How to Settle Life Insurance Claims

The simple and timely settlement of a valid claim is an important function of an insurance company.  The parameters to judge an insurance company’s efficiency is to check the past history of settlements of valid claims.  The timely settlement of claims with kindness and fairness shows the maturity of the company and may lead to great satisfaction of the client.  The main job of the company is not only to insure but more than that it is the immense responsibility of the company to honour valid and legal claims, also to identify the fraudulent and invalid claims.

The situation to file a claim may arise in the following conditions:

a) On death of Policyholder before the maturity date.

b) On maturity, i.e. after expiry of the endowment period specified in the policy contract when the policy money becomes payable.

A few points are common to claim all life insurance policies are:

1. Policy must be in force at the time of claims.

2. Insured must be covered by the policy.

3. Nothing was outstanding to the insurer at the time of claim.

4. Claim is covered by the policy.

DEATH CLAIMS

On the event of mishappening, the death of the life assured has to be intimated in writing to the insurer.  This can be done by the nominee or from any person or by agent or development officer.

 Sometimes, the office need not wait till the intimation of claim is received. The concerned agent, newspaper reports in case of accidents or air crashes, obituary columns may give information and claim action can be started. However, the identity of the deceased should be established carefully.

The intimation of the death of the life assured by the claimant should contain the following particulars: (i) his or her relationship with the deceased, (ii) the name of the policyholder, (iii) the number/s of the policy/policies, (iv) the date of death (v) the cause of death and (vi) sum assured etc.

The following documents are required:

(i) Certificate of death. (ii) Proof of age of the life assured (if not already given). (iii) Deeds of assignment / reassignments.       (iv) Policy document. (v) Form of discharge.

If the claim has accrued within three years from the beginning of the policy, the following additional requirements may be called for:

(i) Statement from the hospital if the deceased had been admitted to hospital.

(ii) Certificate of medical attendant of the deceased giving details of his/her last illness.

(iii) Certificate of cremation or burial to be given by a person of known character and responsibility present at the cremation or burial of the body of the deceased.

(iv) Certificate by employer if the deceased was an employee.

Proof of death and other documents to be submitted will depend upon the cause of death and circumstances of each case.

If by any chance policy contract is lost, advertisement of the lost of policy is to be given. Payment can be made on the basis of an indemnity given by the policyholder. If the deceased has taken out policies with more than one branch and the claimant has produced proof of death to any one of them and desires that the other branch or branches, may act on the same proof, his request should be complied with. The Branch requiring proof of death should directly call for the certified copies from the branch concerned.

In the case of ‘in force’ policy unpaid premiums if any due before the Assured’s death with late fee where necessary and the premium falling due in the policy year current at the time of death should be deducted from the claim amount.

MATURITY CLAIMS

If the life insured survives to the full term, amount payable at the time of the maturity includes a sum assured and bonus/incentives.

The insurer sends in advance the intimation to the insured with a blank discharge form for filling various details in it. It is to be returned to the office along with (i) Original Policy document (ii) Age proof if age is not already submitted (iii) Assignment /reassignment, if any.

Legally no claim is acceptable in respect for a lapsed policy or death of the Life assured happening within 3 years from the date of beginning of the policy. However, some concessions are given and payment of claims is made:

(i) If the Life assured had paid at least 3 years' premiums and thereafter if premiums have not been paid, the nominees/life assured get proportionate paid up value.

(ii) In the event of the death of' the Life assured within 3 years and the policy is under the lapsed position, nothing is payable.

Presently, all over the country there are 12 centers where the Insurance Ombudsman has been appointed. They are part of grievance redressal machinery. They consider the complaints regarding disputes related to premiums, claims etc.