According to the latest Annual Report for IRDAI, “global direct premiums surpassed the USD 5 trillion mark for the first time ever in 2018.” In the Global insurance market, life insurance and non-life insurance nearly have the same share - life insurance is 55% of the market, while non-life is 45% of the market. In India, the numbers are very different. Of the total premiums paid every year, 73% are paid to fund life insurance plans while the rest are directed to non-life policies.
IRDAI’s Annual Report also noted that in 2019, close to 3 crore new life insurance policies were issued by insurance providers in India. This rise in the purchase of life insurance policies can be attributed to increasingly affordable plans, innovative solutions and groundbreaking technology. Now, with the click of a button, one can browse through various policies, apply for a policy and more.
The process of death claims, too, has been made simple, speedy and completely hassle-free to the policyholder. Insurance providers are tuning in to the wants of policyholders and are understanding the urgent need of an effortless claim process that does not add to the burden of beneficiaries in trying times. To this end, one of the measures has been to simplify and make transparent the documentation process.
Here are some of the documents one would need now to make a death claim:
- Death Certificate: A death certificate is a document released by a registrar that contains verified information about the time, place, and cause of a person's death.
- ID proof of the beneficiary Insurance companies like to see the identity proof of the person claiming for benefits before releasing the money to ensure the funds reach the person nominated by the deceased person.
- Insurance policy papers: The original terms of the insurance policy affect the payout sum, and therefore these papers are required.
- Medical certificate: This may or may not be required, depending on the requirements of your insurance company.
- Postmortem report: This is required in case of an unnatural death. The insurance terms and the payout sums change according to the nature of death - and a post-mortem report can provide the clarity that the insurance companies need to process the claim.
- Hospital records: A death due to an illness is often preceded with hospitalization - in such cases, hospital records are useful to collect the necessary information about the deceased.
- Employer certificate: This certificate is required in the case of an early death. Different insurance companies define early death differently, therefore contact the relevant insurance company and confirm if you need to produce an employer certificate while submitting a death claim.
But, these days, death claims are processed very efficiently - the average claim settlement ratio in India which hovers above 97% is a testament to that. As an under-insured country, it is important for Indians to familiarize themselves with the process of filing life insurance claims.
In addition to understanding the death claims process, in order to make the most of your life insurance policy, it is also crucial that you understand the various benefits associated with it.
Look at the list below for the many benefits of funding a life insurance plan:
- Estate Planning: Life Insurance allows you to divide up your assets among the beneficiaries in the proportion you see fit.
- Replacing Income: If you have dependents, then life insurance can provide them with financial stability in your absence.
- Paying Off Debt:The lump sum payout upon the maturity of a life insurance policy can be used to settle debts - therefore your family can get a fresh financial start.
- Saying A Proper Goodbye: A life insurance payout can help your family arrange for a dignified send-off without worrying about the budget at such a critical juncture.
- Can be a vehicle for investment:Certain Insurance plans, such as ULIPs (Unit Linked Insurance Plans) invest a portion of your premiums towards insurance and the other in investment funds (be it equity, debt or both). They help you grow your wealth even as you build a safety net for your family.
- Can be used as collateral for loans: Certain providers allow life insurance policies to be used as collateral for loans. Thus, life insurance has become a more versatile tool today. It’s traditional function - to provide financial cover in tough times - remains central. But life insurance policies have started offering other benefits too, like easier access to cash during crunch times.
- Tax savings: Under Section 80C, your insurance premiums qualify for tax deductions. Under Section 10(10D) of the Income Tax Act, the payouts upon the maturity of the insurance plan are also exempt from taxes.
Wise financial planning must begin with life insurance. Now that you’re acquainted with the benefits of life insurance, as well as the claim settlement process, you can take the next towards securing your family’s financial future. Life Insurance plans can be a tool for getting risk coverage, for instilling a savings habit, and for growing wealth. The iSelect Star Term Plan from Canara HSBC Oriental Bank of Commerce lets you avail of tax benefits as well as flexible premium payment benefits. You can add greater protection to your plan by opting in for additional riders as well. It’s the right match of convenience and affordability.