A term insurance plan claim is a request made to the insurer by the policy’s beneficiary to receive the death benefit in the tragic event that the insured passes away within the policy’s term. Most insurance providers provide a hassle-free claim settlement process for the nominee to file a claim quickly and obtain insurance coverage.
In the event of the policyholder’s passing away, the beneficiary or nominee of the policy must submit a claim for term insurance. The insurance company starts the claim process, verifies the information, and settles the claim. The settlement of a term insurance claim typically takes place within 30 days of the claim being filed.
Let’s look at the term insurance plan’s claim settlement procedure in detail.
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Step-by-step claim procedure for term insurance plans:
The claim settlement process entails several steps, which include:
1. Sharing of the claim details with the insurer –
The beneficiary or dependent (family member) should notify the insurance company immediately if the covered individual passes away untimely. The beneficiary should notify the insurer as soon as feasible so that the insurer can begin the claim procedure.
The name of the policyholder, the insured’s date of birth, the policy number, the cause of death, the name of the nominee, etc., are all necessary to start the claim process.
The claim form may be downloaded from the insurance company’s website or obtained from the closest branch office by the policy’s nominee.
2. Keeping important documents close at hand
The beneficiary should keep a few crucial documents while submitting the claim, like:
- Proof of policyholder’s age
- Certificate of death
- Policy in writing (original).
- Any other records that the insurance provider requests.
When a claim is made within three years of the start of the policy, the insurance company conducts additional research to ensure that it is a legitimate claim. The insurance company may:
- Check with the hospital to see if the deceased person was ever admitted.
- Ask the hospital for information, such as the doctor’s certificate, medical records, etc. if the insured individual passes away due to any critical illness.
- Verify with the airline whether the insured was a passenger if the tragic event occurred due to a flight crash.
3. Submission of the documents needed for the processing of the claim:
The nominee should provide all necessary documentation as soon as possible to expedite the claim settlement process and prevent delays.
The following papers may be required while processing claims:
- Filled out claim form.
- The regional municipal body-issued original death certificate and a certified copy.
- Authentic policy documents.
- A passport-size photo of the nominee.
- Beneficiary identification documents, such as an Aadhaar card, PAN card, passport, etc.
- Any applicable assignment or re-assignment deeds.
- An autopsy report, if one exists.
- Medical records (test results, admission notes, discharge summaries, and death certificates)
- The doctor’s last medical attendant certification
4. Resolution of claim:
The claim must be settled within 30 days, according to the Insurance Regulatory and Development Authority of India (IRDAI).
Even if the claim needs more investigation, the insurance company must finish the claim settlement process within six months of getting written notice of it.
Exclusions and inclusions that can be crucial:
The term insurance plans cover both natural and unexpected casualties. The risk factor of the insured person affects the policy’s exclusions and inclusions. Hence, one must know the specific inclusions and exclusions of the term plan before raising a claim.
Reasons for term insurance claim denial –
If you do not fill out the claim form correctly or do not provide the required paperwork, your term insurance claim may not be allowed. Other grounds for term insurance claim denial include failing to update the nominee’s details and a policy lapse due to unpaid premiums.
Term insurance claims may also be rejected due to information concealments, such as failing to disclose accurate medical history or covering up the use of tobacco or alcohol.
The nominee can also claim term insurance tax benefits such as tax exemption on the death benefit amount as per prevalent tax laws. One is to note that term insurance tax benefits are subject to changes in tax laws.
Consequently, a term insurance policy is essential for safeguarding your family’s financial future. You can choose a term insurance provider who offers hassle-free and online methods of term insurance plan claim processing for ease if and when the time comes to raise a claim.