Wednesday, October 4, 2023
HomeLife InsuranceHow Life Insurers View Mysterious Death Claims

How Life Insurers View Mysterious Death Claims

A life insurance policy provides death cover to the family of a policyholder. The goal of the policy is to make sure that if the insured passes away during the term of the policy then the family of the policyholder receives the sum assured.

However, the insurance companies make sure that they only pay the sum assured in case of a legitimate claim. If a claim seems mysterious to them for any reason, then the claim can be rejected or delayed.

If you want to avoid your claim to be seen as an insurance claim fraud then it is important that you understand how the process works.

How do Life Insurance Companies Process the Claim Settlement?

To have a successful claim settlement experience, it is important that the nominee makes the insurance claim immediately after the demise of the policyholder. The claim form can be filled online from the insurer’s website. The nominee must provide information regarding the policy number, policyholder’s and nominee’s names, date of death, the reason of death, and place of death.

The death certificate, policyholder’s proof of age, and policy documents are to be submitted with the claim application. Some insurance companies may require additional documents. The information can be found in the policy documents.

It is important that all the documents required for making the claim are submitted with the claim form. Delay in doing so, further postpones the claim settlement. According to the Insurance Regulatory and Development Authority of India (IRDAI) (Protection of Policyholders’ Interests) Regulations, 2002, it is mandatory for the insurance companies in India to settle any claim within 30 days once all the required documents are submitted by the nominee.

However, if there is a requirement for any additional investigation due to insurance claim fraud detection, the insurance company gets an extra period of six months to settle the claim.

In What Cases Insurance Companies Delay the Claim

The rejection or delay in insurance claim settlement can be caused by different factors associated with the life insurance claim. If the policyholder dies due to an accident or murder, or if he or she commits suicide, then the insurance company requires the post mortem report and First Information Report (FIR). This can delay the settlement process.

Another factor that delays the claim settlement is the timing of death. If the policyholder passes away within three years of the policy commencement then the insurers treat it as a suspicious death. In that case, they require more time for an investigation to determine if the claim is genuine or if it is a case of Insurance Fraud. For this investigation, they find out if the policyholder was hospitalized or not. In case of any death due to medical causes, the insurer will ask for the treatment record and a certificate from the doctor. If the insurance claim shows the cause of death as a plane crash then the insurer checks with the airlines to make sure if the insured was a passenger in that flight or not.

When buying online term plan, be sure to check the requirements related to claim settlement. It is important that you follow the necessities closely.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


Most Popular