The primary purpose of buying a life insurance policy is to create a financial safety net for your loved ones against life's uncertainties. As a policy buyer, you must focus on selecting the right life insurance policy from an insurance company with a high claim settlement ratio (CSR). An insurer who has a CSR closer to 100% and a streamlined claim settlement process can help ensure timely and hassle-free settlement of a valid insurance claim. Here's how the claim settlement for life insurance policies works.
Step 1: Intimation of the Claim to the Insurance Company
It is the responsibility of the nominee to inform the insurance company about the demise of the life insured (or life insurance policyholder) as soon as possible. This way, the insurance company can initiate the claim process. The mandatory details for life insurance claim intimation are the policy number, date of death, name of the insured, place of death, cause of death, and name of the nominee. The claim intimation form can be easily obtained either online from the insurance company's website or offline – from the nearest branch of the insurance company.
Step 2: Documents required
The insurance company may ask the nominee to provide the following documents to support their claim intimation:
Step Three: Claim Settlement
According to Regulation 8 of the IRDAI (Policy holder's Interest) Regulations, 2002, the insurance company must settle a life insurance claim within 30 days of receiving all necessary documents, including any additional ones sought by the insurer. In case the life insurance claim requires further investigation, the insurance company must complete its procedures within six months of getting the claim intimation in writing.
Process for Maturity and Survival Claims
Upon surviving the life insurance policy tenure, the insurance company pays a specific amount of money as maturity benefit to the policyholder. The maturity payment received consists of a sum assured plus any additional incentives.
Before the expiration of the policy tenure, the insurance company informs the policyholder in advance. The policyholder receives a bank discharge form for filling details in it. Subsequently, the form must be filled and returned to the insurance company, along with ID proof, the original policy document, a canceled cheque, and a copy of the bank passbook.