A life insurance plan is bought to ensure the financial safety of your loved ones and to help you fund your own set of financial goals. Now, what if the unexpected happens and you pass away? Or what if you survive the policy period? What happens next?
Well, a claim, of course. You or your nominee will have to raise a claim request to the life insurance company to get the cover amount under your plan.
How does the claims process work under life insurance? Let’s discuss - in this article!
Claim Settlement Process for Life Insurance Plans
A life insurance plan is a contract between the policyholder and the insurance company that guarantees a fixed sum of money to either the policyholder or their family. It can be claimed in two situations –
1️⃣ If the insured passes away during the policy term
The insured is basically the person whose life is covered under the plan. Their nominee/s can claim the cover amount as the death benefit, under all types of life insurance plans.
2️⃣ If the insured survives the policy term
The insured can claim the cover amount as the maturity benefit, under life insurance plans that offer the same like endowment plans, money-back plans, whole-life plans, etc.
Steps Involved in the Claims Process of Life Insurance
Whether you are the insured or the nominee, understanding the procedure to claim a life insurance policy is essential to avoid any confusion at the time of making a claim. It’s best to be prepared beforehand.
Here are the steps involved –
?In Case of the Insured Person’s Death
1️⃣ Informing the insurer
The first step is to inform the insurer of the insured’s death to begin the necessary procedures to process the claim. To do this, the nominee can contact the insurance company by visiting the branch office or through email, SMS, toll-free number, or website.
2️⃣ Submitting the necessary documents
Next, the nominee will need to submit the claim form along with other relevant documents to the insurer. The nominee should keep a scanned copy of the entire set of documents for future reference. The documents required may vary across insurers and products.
When submitting these documents, the nominee must make sure that the insurer provides them with a system-generated acknowledgement of receipt. Once the insurer receives the necessary documents, they will verify the same and initiate the claim intimation request.
3️⃣ Submitting additional documents if needed
The insurance company may also request additional documents from the nominee through email or post. It is crucial that the nominee responds promptly to any such requests and provides the additional documents as soon as possible. Delaying or failing to provide the required documents may cause unnecessary setbacks in the claim process.
To process the claim, the insurer may require the following documents from the nominee of the policy:
- Claimant statement form
- Death certificate (self-attested copy)
- KYC documents of the nominee/beneficiary (self-attested copy)
- Bank details of the beneficiary
Additional Documents for Claims Within 3 Years
- Original policy document
- Medical attendant's certificate (if any)
- Hospital or treatment records, if any (Self-attested copies)
- Employer's certificate (if applicable)
Additional Documents for Accidental or Unnatural Death Claims
- FIR and final police closure report
- Driving licence (if in case death happened while driving)
- Post mortem report
- Valid vehicle insurance document of the vehicle (if death was because of a road traffic accident)
- Police inquest report/inquest panchnama
- Newspaper cutting (if any)
4️⃣Claim approval and payout
After the nominee submits all the required documents, the insurance company will thoroughly inspect them. The insurer will then determine whether to approve or reject the claim. It is hence necessary to ensure that all the information provided in the documents is accurate and up-to-date.
If the insurance company approves the claim, the nominee will receive the payout according to the payout option chosen by the policyholder. The payout may be made in a lump sum, regular payments, or a combination of both, depending on the policy terms.
However, if there is any incorrect information, the insurance company might reject the claim.
?In Case the Insured Person Survives
1️⃣ Visiting the insurance company
The insured person will first need to visit a branch of the insurance company in person and provide the necessary documentation to support their claim.
2️⃣ Submitting the required documents
To ensure that the claim request is processed, it is essential that the insured submit all required documents. These typically include a properly filled-out claim form or payout form and the original policy document.
After receiving the required documents for a claim, an assessor will review and verify the information to determine the claim's validity, based on which the assessor will determine if the claim is to be approved or not.
4️⃣ Approval of claim
Once the insurance company has evaluated and approved the claim, the maturity amount will be processed and deposited into the insured’s registered bank account within 30 days. The bank account details should be accurate and up-to-date to avoid delays in receiving the payout.
On the other hand, if the insurer rejects a claim for any reason, they will notify the insured by SMS, phone, or email.
Keep This In Mind!
?The claims process and document requirements may vary across different insurance providers and so, discuss the entire process and required documents with the insurance provider.
?Once you have received the document checklist, keeping them safe is of utmost importance to avoid loss/misplacement. For this-
- Store all the policy documents in a secure location.
- Set a DigiLocker or e-insurance account for digital storage and convenience. You can share the account details with your family so they have access.
We hope this information has been helpful in understanding the claims process of life insurance policies. Each insurance provider may have different requirements and follow different claim processes, so make sure you go through your policy’s terms and conditions. Also, you can contact your insurer to help you navigate the process and provide you with the support you need - to ensure a seamless claim process.