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As a beneficiary or nominee of a life insurance policy, you must know how much time it will take to settle the death claim. Although there is no time limit for a beneficiary to claim a life insurance policy, it is better to avoid any delay. In some cases, the beneficiaries aren’t even aware that they are nominees of a life insurance policy. What if years have passed since the death of the policyholder and no death claim has been made? Will the beneficiary get the death benefits as promised to the policyholder? The answer is yes.
Although there is no time limit of a beneficiary to make a death claim, there is a time limit that a life insurance company adheres to when a death claim is made.
Let us understand this with an example:
Avijit, a transport business owner, had bought a life insurance policy in the early 90s. His family had to file a death claim on the policy in 2015 when he met with an unfortunate and fatal accident.
His son, Rajendra was 20 years old then and recalls what a difficult time they had to face. The whole process ultimately took more than a month. The claim amount was nonetheless very useful for the family in sustaining the livelihood and business.
Rajendra also bought a life insurance a few years later, once he started to run the business. While researching for a suitable plan he realised things have changed a lot since his father’s days. Now he could buy the best life insurance policy online. Not only that, Rajendra now has the option of claim guarantee with online life insurance plans, especially the term insurance. Life insurance plans with claim guarantee promised to settle the death claim within a short period.
As per the time limits set by the Insurance Regulatory and Development Authority (IRDA) of India, insurers should settle death claim within 30 days. This condition applies to all claims where the insurer does not see the need to investigate the cause of death.
The 30-day count starts once the family submits all the relevant documents related to the death claim. In the case of investigation in the claim, this limit extends to 90 days.
If the insurer cannot settle the claim within this time limit, they will pay interest on the claim amount for the delay.
While the regulator has put the conditions for timely claim settlement, claim guarantee ensures a voluntary claim assurance from the insurer. Claim guarantee applies to life policies which meet the criteria set-up by the insurer.
The claim settlement time limit has come down from 30 days to 24 hours due to claim guarantee. While 24 hours is desirable for all the policies, but at times the claim may take additional time. For such cases, the maximum time to settlement goes up to five working days, especially if the claim amount is large.
For example, if the death claim is within Rs. 1 crore, insurers can settle it within 24 hours. Death claims more than Rs. 1 crore may take a little longer, but in any case, would be settled within five working days.
You should note that the clock starts ticking only after the insurer receives all the relevant documents for the claim.
Following documents are necessary for filing a death claim apart from the claim form:
1. Original Policy Bond
2. Original Death Certificate issued by Municipal Authorities
3. Photo ID and Address proof of the claiming party
4. Cancelled cheque of the claiming party
You may need to file additional documents depending on the conditions of the demise of the policyholder.
Claim guarantee is based on strict underwriting principles and technology-enabled data analysis solutions. Insurers have been consistently investing money and effort into technologies which can improve the efficiency of the underwriting processes.
Insurers now use artificial intelligence and big data analytics to collect user data and create accurate individual risk profiles. All this adds up to policyholder’s risk profile, and at the time of claim, can be verified quickly.
E-insurance account or Electronic Insurance account is another leap towards total digitization of the insurance process. E-insurance account acts for insurance policies just like a d-mat account works for stocks and mutual fund holdings.
You can add all your life insurance policies to your e-insurance account and use it to manage them all from one place. E-insurance account eliminates the need for all paperwork related to policy management.
You also need to assign an authorised representative for your e-insurance account. The authorised representative will be liable to operate your e-insurance account and close it in the case of your demise.
While authorised representative may access the policy details of the account owner, the policy benefits still go to the nominees only.
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