How to claim life insurance benefits

MUMBAI: Death comes uninvited, and when it does, other than being emotionally devastating for one’s kin, it brings other problems as well. Typically, when the breadwinner in a family dies, the spouse has very little idea about their financial condition and doesn’t quite know how to go about claiming life insurance.

If the nominee has the original policy, then the claims process can be hastened. If not, then other details like name of the policyholder, policy number or date of issuance of policy need to be given to the insurance company.

This delays the entire process of claiming insurance. Hence, it makes sense to keep your nominee aware of the details of the insurance policy.

Filing a claim

After the policy has been found, the next thing to do is to call up the agent who has sold your spouse the policy. If the agent cannot be found, the insurance company can be approached directly and the nominee can fill up the claims form. In the claims form, the nominee has to specify the date, place and cause of death. Along with this, details of the insurance policy also need to be filled up.

The claims form needs to be accompanied by a set of documents. The most important of the lot is the death certificate, issued by the municipality where the person was buried or cremated. This has to be accompanied by a statement by the doctor(s) who treated the policyholder before death.

In case the death was due to an accident, then a first information report needs to be filed with the police, a copy of which has to be filed along with the claims form.

Along with this, a police inquest report, which has details of the circumstances of the death, and a post-mortem report (if at all it was carried out) also need to be filed.

Also, the nominee needs to prove that he or she is the nominee mentioned in the policy. In this a case, a copy of any photo identity card suffices.

There is no fixed timeframe within which the claim needs to be filed. The only thing that the nominee needs to prove is that the policy was in force when the policyholder died.

What if the premiums haven’t been paid?

What happens if the policy has lapsed, i.e. the policyholder has not paid the premiums? In case of a term insurance, the insurance company does not process the claim.

Term insurance is pure insurance. In term plans, in case of death of the policyholder during the period of the policy, his nominee gets the “sum assured” (commonly known as the cover amount).

And if the policyholder survives the period of the policy, he does not get anything. Term plans have the lowest premium among all the different insurance plans.

In case of insurance policies other than term plan, however, a lenient view is taken, provided the policyholder has paid premiums for three consecutive years before defaulting. After deducting for the premium due and other charges, the proportionate sum assured is paid out.

Insurance companies allow a grace period of 15 days from the date the premium becomes due, for payment of premium. In case the policyholder dies within this period, the policy is still valid and the sum assured is proportionately paid out, after deducting the unpaid premium.