What is the procedure for Life Insurance Claim?
It is perfectly understandable that you may not know how to make a claim against a life insurance policy as it is not exactly something you do on a regular basis. When you are first looking at life insurance plans you usually know exactly why you are making the decision to purchase one, but you are also hoping that you don’t have to make a claim at any time soon. However, if that scenario comes, it makes sense to have a bit of prior knowledge about the usual claim settlement procedures, especially when you consider the circumstances are bound to be stressful anyway. In this article we would provide the procedure for life insurance claim in simple terms.
Also read: Best Life Insurance Company as per IRDA Claim Settlement Ratio of 2019
What is the procedure for Life Insurance Claim – Explain in simple terms?
1) Take your time
One of the most important points to make about claiming on a life policy is that there is never likely to be a time limit involved to register your claim.
This means that you can take your time sorting out all the other aspects associated with this sort of situation, reassured in the knowledge that the vast majority of claims are subsequently paid without any issue and you can get in touch when you feel ready to do so.
2) Preparing documentation
The most relevant and important document that you will be asked to provide is the death certificate.
The basic details you will be asked to provide by the life insurance company will be details of the deceased, evidence of their death in the form of a death certificate, together with the policy number details if you have them.
It is also standard procedure for the insurer to ask what your relationship with the deceased is and whether you are a named beneficiary.
3) What could cause a delay?
The most common reason for a delay in the payout of an insurance policy is when the policyholder dies without leaving a will or any details as to who might be eligible to receive the sum insured or a share of it.
4) Lost policy documents
It is not unusual for life insurance Policy documents to go astray and many people pass away without leaving details of where their documentation is stored or what sort of life cover they had.
If you have access to the person’s financial records you might want to check bank statements to see if regular payments were made to an insurer so that you can identify who to contact.
5) Early payout
The very nature of life insurance is that you are insuring against your death and the policy will normally only pay out when you die.
However, it is perfectly possible to hold a life insurance policy that also pays some or all of the sum insured when the policyholder is diagnosed with a terminal illness.
The idea of terminal illness cover is to provide a cash sum that can be used to pay for medical and care costs if the person is no longer able to look after themselves independently.
6) Submitting documents
Policy document, death certificate of the deceased and relevant Aadhaar/PAN copy, bank statement/cancelled cheque of the nominee need to be submitted to the insurance company. Depending upon the life insurance plans taken by you, the insurance company might ask for additional documents if required.
Also Read: How to calculate your Superannuation Fund?
7) Claim processing
Once you make a claim, it is often the case that the money will be paid within a month of getting in contact with the insurance company.
Knowing how all this works could make the situation less stressful if and when the time comes to make a life insurance claim.
The above process is indicated in simple terms. There could be additional steps depending on the insurance company’s process.
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Team – Myinvestmentideas
What is the procedure for Life Insurance Claim