Term insurance provides an individual with a life cover for a fixed period. During the tenure, if the policyholder loses their life, the nominee will receive the sum assured. When you buy a term plan, it is important to be well-aware of the different components of a term plan. Having the knowledge of the product that you are buying helps you make an informed decision. Term insurance is a financial product that directly affects your and your family’s future. Hence, it is important to know the components of it, including knowing how to file a claim.
The process of claim
There are several steps involved in filing a term insurance claim. There is a step-by-step process involved in filing a claim. The nominee is eligible for a claim if the policyholder has paid the premiums regularly. Also, it is advisable for the policyholder and the nominee to be well-aware of the policy exclusions and inclusions beforehand. In case of the demise of the policyholder, here is how one can go about the claim settlement process-
Inform the insurance company
After the demise of the policyholder, the nominee needs to inform the insurance company as soon as possible. Once the nominee has notified the insurance company, they need to submit documents to begin the claim process. The documents inform the company about the policyholder’s name, policyholder’s date of birth, insurance number, nominee details, cause of death, time of death, and place of death. The nominee can get the claim form online directly from the insurance company’s portal or from the nearest branch of the insurance company.
Documents to keep in handy
Here are the key documents that usually a policyholder needs to keep in handy during the claim process:
- Age proof of the policyholder
- Original policy papers
- Death certificate of the policyholder
- Any other documents specifically asked by the insurance company
If an individual files a claim within three years of when the policy was purchased, the insurance company may carry out an extra investigation. The company would want to ensure that the claim is genuine. Here are the steps an insurance company might take to know the authenticity of the claim:
- The insurance company may reach out to the hospital where the policyholder lost their life.
- In case of any flight crash, the company may check the details with the airline authorities regarding the policyholder.
- In the case of demise due to any critical illness, the insurance company might check the last medical records and doctor’s certificate.
Submission of the required documents
The nominee is required to submit all the essential documents to fasten the term insurance claim process. The documents needed for filing the claim process include:
- Duly filled claim form
- Original documents of the policy
- Original death certificate
- Attested copy of the death certificate issued by the local municipal authority
- Identity proof of the nominee
- Passport-size photo of the nominee
- Medical records of the policyholder
- Last medical attendant certificate by the physician
- Deeds of assignment or re-assignment, if any
- Post-mortem report, if any
Once the nominee has submitted all the required documents, the insurance company will begin the claim settlement process from their end.
According to the Insurance Regulatory and Development Authority of India (IRDAI), the insurance company is required to process the claim within 30 days of when the claim was filed. The deadline begins once the insurance company had received the claim form with all the other required documents. There are some cases where the insurance company may need extra investigation before processing the claim. In such matters, the company is required to process the claim within 6 months from the date they received the claim form and other documents.
Key inclusions and exclusions
When one buys a term plan, life coverage applies to both natural and unnatural death. It is important to be well-aware of the inclusions and exclusions of the term plan, which depend upon the risk factors of the policyholder. All individuals receive most of the benefits of term insurance. However, the policy coverage may vary from one plan to another.
Using a term plan premium calculator will give the policyholder an estimate of the premium that one needs to pay to get their desired coverage. Along with that, one needs to check the claim settlement ratio of the insurance policy that they are planning to purchase. This ratio determines how many claims did the insurance company payout of the overall claims they received.