Life is an unpredictable journey, full of surprises. While you do not know what life may throw at you, you can take measures to ensure that your loved ones are financially protected, should something unexpected happen to you. And how do you ensure this?
With a life insurance policy. It guarantees the financial security of your family, even if you are not around to provide for them. And, it also helps you achieve your own financial goals.
However, purchasing a life insurance policy is only the first step. To truly benefit from it, you and your family need to know how to make a claim. Making a claim can be confusing and tedious.
It is necessary to understand every step of the claim process to ensure a hassle-free experience without any delays or disputes. In this article, we will take a closer look at the different types of claims in life insurance and guide you through the process of making a claim.
What is Life Insurance?
Life insurance is an agreement between you and an insurance company where the insurer agrees to provide you with financial protection against life risks. In exchange for this protection, you pay a fee, which is known as a premium.
When you purchase a life insurance policy, the insurance company promises to pay out a fixed sum of money to your family members in the event of your passing away. Some life insurance policies also provide a maturity benefit if you survive the policy term like whole life insurance plans, endowment plans, etc.
Life insurance serves as a crucial investment. Its key feature is providing your loved ones with financial stability, whether or not you are around. It also serves as a powerful tool for long-term planning and goal-setting. For instance, life insurance can help you save for important life events such as your retirement, your child's education, etc.
Let us now discuss the different types of claims in a life insurance policy.
Claim Types in Life Insurance
There are three types of claims under a life insurance policy -
The most common type of claim made under a life insurance policy is the death claim. If you pass away during the term of the policy, your nominee will need to file a claim with the insurance company to receive the death benefit. The death benefit amount is usually determined based on the type of policy purchased and its associated terms and conditions.
Steps Involved in the Death Claim Process
Here are the steps the nominee needs to follow -
1️⃣ Intimating the Insurer
The first step involved in this process is informing the insurance company about the demise. To do so, the nominee can contact the insurance company through any one of the following channels –
- Calling their toll-free number,
- Website, or
- Visiting a branch office.
2️⃣ Submitting the Necessary Documents
The next step in filing a claim is to submit a claim form and other relevant documents to the insurance company. When submitting the documents, the insurance company will provide the nominee with a system-generated ‘acknowledgement of receipt’. This is to confirm that the insurer has received the claim documents. The nominee should also keep a scanned copy of the entire document set for future reference.
Once the insurer receives the claim documents, they will verify the details and initiate the claim intimation request.
3️⃣ Providing Additional Documents, If Required
As part of the claim process, the insurance company may request additional documents from the nominee. The insurance company may communicate these requirements to the nominee through email, SMS, post, or phone. It is thus essential for the nominee to check their communication addresses regularly and respond promptly to any such requests.
4️⃣ Claim Approval and Payout
Once the insurance company receives all the necessary documents, the insurance company will check if all the information provided is correct and complete. This will determine whether the claim request is accepted or rejected.
- If the documents have any incorrect or missing information, the claim may be rejected.
- If the insurance company approves the claim request, they will proceed with the payout process. The claim amount will be paid out to the nominee as per the payout option chosen by you during the policy purchase.
When you purchase a life insurance policy, you are essentially paying premiums to the insurance company to provide you with coverage for a certain period called the policy term. If you survive this term, you can make a maturity claim. Based on the policy type, the insurer pays out the maturity benefit to you.
The claim amount can help in achieving financial goals such as paying off debts, financing your child's education, or even planning for your retirement.
Steps Involved in the Maturity Claims Process
Here are the steps you need to follow -
1️⃣ Visiting Your Insurer
The first step in the process is to visit your insurance company. You will be required to provide the needed documents as specified by the insurer to start the claim process.
2️⃣ Submitting the Required Documents
When you file a claim, it is important to ensure that you have all the necessary documents in order for your claim to be processed smoothly. Here are the two essential documents you will need to submit-
- A properly filled-out claim form/payout form
- The original policy document
After the documents are submitted, an assessor will review them to determine if the claim is valid.
4️⃣ Approval of Claim
After the insurance company has verified and approved your claim, you can expect to receive the maturity claim amount in your registered bank account within 30 days. This amount will be paid out according to the payout option that you have chosen.
If the insurer rejects your claim for any reason, you will be informed of the same by phone call, SMS, or email. The insurer will also provide you with a clear explanation of why the claim was rejected.
A rider is an add-on that can be added to your policy to provide extra protection against specific events. Whether or not you can make a claim depends on the type of rider you choose and the occurrence of the specific event like an accident, critical illness diagnosis, death, etc.
Steps Involved in the Rider Claim Process
The process for making a rider claim may differ depending on the type of rider you have purchased. For example -
?If you have a Critical Illness Rider, you can make a claim if you are diagnosed with a serious illness listed in the policy document. However, you will have to complete the required waiting and survival periods as required by the insurer.
?If you have an Accidental Death Benefit Rider, your family will be able to make a claim if you pass away due to an accident during the policy term.
And so on.
The process of making a rider claim varies based on the type of rider as well as the insurance company you choose. Typically, you or your family will need to inform the insurance company about the event and provide the necessary documents. They will then verify and process the claim.
Please note that the process for making claims and the documents required may differ across various insurance providers.
Now that we have come to the end of this article, we hope you have a better understanding of the different types of claims that can be made under a life insurance policy. Make sure you and your nominee are aware of all the aforementioned steps - so as to avoid any potential problems at the time of claim.