How To Make Death Claims In Life Insurance Policy

The primary purpose of a life insurance policy is to take care of the loved ones and family in the absence of the breadwinner. Life Insurance helps to replace that income, which was used to run the household of the policyholder. Although no one wants to talk or think about their death, it is absolutely necessary for the nominees to know how to make a death claim in life insurance policy. This article will focus on the steps and procedure to follow when making a claim under life insurance.

The claim procedure for death claims might be slightly different from one life insurer to another. The below-mentioned procedure is the most common practice with all major life insurance companies operating in India.

Procedure to file Death Claims in Life Insurance Policy

The claims procedure in the event of the policyholder’s death under life insurance is as under:

1. Intimation of claim to the life insurance company

It is important for the claimant/nominee to submit a written intimation soon after the death of the life insurance policyholder. Providing notification at the earliest will enable the concerned life insurance company to initiate the process of claim settlement as early as possible.

2. Information in claim intimation form

The basic information pertaining to claim intimation typically comprises of the policy number, date of death, name of the life insured, place of death, the cause of death, the name of the claimant, etc. It is possible to avail the claim settlement form from the closest branch office of the life insurance company. Otherwise, the nominee also has the option to download the same from the life insurance provider’s website.

3. Documentation to submit with the claim intimation form

The following are the documents that are required to be submitted along with the claims form by the nominee

a)    Certificate of Death.

b)    Proof of age of the policyholder if not submitted earlier.

c)    Deeds of assignment or reassignments as and when needed for the purpose of settling the claim.

d)    The original copy of life insurance policy document.

e)    Post mortem report (if the death was unnatural like murder or accident)

f)    Police FIR (if the death was unnatural like murder or accident)

g)    All other documents as asked for by the life insurance company.

In case of early death claim, wherein the demise of the policyholder takes place within three years from the date of commencement of the policy, these additional requirements may be called for:

a)    Statement released by the hospital in case hospitalization was needed for the deceased.

b)    Certificate from the medical attendant giving details of the insured person’s last illness.

c)    Certificate of burial or cremation provided by an individual of responsibility and known character.

d)    Certificate by the employer of the company wherein the insured person was working before his or her death.

Death claim in the filling of special cases like air cash, murder or any other special cases will be treated differently as per the rules and regulations pertaining to each case.

Submission of extra documents to support the claim processing:

Life Insurance Company may ask for extra documents as and when needed. It is important to submit the required documents to facilitate smooth and quick processing of death claim.

4. Settlement of Claim

According to the regulation 8 of IRDA’s Regulations, 2002, the life insurance company has to settle the claim within a period of 30 days from the date of receiving all the required documents, which can include documentation for any clarifications as sought for by the life insurance company. In case any further investigation is needed, the insurance company is required to complete the entire process within a period of six months from the date of receipt of the written intimation of the claim.

5. Amount of Claim

Once the requisite documents are received by the life insurance provider (including all information about the bonus, nomination, policy, assignment etc.) the same is referenced to the Policy Ledger Sheet. For the sake of calculation of the sum assured under the claim, the outstanding loan amount and the interest amount, if any, is deducted to calculate the net payable claim sum. Normally, the death benefit claim payments are made via electronic fund transfer.

Important points to note

1. Any relative of the life insured can make claim intimation even though he or she is not a nominee in the life insurance policy. Although the sum insured or the death benefit amount will only be received by the nominee mentioned in the policy.
2. If there is a claim in Unit Linked Insurance Plan then the death benefit amount will be equivalent to the sum assured or the present-day fund value, whichever is higher.
3. If the nominee also dies with the life insured (for example in case of a road accident) then the death claim will be paid out to the next in line legal heir.
4. If the nominee passes away before the death of the life insured then life insured can change the nominee in the life insurance policy. Change of nominee can be done online as well from the official website of the insurer.

Exclusions of Life Insurance Policy

Sometimes the life insurance policy may reject a death claim if the cause or circumstances of the death fall in the list of exclusions. Let’s see some of the common exclusions in a life insurance policy

Suicide

If the life insured commits suicide within the first year from the date of commencement of policy then the death benefit may be rejected by the life insurance company. In such a case the life insurance company will only refund the number of the premiums paid by the policyholder to the nominee mentioned in the policy.

Incorrect information in the policy

If the policyholder finds out that the policyholder had given wrong information when buying the life insurance policy, it can be the reason to reject the death claim. Any wrong information or misrepresentation in the life insurance policy will be taken as a case of fraud and will result in rejection of the death claim.

For full details on the exclusions of the life insurance, do read the policy document carefully before buying the life insurance policy. The main purpose of the life insurance policy is to protect your loved ones in your absence. Hence it is very important to have complete and accurate knowledge of the procedure of death claim in the life insurance policy.