We all know how a life insurance plan functions; the beneficiary gets compensated in the event of the policyholder's death. Beneficiaries can claim the assured sum after producing the proof of death of the policyholder. However, what happens when the said person is missing or if there is no proof of death? Fortunately enough, there are certain ways claimants can claim life insurance if the insured or their death proof is missing. We will be covering these tips in this article.
When is the Inusrance Claimed if the Policyholder is Missing?
The process to claim life insurance plans is different if the insured is missing. The person can be missing if he/she is abducted, lost, or is dead and his/her body has not been yet discovered. When the insured person is missing, it becomes difficult to acquire all the documents that are mandatory for the claim. The claim may get rejected if one fails to submit all the necessary documents.
The claims are justified if the beneficiary can give proof of the policyholder's death, but the process can become a bit frustrating in cases where the insured person is missing. In such cases, death cannot get confirmed, and it becomes complex to declare the missing person dead. Thus, the beneficiary must know the claim settlement process to avail the amount they are entitled to.
The general process that the beneficiary has to follow to claim life insurance plans in case the insured person is missing is:
1. File an FIR
First, the beneficiary or any other person who was not in contact with the policyholder should file a missing report to the police.
2. Get verification from the court
A non-traceable report from the police is collected if the person cannot be traced after seven years he/she was reported missing. The report is then submitted to the court to obtain a court order presuming the insured person is dead.
3. Go to the insurance company
After collecting the necessary confirmation from the court, i.e., the death certificate, the beneficiary should contact the insurance company with the declaration of the court. Under the rebuttable presumption of death, the insurance company will have to pay out the assured death benefit proceeds.
Learn 7 tips for a smooth life insurance claim settlement.
According to the Indian Evidence Act, Section 108, the person can be presumed dead if the person is still missing after seven years when the FIR (First Information Report) was filed for the missing person. Seven years is the amount of time that is needed to pass before the court declares the missing person dead. Then, the death certificate can be obtained that is further screened and accepted by the court. After the acquisition of the death certificate, the beneficiary can begin the claim process.
In some situations, the insurance companies may ignore the seven-year clause and proceed with the claims made by the beneficiary as usual. Such cases may arise during natural calamities like cyclones, floods, etc., or any other circumstances like a terrorist attack, air crash, etc., where the body of the person cannot be found. Due to the presence of circumstantial evidence, the court issues a list of missing people presumed dead, and most of the insurance providers consider this list to proceed with the death claim process.
The rebuttable presumption of death implies that if the evidence of the missing person being alive is brought, then the insurance company has the right to take back the proceeds and the interest. And, if the insurance company and the beneficiary of the life insurance plan both had previously agreed on a settlement less than the entire amount, the insurance company has no right to take any amount back.
Options Available to the Beneficiary for Claiming Life Insurance
The beneficiary is often a spouse, family member, or close friend. When the policyholder goes missing, and there is no evidence of his/ her being alive, the beneficiary usually files a death claim with the insurance company. The insurance company may not find the case strong enough to consider that the insured person is dead and may deny the claim; the beneficiary has the following options:
- Request petition the court to declare the missing person (policyholder) as dead.
- Sue insurance company regarding the payment of death benefit of life insurance plan.
If neither of the above options works, the beneficiary has no other choice but to wait until the period of seven years to have the court declare the insured person dies. It is advisory to keep the life insurance plan in force. It implies that the premiums needed to be paid as usual. Because, for the insurance company to pay the assured amount as the death benefit, the policy should be active when the policyholder dies or is declared dead.
If the premiums are not being paid while the insured person is missing, it becomes hard for the beneficiary to claim that the insured person died while the plan was active. If it is found that the insured person died many years ago, the premiums are refunded, which were paid after the actual date of death of the policyholder.
The best thing the beneficiary can do to claim the death benefits is to get in touch with the agent or the insurance company in the process who sold the plan to the policyholder. The agent or the company should be able to provide the information regarding almost everything related. The beneficiary should be acquainted with the information regarding the process and whether the process is an offline or online life insurance plan claim.
The life insurance plan should be structured such that it provides greater benefits to the family of the insured. The process to claim life insurance plans can be rigorous when the insured person is missing, as one has to wait for at most seven years to receive the death benefits. The beneficiary should know the circumstances of the death of the policyholder or the conditions in which the policyholder went missing.