Life insurance policies by LIC have been some of the most sought after for a long time and a good reason. This market-dominating government-owned entity has built on the trust of its customers through its claim settlement on the death of the life assured. Let's take you through LIC's death claim process, so you can use this as a guide for a hassle-free experience if and when the time comes.Read more
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On the unfortunate occasion that the life assured dies during the policy term, LIC is liable to pay off the death benefit amount once the beneficiary files a death claim with the insurer. If you are a beneficiary of a life insurance policy, you must know about the LIC death claim process and the documentation required to ensure a smooth settlement.
It is noteworthy that LIC, over the years, has introduced new reforms to ensure speedy settlement of death claims. When the COVID pandemic hit the entire nation, LIC came out with relaxations in its death claim process.
You should know that the claim settlement ratio, which implicates the number of death claims settled of the total claims filed, is an important metric to determine the claim settling ability of an insurer. Notably, LIC reported a claim settlement ratio of 98.62% in FY 2020-21.
Considering the enormous implication of settling death claims, LIC has established certain norms to expedite its death claim process. The following sections offer a comprehensive guide on LIC’s death claim process.
On the death of the life assured within the policy term, LIC shall pay out the sum assured on death as stated under the LIC policy. If premium payments were due, the corporation shall deduct the unpaid premiums from the benefit amount. The policy cover ceases as soon as LIC is intimated about the death of the life assured. The most crucial aspect following claim intimation is the final benefit payout (as mentioned above).
IRDA has mandated insurance companies to settle death claims within 30 days of receiving the documents. However, this period may extend based on the type of claim and the investigation required.
Read along to find out how to claim the death benefit amount.
Please note that the full death claim amount is paid to the assigned beneficiaries only in cases wherein premium payments are up-to-date. If not, an amount proportionate to the due premiums is deducted from the death benefit amount.
Note that you may be asked to fill claim form - 3783A if the policy has continued for 3 years and over.
Death claims at LIC are categorized as ‘early’ or ‘non-early’. Early death claims are those wherein the life assured passes away within 3 years of the policy term. All other death claims are classified under the latter category. Based on the type of death claim, the required documents may vary.
On the receipt of intimation of any kind of death claim, the servicing branch calls for the following mandatory submissions:
Claim Form A
Claimant’s statement with details of the deceased and the claimant
Certified extract from death register
Form 3801 - discharge form
Proof of age such as PAN card, Aadhar Card, or both the claimant and the deceased
Evidence of title to the insured’s estate if the policy has not been assigned a nominee
Original policy document
Canceled cheque/copy of passbook
The following forms are required in addition to the ones mentioned above if death occurs before the completion of three policy years from the date of risk commencement or revival.
Claim Form B (medical attendant’s certificate)
Claim Form B1 (to validate the treatment received in a hospital, if any)
Claim form B2 (to be filled by the medical attendant)
Claim Form C (certificate of identity and burial/cremation)
Claim form E (certificate of employment, if any)
Certified copies of
First Information Report
Police Investigation Report (if death occurred as a result of an accident)
LIC requests these additional forms to confirm the legitimacy of the death claim raised. These forms are guarantors of the fact that no information that could affect the claim approval process was withheld.
You are advised to contact the servicing branch of LIC before raising a death claim. The claims committee may call for additional requirements depending on the policy status and nature of death.
The accident benefit rider is add-on protection or extra coverage against accidental death on top of the original life insurance cover. To claim the benefits under this rider, the claimant has to furnish proof of the accident that satisfies the requirements and the policy conditions underlined by LIC. Documents such as the FIR, post-mortem report are usually insisted upon in such cases.
Please refer to the ‘Documents Required’ section above for further details on the kind of documents that will be required for successful death claim settlement.
Certain conditions ply in case of death claims arising out of lapsed policies due to discontinued premium payments. The benefit amount is paid after making deductions of the unpaid premiums plus some interest in the following cases -
The life assured dies within 6 months from the time when the first unpaid premium was due. However, it is only applicable if premiums have been paid in full for 3 years and then subsequently discontinued.
The life assured dies within 12 months from the time when the first unpaid premium was due. However, it is only applicable if premiums have been paid in full for a minimum of 5 years and then subsequently discontinued.
Given the market share LIC occupies in the insurance domain and its expanding customer base, it receives a large number of death claims every year. Only a small fraction of the claims are rejected on grounds of fraudulent suppression of crucial information. Over 98% of the death claims were successfully settled by the corporation in FY 2020-21. The effectiveness of LIC's death claim process ensures that payouts aren't made at the cost of honest policyholders.
In the off chance that an honest claim is rejected, LIC offers its claimants another chance to appeal the claim repudiation. Such appeals are heard by the Review Committees established at the zonal and central offices. If your case holds merit, the committee shall overturn the previous judgment.
Even if the appeal does not lead to the desired outcome, you can report this to the insurance Ombudsman at no extra cost. Any complaints related to the partial or total repudiation of claims or delay in death claim settlements are heard by the Ombudsman.
These extra measures can help you overturn a death claim rejection and get you the assured benefits to secure your future.
Now that you have a good idea of what to expect in the claim settlement process at LIC, you should be able to move through it quickly. Make sure to create copies of the documents for you to keep track of the ones that were submitted. As already discussed, a smooth claim settlement depends on the accuracy and the legitimacy of the material information provided. Both the claimant and a potential life insurance buyer should make sure to not wrongfully withhold important information from your insurer.
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