Understanding the unpredictability of life, individuals have started to invest in term insurance plans to secure the financial future of their families. The term plan penetration in India is progressively increasing owing to affordable covers and innovative insurance offerings.
Addressing the needs of the quick-paced consumer of today, insurance providers have facilitated seamless online procedures to buy term life insurance policy. This also enables term life insurance comparison, hassle-free renewal premium, and seamless death claim procedures at the click of a button. Understanding the burden of suffering from the loss of a loved one, insurance companies ensure that the death claim settlement process is prompt, effortless, and smooth.
What is claim settlement?
Claim settlement is one of the primary functions of an insurance provider. When you purchase a term plan, you are provided with a life cover for a predetermined term. If during this term something were to happen to the policyholder, the insurance company pays the sum assured to the surviving beneficiaries.
Claim settlement can be defined as a formal request to an insurance provider to provide the decided coverage amount in the unfortunate event of the death of the policyholder. Once the claim settlement process has been completed by the beneficiary, the insurance company is obligated to settle the insurance claim promptly.
The claim is validated by the insurance company before settling the policy. Usually, the claims are issued within 30 days from the application; however, if due to any reason there is a delay in the process, the beneficiaries are notified about it in writing.
There are essentially three types of claim settlements:
- Maturity claims: This is concerned with the maturity benefit of the policy, meaning the compensation offered at the time the policy matures or completes its tenure.
- Death claims: If the policyholder passes away when the policy is still active, then the death claim is paid to the beneficiaries.
- Rider claims: Even top term insurance plans can be strengthened with riders. If you have purchased a term life insurance policy with riders such as accidental death or critical illness, then the beneficiaries may be eligible for an additional cover over the basic sum assured basis of the conditions of the policy.
The Procedure of Death Claim Settlement
The loss of a loved one can be a traumatising experience, and so claim settlement is made easy by insurance companies. Here is a step-by-step guide for insurance claim settlement:
- Step 1: Intimate the insurance company as soon as possible to initiate the claim settlement process. You will be expected to fill out the claim intimation form, which is available online on the website of an insurance company, or it can be secured from the nearest office.
- Step 2: Keep the following information and term plan documents handy for filling out the claim intimation form: policy number, name of the insured, date of death, cause of death, place of death, name of the nominee, etc.
- Step 3: Furnish all the necessary documents for claim settlement.
- Step 4: Submit all the documents to the insurance provider for verification.
- Step 5: Following the regulation issued by the IRDAI (Insurance Regulatory and Development Authority), insurance providers are obligated to settle a claim within 30 days after receipt of the necessary documents.
Documents Required for Claim Settlement
To process a death claim, here are the commonly required documents:
- Duly filled claim intimation form
- Death certificate
- Original forms and term plan documents
- Proof of identity of the beneficiary
- Age proof of the policyholder
- Medical certificate as proof of the cause of death
- Deeds of re-assignment/assignment (if applicable)
Insurance companies the classify death of the insured member under two categories: early death and non-early death – based on when the policy was purchased. It is considered an early death if the policyholder dies within three years of the policy purchase. In such an event, the insurance company may do the following:
- Ascertain with the hospital to determine whether the policyholder was admitted there at the time of death.
- If the death occurred owing to an air crash, they might check with the airline if the insured member had been a passenger.
- Ask for a medical certificate if the death occurred due to medical or unnatural causes.
- If the cause of death was suicide, accident, or murder, then a police FIR and the post-mortem report are asked for.
Why Invest in Term Insurance?
One of the term plan benefits is that it offers a significant cover at a reasonable premium. Therefore, it is often recommended to include a smart term plan in your financial planning so that your family can continue to live comfortably even in your absence. To avail yourself of the term plan benefits, financial advisors suggest buying a term plan early in life. Moreover, buying term insurance online will help you choose from top term insurance plans from home. It is advisable to undertake a term life insurance comparison before you buy one to ensure you select a smart term plan that addresses your needs.
Saral Jeevan Bima from Edelweiss Tokio Life Insurance
The Edelweiss Tokio Saral Jeevan Bima is a standard term insurance plan introduced by the IRDAI that is easy to understand. It is designed to protect your family and comes with customisable options. Here are some benefits of the Edelweiss Tokio term plan:
- Life cover for the financial protection of your family in your absence that covers death due to COVID-19
- Flexibility to choose the policy term and cover
- Customisable premium payment term and mode
- Tax benefits on the premium paid and the sum assured
It is always recommended to be completely transparent in your insurance form for a hassle-free claim settlement procedure. If the insurance provider detects any misinformation, there is a possibility of claim rejection which would leave your family vulnerable in times of trial. It is also advisable to undertake a term life insurance comparison before you buy a policy and check the claim settlement ratio to assess the reliability of the insurance provider.
Chirag Iyer - BFSI Enthusiast
Chirag is a writer and an avid reader who loves to drink coffee! His other interests include boxing, karate, and singing