your term insurance policy exists? This may cause them financial distress, despite you taking the step of protecting them from such situations. 

Here is why you must inform your family about your term policy:
 

• They can claim and receive the insurance money on time
  
  
• They can use the insurance money to meet their daily expenses and other major financial goals like the children's education, wedding, healthcare expenses, and so on
  
  
• They can use the money to meet any immediate financial liabilities such as loan repayment and other debts
   

According to the IRDAI, as of March 2018, a whopping ~ ₹ 15,166 crore of insurance money has gone unclaimed.
 

Can you imagine how so many families cannot access the insurance money the policyholders have left for them, just because they don’t know about the policies?
 

Don’t be that person!

You must share all the necessary information that your family requires to be able to access your insurance amount in your absence. Some of these details are:
 

• Name of the life insurance company
  
  
• Policy information such as the insurance amount, policy duration, T&Cs (if any), additional benefits like riders, and so on
  
  
• Policy number
  
  
• Policy documents (physical and/or digital copies)
  
  
• E-insurance Account credentials
  
  
• Insurance agent/broker/advisor's contact details (if any)
  
  
• Terms for your policy in your will (if any)

Your term insurance nominee must also know how to make a death claim and the common mistakes to avoid preventing a claim rejection.

Generally speaking, there are some best practices you can also adopt after buying a term insurance plan to ensure your family can claim the insurance money smoothly without any hassles.

You must keep your term insurance documents safe in such a way that your family can access them anytime they need -
 

• Keep both physical and digital copies of your term policy
  
  
• Inform them of their whereabouts. Ensure your family has access to these at all times
  
  
• Keep all policy-related information in an online document on the cloud or on your computer
  
  
• Sync up your DigiLocker to access the e-copy
  
  
• Make sure your family knows your E-insurance Account credentials

Opt for an E-Insurance account where you can keep all your insurance policies in one place so your nominee can access them with just a few clicks