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How to Claim Life Insurance

TeamAckoNov 28, 2024

Life is full of twists and turns; the unexpected can knock at anyone's door without warning. This is why Life Insurance exists: to give financial security or protection in case unwanted knocks arrive. If a person leaves this world, a Life Insurance Policy turns into their lifeline, as people can claim that policy to obtain the Death Benefit, a kind of payment intended to let them carry on.

However, filing a Life Insurance Claim need not be like navigating a storm in the middle of a hurricane. Knowing the ins and outs of the Insurance Claim Process makes all the difference. As the saying goes, "Forewarned is forearmed." In this article, you’ll learn claim meaning in insurance, its process, and the documents required for filing Life Insurance Claims in India so you can navigate the road ahead feeling prepared.

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Contents

What is Claim in Insurance?
Types of Claims in Life Insurance
- Death Claims:
Claim Against Add-ons/Riders
Importance of Submitting the Right Claim Documents
6 Reasons Why an Insurance Company May Reject Your Claim
Role of Beneficiaries in Life Insurance Claims
Frequently Asked Questions

What is Claim in Insurance?

A claim refers to an official request filed with your insurance firm claiming a payout regarding a covered event. The implication of life insurance can sometimes be getting access to a payout for the death benefit after the insured dies. The process of filing claims to insurance varies according to kind or type and by provider company.

Understand how to file a claim in case of death in an insurance policy by going through the death claim rules. Knowing which forms to submit, the maturity claim form or discharge form, and the due date to submit a death claim can save much time.

Types of Claims in Life Insurance

There are three main types of Life Insurance claims:

Maturity Claims
Death Claims
Claim Against Riders

Beneficiaries will receive life insurance payouts in the case of the policyholder's untimely demise. Here is a list of claims one can make under Life Insurance.

Maturity & Survival Claims: The insurance company will make a final payment to the policyholder on the policy's maturity date. Bonuses and incentives are added to the sum assured to determine the final payout amount. The insurance company sends out a bank discharge form to the policyholder. When returning such a form to the insurer, do not forget to affix these documents:

A government-issued photo ID
Original policy document
Policyholder's bank account information (a bank statement or a cancelled check)
Completed Policy Discharge Form

Death Claims:

Here are the steps to file a life insurance death claims process.

Step 1: Written claim intimation

The beneficiary must immediately inform the insurer of the claim, including the insured's name, policy number, death site, date, and claimant's name. The beneficiary can obtain a claim notification form by contacting the insurance company directly, submitting an online request, or visiting any of the insurer's local offices. The beneficiary must provide the following details.

Their full name
Policy number
The deceased insured's full name
The date and location of death
The reason for death in the claim intimation

You can get a claim notification form from your insurance agent or advisor or visit your local insurance agency. You should also check your insurance company's website to see if the claim intimation form is available for download.

Step 2: Submit a claim form by filling it out

In the event of your untimely demise, your insurance provider would most likely ask for the following paperwork. Documents required for a policyholder's natural death include the following.

The original policy.
A copy of the death certificate.
A fully completed and signed claim form.
Any practical assignments.

In the event of an accident

Hospital certificate
Post-mortem report
Medical records of the deceased, including test results, discharge summaries, etc.
Original or copy of the FIR
Other documents (as asked by the insurance provider)

Death due to a medical condition

Completed and signed claim form original policy documents
Nominee's bank account details (such as a bank statement or cancelled check)
Local authority-issued death certificate
Medical records
Statements from the treating physician and the attending physician.

All paperwork should be filed to settle the claim smoothly. All documents, including the death certificate, proof of the insured person's age, an original policy, and every other document the insurer might need from the nominee. Once the insurance company receives that, they are entitled to 30 days to decide on the claim. However, at times, an investigation is needed and may take up to six months from when they received the written notice of claim.

Claim Against Add-ons/Riders

Insurance Riders can be added to a Standard Life Insurance Policy to increase coverage. A claim process depends on the rider in question. For example, medical history documentation, including a record of the first diagnosis, a report from a doctor, etc., is required for the Critical Illness Rider. A copy of the police report, a certificate of disability signed by the attending physician, medical information, etc., are all necessary for the accidental disability rider.

A rider is a supplementary policy available with Life Insurance while paying an extra premium. Life Insurance, in turn, is followed by several types: Critical Illness Insurance, Accident Insurance, Hospital Bill Insurance, Premium Waivers, etc.

Filing for Death Claims includes Riders attached to the policy with claims of the kind on the Accidental Death Benefit Rider or Premium Waivers. You would file all required documents with a copy of the policy and a completed Claim Form, which ensures a settlement of the claim done without complications.

Importance of Submitting the Right Claim Documents

Submission of proper documents is essential in making a Life Insurance Claim, as it directly impacts the processing speed and accuracy of the insurance claim. Incomplete or incorrect documents can delay the process, causing undue stress to the beneficiaries, who are already struggling. Proper documentation will help the insurer verify the claim faster, ensuring a smoother settlement and timely Life Insurance coverage for the policyholder's loved ones. And here's why paperwork is important:

Why Accurate Documentation Matters:

Speeds Up the Claim Process
Prevents Unnecessary Delays
Ensures Compliance with Rules
Reduces the Risk of Disputes
Provides Financial Security on Time

6 Reasons Why an Insurance Company May Reject Your Claim

There are common problems that could cause your claim to be rejected. Awareness of these issues can help you prevent them and ensure your claim process goes more smoothly. The following are some of the most typical explanations for claim rejection.

Incomplete Application

Details like age, income, occupation, credentials, lifestyle (smoking/drinking), and information on previous policies and statements must be filled out accurately and completely. Policy benefits can be cancelled if false or missing info is submitted to the insurer.

Medical Records Confidentiality

Insurance premiums are affected by the patient's disclosure of current and past medical conditions, treatments, operations, etc. When estimating insurance costs online, many sites require you to submit personal information, including whether or not you smoke. Family members need to communicate their medical histories to avoid having life insurance claims denied due to a preexisting condition.

Keeping Coverage a Secret

When applying for a new policy, you must disclose all your current insurance plans. People often omit these specifics because digging through ancient records to discover the information is a hassle. Insurance claims could be dismissed if evidence supporting the claim is hidden.

Failure to Update Nominee Data

In the event of the insured's or policyholder's death, benefits will be paid to the designated beneficiary or nominee. Therefore, updating the insurance company on the nominee's information is crucial. A life insurance claim can only be allowed if the policyholder has accomplished this very important thing.

Claims Against Exclusions

Insurance policies typically include a list of exclusions detailing the circumstances in which benefits will not be paid. Therefore, a claim will be denied if submitted for a condition listed in the 'exclusion' section of the policy.

Submitting False Information

A claim found to be false or inflated will be denied. In addition, there may be legal repercussions and a higher cost associated with the fraud investigation. The insurance company must be notified immediately if an accident has occurred. However, the insurance company may deny coverage if the claimant delays filing their claim and fails to provide all required paperwork by the deadline.

Role of Beneficiaries in Life Insurance Claims

Beneficiaries are the most important part of the life insurance claim process. They will receive the death claim payout, which could be either a lump sum or in instalments. The right beneficiary designation and understanding of policy details, such as exclusions, prevent delay. Proper records ensure no dispute and proper submission of forms such as the death claim form provides a smooth claim settlement within death claim rules.

Key Take-A-Ways

Beneficiary Role: The beneficiaries will receive and process the death claim payout.
Accurate Beneficiary Designation: Failure to designate beneficiaries will increase the duration of the insurance claim processing.
Awareness of the Policy: The beneficiaries must be informed about policy terms concerning exclusions and claim limitations.
Avoid Conflicts: The right documentation of the deceased's wishes can prevent claims conflicts over an insurance policy.
Payout Methods: The beneficiaries are offered a single or instalment payout to produce a steady income.

Frequently Asked Questions

Here are some common questions about life insurance claim process and documents.

Which documents do I need for a death claim?

File a death claim by furnishing the claimant's statement, original policy, death certificate, FIR if the death is accident-related, medical records if it is illness-related, and discharge form for a smooth claim settlement.

How long does it take to get a life insurance claim settled?

Generally, the insurance claims take approximately 14 to 60 days, but it will depend on the causes of death and policy claim insurance documentation. It may take some extra time for insurance due to further verification processes.

What is the deadline to file a life insurance claim?

From a few weeks to even a few months. However, on-time application submission will lead to a fast settlement of the claim in India.

How do I file a life insurance claim?

To file an insurance claim, contact your insurer for their specific insurance claim process. Fill out the death claim form and submit other necessary documents, such as the policy and death certificate.

What happens after I submit the claim documents?

The insurer will scrutinise your insurance claim documents and may demand more paperwork to hasten the claim settlement per death claim rules.

Can the insurance company reject my claim?

Yes, insurance claims can be denied in case of wrong documentation or failure to follow the rules of a death claim. However, proper preparation would limit the risk of denial.

How do I appeal a life insurance claim denial?

Yes, you can appeal the denial of an insurance claim by filling up the gaps in your claim process and ensuring that all information regarding claims in the insurance documents is accurate.

Are life insurance proceeds taxable?

No, death claim proceeds from life insurance are usually tax-free; thus, the option of insurance claims seems financially safe for the beneficiaries.

Do I need an attorney to help me with a life insurance claim?

While consulting a lawyer is unnecessary, you may seek help if you feel unsure about navigating the insurance claim process, but it's often straightforward with complete claims in insurance documentation.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet and is subject to changes.