LIC’s claim settlement time depends on the type of claim that is being raised. However, the IRDAI mandates every insurer to attempt to settle all kinds of claims within 30 days from the receipt of requisite documents. It might extend in cases that require further investigations to verify the legitimacy of a claim.
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Claims are the most important aspect of a life insurance policy. Every potential insurance buyer goes in to invest in a policy thinking about the returns and the benefits that their families will be entitled to on his/her death. The funds that insurers are liable to pay on the death of the life assured or on the maturity of the policy help the beneficiaries to sustain their standards of living. A policyholder with multiple dependents must ensure that the claims are successfully settled.
Considering the importance of claims, LIC has emphasized expediting its claim settlement process. The company has established detailed guidelines elaborating on its claims procedure and the requisites for the same.
With the market share that LIC occupies in the life insurance space, it receives a large number of claims every year. Notably, LIC has approved and settled 98.62% of all the death claims received in FY 2020-21.
Both maturity and death claims are settled in no more than 30 days from the date of receipt of all the documents. In case of early death claims or those arising out of accidents are further evaluated and investigated to ensure that the circumstances satisfy the terms and conditions of the policy.
In most cases, wherein the death of the life assured has been fairly straightforward, LIC takes anywhere around 2 days to 2 weeks to settle the claims and transfer the amount. Please note that to be eligible to receive the death benefits, claimants have to file a claim within 120 days from the date of death of the life assured.
Once a claim is filed, LIC is liable to inform the claimants about the required documents within 15 days. Following the receipt of the requested documents, LIC verifies the genuine claims and further processes them. The Insurance Regulatory and Development Authority of India has requested every insurer to settle death claims within 30 days from documents submission. Therefore, once these documents are verified, LIC has a period of 30 days to settle the claim or pay interest based on the delay.
In the case of early death claims, LIC conducts further investigations on-ground which may lead to a delay. In such cases, the IRDAI has accepted relaxations for up to 6 months but no longer. Early death claims are those which are filed within just two to three years of policy issuance.
In the case of money-back plans involving a periodical survival benefit payout, there is no need to raise a claim. You can intimate the company about the same and LIC shall offer these benefits as and when stated in the policy document.
In the case of traditional endowment-based maturity claims, the servicing branch of LIC itself sends out a letter to the life assured, informing them about the date on which the benefits shall be paid. This is done nearly two months before the due date.
If you want to ensure that your claims against policies are settled quickly, you should be mindful of the following aspects:
The documents required by LIC to process any claim are detailed very clearly. These requirements may vary based on the kind of claim that is being raised. The easiest way to ensure no hassles and consequently a quicker settlement is to have all the documents handy.
Maturity claims are mostly initiated by LIC itself. As mentioned above, the company intimates the life assured about the due benefit amount and the date of receiving the amount at least two months prior.
Death claims usually take less than 30 to 30 days to be settled. However, it might extend depending on the kind of investigations required to validate a claim. Death claims should be filed within 120 days from the date of death.
You are advised to not withhold any information that can prove to be vital in the decision-making process of LIC. If found that any information is missing or material facts misrepresented, LIC shall carry out more investigations, leading to significant delays. Moreover, your claim stands the chance to be completely repudiated without benefits if found to have fraudulent intentions.
LIC mostly takes less than 30 days to settle standard death claims. In the case of claims requiring further verification, LIC can take anywhere between 60 days to 6 months, depending on the nature of the death and the number of days of risk under the policy till death.
With a current claim settlement ratio of 98.62%, LIC has established its reliability in terms of its claim settling ability. You should, however, make sure that you adhere to the terms and conditions set forth by the company for a hassle-free experience.