These days, it is vital to have a term insurance plan in order to provide a financially secured future for your family. However, as essential as buying a term life insurance plan is, knowing its claim settlement process is equally important. While you research the different types of life insurance plans, you should check their claim settlement processes as well.
A life insurance claim is a request filed by the beneficiary of the policy to the insurer to the avail death benefit in case of unfortunate events. Your loved ones will file for the claim in your absence. Generally, most insurance providers offer a hassle-free claim settlement process. In this manner, the nominee can file it easily and get insurance coverage without any hindrance.
Have a look at the claim settlement process of the term life insurance plan before zeroing in on any.
Term Life Insurance Claim Process
In general, there are numerous steps involved in filing a claim on a life insurance plan. In case of an untoward event like your unfortunate demise, your loved ones should inform the insurance company immediately. And while filing the claim, it is also essential to keep all the required documents handy. Apart from this, before informing the insurer, your family should keep in mind certain things:
- The term life insurance plan should be effective, and all the premiums have been paid regularly.
- The family should consider the exclusions of the plan.
- The exact situation for which the claim is made must be covered under the policy.
Steps Involved in the Claim Settlement Process
Step 1: As mentioned above, the primary step is to inform the insurer as soon as possible to allow the insurance company to initiate the claim process. Your family can either download the claim form from the insurance provider’s website or get it from the nearest branch office.
Step 2: Keep Important Documents Handy
The documents that your family should keep handy while filing for a term life insurance claim are:
- Age proof of the policyholder
- Death certificate (original and an attested copy issued by the local municipal authority)
- The original policy documents
- And any other documents as per the requirement of the insurance provider or related to the case
- Passport size of the policy beneficiary
- Identity proof like the Adhaar or pan card of the beneficiary
- Medical records
- The last medical attendant certificate by the doctor
- A properly filed claim form
Generally, if the term life insurance claim is filed within the three years of policy initiation, the insurance provider does an extra investigation. It is done so to guarantee that it is a genuine claim. They follow these steps:
- They enquire with the hospital that the deceased person was admitted to the hospital or not.
- In case the demise has been due to any critical illness, the insurance company will ask the hospital to provide all the details, including the doctor’s certificate, medical record, and others.
- If there were an airline crash, the insurance provider would check with the airline to confirm if the policyholder was the passenger of the flight or not.
Step 3: Settlement of Claim
IRDAI (Insurance Regulatory and Development Authority of India) states that the claim should be settled within 30 days. The insurance company should settle the claim after receiving the claim form along with all the essential documents. In case the claim requires some extra investigation, then usually the insurer completes the claim settlement process within six months. It starts from the date of receiving the intimation of the claim.
Before your beneficiary follows through with the process, they should keep some important exclusions and inclusions in mind. The term life insurance coverage applies to both natural and unnatural death.
If the demise occurs because of suicide, the claim settlement may involve a severe investigation. It is essential to note that the policy’s exclusion and inclusion depend on the risk factor of the insured person. Hence, the benefit offered to the non-smokers will differ as compared to a smoker. Usually, most of the benefits offered by life insurance term plans are the same. But the coverage of the policy varies from plan to plan.
Thus, knowing the claim settlement process of an insurance provider is vital. You should note that the higher the insurer’s claim settlement ratio, the more reliable it is to purchase a term life insurance plan. Thus, make sure to check the claim settlement ratio of the insurer you choose.
You can opt for insurance plans from reputable insurance providers and check their website to explore different plans in detail. Remember that getting thorough research done before making a decision ensures you make the right choice!
