Death is sudden and inevitable. Nobody knows whether there is anything after it or not, but those who are left behind are destined to decide what to do with all the dead person’s accumulated wealth and material possessions that remain. The old saying that what you earn here stays here is for sure true, but for whom is the question that bugs all those who invest and save? Usually, beneficiaries or nominees claim the accounts and investments of those who have passed away, while sometimes, no one wishes or remembers to claim it.
In that case, the question arises as to who is responsible and eligible to have that amount.
If you have a life insurance policy and are worried about what would happen to your holdings, check out this blog for insights.
Key Takeaways
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Lack of awareness is why most finances remain unclaimed after the policyholder’s passing away. Many a time, it is possible that the family members and beneficiaries do not even know the financial holdings of the deceased. Misplaced passbooks, certificates, and policy papers that are essential to claim the account and amount often lead to failed claims. Then, there are cases where the policyholder or the account holder may have entered incorrect nominations or made no nominations at all. In situations where bank and policy providers do not update the contact information of the nominee, upon death, the responsible person appears unreachable, leading to an unclaimed account.
All of the above-mentioned reasons are avoidable, while some are rectifiable if done correctly. Life insurance policies have a huge sum insured, and it becomes the responsibility of the policyholders to stay informed and aware of these matters to confirm that their life savings do not go to waste.
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Each financial institution has its own manner of dealing with the unclaimed accounts after the death of the policyholder. Here’s a brief highlight of the legal procedure.
Almost ₹82,000 crore lie unclaimed in bank accounts, life insurance, mutual funds, and provident funds.
Source: The Economic Times
Eventually, awareness and keeping the close ones informed of your financial prospects is one of the best ways to prevent your account from being frozen upon death. Alert your nominees and beneficiaries of your bank account documents, and if you have any life insurance policy. It ensures they reach out to the institutions on time. There are chances of your account going dormant and funds being transferred to the state.
Choosing an insurer with a strong claim settlement record can provide assurance, especially when it has a settlement ratio of 99.31% for the year 2023-24. This means that out of every 100 claims, 99.31 were successfully processed, ensuring nominees received their full sum insured. To make the claims process smoother and avoid complications, it's wise to inform family members and trusted individuals about your financial arrangements in advance. Taking this step can help ensure that your assets are handled effectively when needed.
If nobody claims or closes the deceased's bank account, it can go dormant, and after the passing of a stipulated period, the state gets hold of all the funds.
The amount and the account are passed on to the nominee or the beneficiary once they file the claim.
Life insurance is a protection that allows your family to claim the sum insured after the death of the policyholder. The best way to claim is to connect with the bank and the policy provider.
Upon notification of the death, the bank freezes the account, and probate is held to settle the estate. Once the heirs and the creditors get the funds, the bank closes the account.
Yes. With the help of relevant documents, such as the death certificate and KYC documents, a nominee can claim the money from the bank account.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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