Life insurance is a contract between the policyholder and the insurance company in which the insurance company agrees to pay a definite amount of money to the nominee of the policyholder in exchange for a premium paid by the policyholder. Life insurance penetration in India is still on the lower end as compared to other countries. The life insurance penetration in India is 3.7 % of the GDP as against the world average the 6.31%.
Once upon a time in India, life insurance was considered a waste of investment due to fraud and lack of awareness among the public. But due to the advancement in technology and insurance companies, life insurance has become accessible to many people. The level of awareness regarding life insurance has increased in recent days and the sector is growing at 11 % to 12% YOY.
Insurance is a service since the product is intangible and is useful only at the time of the demise of the policyholder or during maturity. The main purpose of taking a life insurance policy is to help the family of the policyholder in the event of the sudden demise of the policyholder. The life insurance claim process is a necessary and often complicated step in the life of a policyholder. This article will explain what to expect when filing a life insurance claim and how to get through it with ease.
What is Claim Process in Life Insurance?
A life insurance claim is a request for payment from an insurer, in consideration of the death of a policyholder. The claim is typically filed by someone with a legal right to receive benefits, such as the spouse or other beneficiary. The person filing the claim must provide evidence that the insured individual has died and that they are entitled to benefits under the terms of the policy. The insurer will then examine any evidence that has been provided and decide on whether or not to pay out any money.
Step by Step understanding of the Life Insurance Claim Process
Claims processes are an important part of the life insurance industry. The life insurance claim process is a lengthy and complicated process that involves different levels of expertise. Insurance companies are designed to provide the best possible customer experience and ensure that customers receive the benefits they deserve.
The life insurance claim process starts when a customer contacts their insurer and requests a claim. The company then assigns a case manager to review the claim and determine whether it is eligible for coverage. The company will also review any medical records or other documents provided by the customer, as well as any information about any other life insurance coverage that may be available to them.
The most common type of claims process is for death benefits, which provides financial support to surviving family members in cases where an insured person dies before their policy expires. In this situation, beneficiaries can collect death benefits if they have been designated on the policy or if they were named with a group policy that lists them as eligible beneficiaries.
Life Insurance Death Claim Process
Let us understand the step-by-step procedure of the life insurance claim process in India:-
Step 1: Claim Intimation
- In the case of Maturity claims, a policyholder should inform the insurance company regarding the maturity of the policy or survival of the policyholder.
- In case of early death claims, the nominee of the policyholder or the immediate family members can lodge a claim with the insurance company.
The liability claim intimation can be done online or offline which should contain basic information such as the Name of the Policyholder, Policy number, Date of Maturity, etc. In case of offline intimation, the claim form can be availed from the nearest life insurance branch and duly filled out before submission.
A claim intimation number is provided by the insurance company which is to be retained and used for any further communication with the insurance company.
Step 2: Submission of Documents
Once the claim intimation is done and the claim intimation number is obtained, the next step is to provide all the relevant documents to the insurance company. It is advisable to submit all the documents in one go to avoid to and fro communication with the insurance company.
The following documents are to be provided by the nominee or the policyholder:
- Certificate of Death (Death Claim)
- Panchanama report (Death claim)
- Statement from the hospital if the insured is admitted
- Certificate from medical attendant stating that the illness of the insured
- F.I.R Report (Accident death claim)
- Cremation or burial report
- Certificate from an employer if the deceased is an employee.
- Age proof
- Residence proof
- Relation proof with the policyholder(Death claim)
- Deeds of assignment (if any)
- Policy document
- Duly filled claim form/ claim intimation number
- Bank account details
- Any other documents as required by the insurance company
Step 3: Claim Settlement
As per regulation 8 of the IRDA (Policyholder’s Interest) Regulations, 2002, the insurer is required to settle a claim within 30 days of receipt of all the required documents. If the claim is an early claim (a claim which occurred within 3 years from the date of policy start date) then there would be further investigation by the insurer. This procedure has to be completed within six months from the date of receiving written intimation of the claim.
After receiving all the documents the claim settlement procedure of life insurance is processed and the insurance company releases the funds into the account mentioned in the claim intimation form.
Life Insurance Maturity Claim Process
The life insurance maturity claim process is a process of claiming the maturity benefits from an insurance policy. Life insurance maturity claims are a complicated process. It is important to understand the process and know how to handle it in case of an emergency. The process starts by reviewing the policy and determining if there are outstanding premiums or any other outstanding obligations that need to be paid before the claim can be processed.
After this, the life insurance company will request all necessary documentation and information that is required for a claim to be paid in full. This includes death certificates, copies of tax returns, mortgage statements, or any other documents that may be needed. The company will then review these documents and decide whether or not they will authorize the payment of the claim.
Life Insurance Rider Claim Process
Life insurance riders are an optional add-on to a regular life insurance policy that can provide additional coverage in the event of specific events. There are many types of life insurance riders:
- Accidental Disability Insurance Rider
- Critical Illness Insurance Rider
- Waiver of Premium Rider
- Accidental Death Benefit Rider, etc.
For different life insurance riders, different claim proceedings are required. Some riders may be valid with the death claim like accidental death rider or some riders need to process claims like waiver of premium rider in case of disability. To claim, the insured person submits the rider claim form to their insurer and provides any necessary supporting documentation.
- For Critical Illness Rider Claim: Submit necessary medical documents such as first diagnosis report, Doctor’s report, etc.
- For Accidental disability rider Claim: Submit a copy of FIR, Certificate of disability, doctor’s report, etc.
Life Insurance Policy Claim Process Flow Chart
5 Important Things to Know About Life Insurance Claim
The life insurance claim process is a lengthy and complicated process that involves different levels of expertise. For example, the life insurance company will need to verify that the death was not due to suicide or the result of an accident. To make this process smoother, we have compiled a list of four important things you should know before starting your life insurance claim.
- Know the reasons for life insurance claim rejection.
- Life insurance claim is a process that takes time to complete.
- The life insurance company will not pay out the claim unless all the necessary documents are provided.
- If you have any doubts about your claim, it is best to contact the life insurance company for clarification.
- Before buying a life insurance policy check all the claim settlement ratios of life insurers.
The process of life insurance claims is not as complicated as it may seem. There are many ways in which you can make your life insurance claim process go smoothly so that you get the maximum benefit out of your investment. Some tips to help you avoid big financial losses:
- Do not make any changes to your policy without first consulting an expert.
- Keep a copy of all documents related to your policy and keep them in a safe place.
- Make sure that the beneficiary listed on the policy is up-to-date and accurate.