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A policyholder buys a term insurance plan to get life cover and ensure his/her family is financially protected in the unfortunate event of the policyholder’s death during the policy tenure. Proper knowledge of the claim process is required to ensure the nominee takes the right steps to claim term insurance after the policyholder's death. Let’s understand the term insurance claim settlement process here.
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The claim process follows the death of the policyholder, upon which the nominee/claimant can go ahead and claim the death benefit. Below are the steps that determine the processing of the claim:
After the policyholder passes away, the nominee can intimate the term insurance claim settlement process by filling out the Death Claim Form. This form can be submitted directly to the head office, bank branches, or nearest offices or sent via email to the insurer. Along with the form, the nominee needs to provide attested proof of identification and address. The Death Claim Form is available both online on the company’s website and offline at branch offices.
The nominee or claimant must submit the necessary documents along with the form to confirm the details provided to the insurance company about the policyholder's death. These documents should be provided within the given timeframe. You can understand the list of documents required to be submitted to the insurer from the below table:
| Death Types | Documents Required |
| Mandatory Documents |
|
| Additional Documents Required: | |
| In case of Medical//Natural deaths |
|
| In case of accidental/unnatural deaths |
|
When the company receives all required documents and forms, the claim process starts getting processed. The company checks and verifies the documents in accordance with the requirements, makes a decision (subject to T&C), and finally, communicates the same to the nominee/claimant.
The Insurance Regulatory and Development Authority of India, aka the IRDAI, requires all insurers to pay death claims within 30 calendar days. The duration begins from the date that the nominee of the policyholder submits all required documents and clarification.
The insurer can conduct an additional investigation if there is a need to do so within 60-90 days after receiving the claim notification. If the claim cannot be settled within 30 days, the Insurer will have to pay penal interest.
*Note: You can also go to their website and download the term insurance claim form.
Term Plans
You must know all the details about claiming the death benefit and make sure you understand the below-mentioned factors before filing the claim:
Reason for Policyholder’s death is covered under the plan: Check that the reason for the policyholder's passing was not exempted from the term policy before you file a claim. An exclusion could include death from a pre-existing condition, death from alcohol or drug abuse, and any hazardous activities.
Policy is still active at the time of death: A term insurance claim may be denied if the policyholder is not aware of its expiry or if he/she forgot to pay the premiums on time, leading to a policy lapse.
All information/details provided match the documents submitted: You must ensure that your claim form and the information in the term policy documents are accurate. You should carefully check these details as if they do not match your claim, you may be charged with fraud, and the claim will be denied.
*Note: You should firstly understand what is term insurance and then buy the right term plan to avoid rejection of your claims.
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The nominees must understand the inclusions and exclusions of insurance policies before they can begin the claim process.
The term plan covers death benefits for both natural and unnatural causes. Depending on the cause, certain clauses may be applicable.
For instance, only a few insurance companies pay the suicide death benefit or return the premium for deaths that occur within one year of the policy's initiation. The majority of insurers only return a small percentage of the premium.
The Insurance industry operates on risk assessment. The policyholder's risk level determines the death benefit. High-risk policyholders, such as those who smoke or drink alcohol, receive different benefits than those who don't have such a habit. Each insurance company has its own rules, and they differ from other insurers. You can calculate the premiums applicable for the suitable term plan cover using the term insurance calculator available online.
Checking the policy document is the best way to find out about specific exclusions and inclusions for the policyholder's term plan. To obtain the information, the nominee can also contact the insurer's customer service line. Once the nominee has the information, he/she can proceed towards claiming the amount accordingly.
Online term plans allow you to easily manage your policy and submit a claim in a couple of minutes. To ensure your claim is approved, you need to take certain steps. If you are the policyholder, educating your family and yourself about the claims process is important.
Unfortunately, you won't be there when the insurance claim is filed. You should inform your nominees about all information regarding the policy. This includes details about the policy, including the claim process, sum assured terms and conditions, and any other aspects.
It is also crucial to mention any add-on riders with the nominee and educate them of the same. The last thing you would want is your family denied any benefits because they didn't know it existed in the first place.
Filing a term insurance claim after the policyholder's unfortunate demise requires the nominee to have full information about the process. Improperly filled applications or missing steps can lead to claim rejection and cause the nominee to be booked for fraud. So, ensure you properly understand how to claim term Insurance after death and take the right steps to claim their policyholder's sum assured.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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