Reputation of an insurance company is mainly based upon its claim settlement ratio. People usually prefer those insurance houses that show higher percentage of claim settlement ratio. Higher percentage of claim settlement suggests more number of claims have been accepted and paid by the company.
Smooth and swift Life insurance claim settlement is not only important for the company’s repute but also vital at the time of risk management of the insured. Simple and quick settlement of viable claims is as important for the company as for the policy owner.
Classification of Life Insurance Claims
Before understanding Life insurance claim settlement procedure, it is important to identify the forms of life insurance policy claims that can be made on your policies. If broadly classified, there are three types of life insurance claims –
- Death Claim
- Survival/Maturity Claim
- Rider Claim
However, being a claimant, you should make sure of the following factors being done and fulfilled on your part to make the entire Life insurance claim settlement process smooth and easier:
- Make sure that all premiums of the life insurance plan have been paid duly without any break.
- Ensure that your plan is in full force while making the claim.
- Check for any legal barrier that does not allow you to make the claim such as any loan due.
- Confirm that you have performed your share of responsibility properly and you have all the policy related documents intact before actually making the claim.
Life Insurance Claim Settlement Procedure
Proper documentation and actions taken at the right time by the claimant can make this entire process of claim settlement easier. Below is the step-wise description of three major types of claims that can be made on your life insurance cover.
1. Life Insurance Death Claim
Claim that is being made on life insurance policy after the demise of the policy holder by his beneficiaries is called a death claim of life insurance.
- Informing the Insurance company – the first thing to be done after the demise of the policy owner is to intimate the life insurance company through written application. It is advisable to inform the insurer at the soonest because the sooner you intimate the company, the sooner they will instigate the Life insurance claim settlement process. Make sure that you provide the basic information regarding the policy and the insured while informing the insurance company such as policy owner’s name, policy number, date of demise, reason of death, claimant’s name, etc.
- Providing Proper Documentation – The next thing to be taken care of is the documents that are needed to make the claim fast. If the claimant produce proper documents Life insurance claim settlement procedure becomes faster. Following documentations are needed to produce to the insurer:
- Policyholder’s Death Certificate
- Age Proof Certificate of the Insured
- Assignment Deeds
- Policy Documents
- Other documents asked by the insurance company
If you are claiming the life insurance policy for the death of the policy owner before the completion of three policy terms then additional documents need to be produced to the insurer:
- A death statement from hospital authority (if the insured was hospitalized before demise)
- Statement from the hospital attendants about the illness and other details about the demise of the deceased.
- A certificate of burial or cremation of the insured
- Death declaration from the employer
In case the death of the insured was caused due to reasons other than illness, documents related to death would be required. For instance,
- If death occurs due to medical causes, doctor’s declaration is necessary.
- If death occurs due to plane crash, certification from the particular airline authorities would be required.
- If death occurs due to murder, accident or suicide, police FIR copy will be neede for Life insurance claim settlement.
- Claim Settlement by the Insurer – As soon as the viable documents are submitted to the insurance company, Life insurance claim settlement process begins. As per IRDA norms once the claim documents are submitted by the claimant, the insurance company has to settle the claim inside 30 days. If further investigations are needed regarding the claim that has to be settled within 6 months from the date of intimation by the claimant.
Once the investigation is complete, claimant needs to fill up a form stating the details of the insurance. Death benefit amount is calculated as the sum of assured amount and revisionary and final bonuses. If loan has been taken, remaining due of loan is subtracted from the total death benefit amount and paid to the nominee through electronic money transfer.
2. Maturity Claim
The lump sum amount received by the policy holder on survival through the term of the policy, at the time of maturity of the insurance plan is called maturity claim. For survival benefit Life insurance claim settlement, the policy owner needs to fill out a discharge form, sent by the insurance company to the insured in advance. The filled in form along with the following documents need to be sent to the insurer:
- Original Documents of the Policy
- Identity Proof
- Age Proof of the Insured
- Assignment Deeds
- Copy of Insured’s Passbook
- A Cancelled Cheque
Once the duly filled discharge form is received along with the documents by the insurer, the Life insurance claim settlement amount is paid to the insured through account payee cheque.
In case, death occurs to the policy holder subsequent to the day of maturity of the policy but before receiving the maturity claim, the amount payable will still be considered as maturity benefit and the maturity amount will be received by the nominee.
3. Rider Claim
The amount paid by the insurer to the insured due to claims made on add-on facilities of life insurance policy is called rider claim. Presenting proper documents is the key to smooth rider claim settlement.
- To claim critical illness and hospital admission rider, doctor’s prescription, medical documents, discharge letter, medical bills, etc are needed to be produced.
- To claim disability rider due to accident, the claimant needs to produce attested FIR copy, documents related to treatment and medication, a declaration certificate from doctor about the disability, etc are needed.