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How to Claim a Life Insurance if the Policyholder is Missing?

dateKnowledge Centre Team dateApril 29, 2021 views321 Views
How to Claim a Life Insurance if the Policyholder is Missing?

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.

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Frequently Asked Questions (FAQs) for Life Insurance

The premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age:It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chances of contracting diseases is low. Young people also opt for policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender:The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits:The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term:Policy terms are also taken into consideration by insurers while deciding the premium amount. Policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation:The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physicianâ s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence. There are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: An insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the policy, the insurance companies generally pay 80% of the total premiums paid.

Buying life insurance online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. Online insurance policies also offer higher benefits. Customers should, however, buy online policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one policy to increase the cover or avoid claim rejection. In case of multiple policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In the case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy life insurance, the insurance company asks for the nominee details. Only the person named as the nominee in the policy can cash out a life insurance policy in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in the case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term. The family receives the death benefit. In the case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment options are chosen the policy works as a source of regular income.

It is a popular misconception that life insurance is only for accidental deaths. A term life insurance plan like iSelect also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy life insurance in your early 20s because it’s is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy life insurance at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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