Imagine a scenario in which you have diligently purchased a term insurance policy to secure the financial future of your loved ones. You have paid your premiums on time, ensuring your family is protected in case of any unfortunate event. But what happens when the unexpected occurs and you are no longer there to support your family? This is where the importance of claiming your term insurance policy comes into play.
What is Term Insurance?
In this section, you will find the answer to the question of what is term insurance and the importance of making a claim. Term insurance is a life insurance plan that provides a death benefit to the policyholder’s beneficiaries in the event of their demise during the policy duration. However, your family needs to raise a claim to avail the sum assured. Read the step-by-step process of claiming a term insurance policy after the policyholder’s death.
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 to initiate the process as soon to claim the settlement. You will be expected to fill out the claim intimation form, which is available online on an insurance company’s website, 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 must settle a claim within 30 days after receipt of the necessary documents.
What is the Purpose of Your Claim?
There are essentially three reasons for claim settlements:
Maturity claims: This is concerned with the maturity benefit of the policy, meaning the compensation offered when the policy matures or completes its tenure.
Death claims: If the policyholder passes away when the policy is still active, 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.
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.
Types of Deaths Covered by Term Insurance Plans
Not all types of deaths are covered under term insurance plans. The exact list of covered deaths may vary depending on your policy’s terms and conditions. Here is a general overview:
Deaths Covered Under Term Insurance Plans
Below is a list of the possible scenarios:
- Natural death/medical condition
- Accidental death
- Deaths due to pre-existing diseases (declared at the time of buying the policy)
- Deaths due to critical illness
- Health-related death
- Deaths due to COVID-19
- Death by suicide
Deaths Not Covered Under Term Insurance Plans
Below is a list of the possible scenarios:
- Death due to indulging in illegal activity
- Deaths due to pre-existing diseases (not declared at the time of buying the policy)
- Death due to driving under the influence of alcohol/drugs
- Self-inflicted injuries
- Death due to suicide
- Death due to indulging in hazardous activities
- Death due to taking part in adventurous sports (if not informed while purchasing the policy or don’t have a respective add-on)
- Death due to childbirth or complications in pregnancy
- Death due to sexually transmitted diseases (like HIV)
- Death due to intoxication
- Natural disaster
Common Reasons for Insurance Claims to Get Rejected
While it is essential to claim on your term insurance policy, certain reasons may lead to claim rejection. Here are some common ones:
Contradicting information: Providing inconsistent or contradictory details can raise doubts about the claim’s authenticity.
Falsifying Information: Deliberately providing false information or withholding relevant facts can lead to claim rejection.
Delay in premium payment: Failing to pay premiums on time can result in policy lapses and subsequent claim rejections.
No mention of nominee: Not assigning a nominee or updating nominee information can complicate the claim settlement process.
Undisclosed medical records: Failure to disclose accurate medical history and pre-existing conditions can result in claim denial.
Undisclosed previous/existing insurance policies: Hiding information about other life insurance policies can lead to claim rejection.
Lapsed policy: If your policy has lapsed due to non-payment of premiums, your claim may be denied.
Conclusion
In conclusion, claiming your term insurance policy is essential to securing your family’s financial future. By following the step-by-step process outlined above and ensuring all necessary documents are submitted, you can ensure a smooth and successful claim settlement. Remember, each insurer may have slightly different requirements, so you must familiarise yourself with their specific guidelines.
