LIC has been spearheading the life insurance domain for a long time now. Customers are drawn to the Corporation owing to its wide-ranging customer-friendly services and its reliability in terms of claim settlement. LIC's early death claim settlement time is one aspect where the company has been making efforts to improve its efficiency. The claim settlement process of any insurer is a determining factor of its reliability. A life insurance policy is bought for the sole purpose of enjoying the assured benefits that come with the plan.Read more
Families of the deceased life assured depend on these benefits to support their future. Insurance companies realize the importance of the death claims process and therefore, have introduced several reforms to improve their claim settlement ratio.
The death claim settlement ratio defines the number of death claims settled by a company of the total number of claims filed. Notably, the Life Insurance Corporation of India reported a death claim settlement ratio of 98.62%, which implies that it has settled over 98 claims for every 100 raised by claimants. LIC has also established a comprehensive claim settlement process to ensure that every legitimate claim gets its due.
On the death of the life assured, the beneficiaries are required to raise a death claim to receive the sum assured on death and other associated benefits. There are essentially two broad categories of death claims. These are:
Early Death Claims arising out of death during the first 3 policy years
Non-early Death Claims arising out of the death of the life assured any time after the first 3 policy years
The following sections discuss early death claims and the settlement time taken by LIC to address such claims.
Early death claims are typically premature claims that are raised by assigned nominees if the death of the life assured has occurred within two to three years from the date of commencement of risk. In the case of early death claims, LIC is obligated to undertake precautionary measures before approving it and processing the benefit amount. This is done to ensure that the claim raised is genuine and fulfills the criteria set forth by LIC.
A particularly important aspect that insurers factor in to eliminate fraudulent intention is the duration of the last illness. Therefore, filing for early death claims in LIC will require you to submit a report from the hospital, certificate of burial, the last medical attendants’ certificate, leave records, etc. These shall be thoroughly examined by a senior official and accounted for by the insurer. LIC may also conduct spot investigations within the claimant’s locality.
The Insurance Regulatory and Development Authority of India (IRDAI) has called for claim settlement within 30 days of receiving all the pre-requisites from the claimants. The timeline applies to all death claims except the ones that need to be investigated and every insurer is expected to adhere to the time limit set by the IRDAI. This measure was undertaken to protect the interests of policyholders.
Note that the 30-days starts only when all the relevant documents related to the proof of death of the deceased policyholder have been submitted by the claimants. However, death claims that require to be investigated to confirm their legitimacy, can take up to 90 days to settle. You should know that if any insurance company takes more than the standard time limit, they are liable to pay interest for the delay.
LIC Early Death Claim Settlement Time
Section 45 of the Insurance Act states that if a death claim is raised within 3 years of policy issuance, the insurer may decide to repudiate the claim. Since early death claims fall under this criteria, LIC may choose to reject the claim on grounds of misrepresentation or suppression of the material fact.
Since this clause calls for investigation, LIC shall ask for additional documents along with the prerequisites within the first 15 days of the receipt of the claim. The insurer is liable to initiate and conclude such an investigation at the earliest, not later than six months from the receipt of the claim request.
If you want to make sure that your early death claim is settled in the least time possible, you should comply with all the requests made by the insurer. The following additional documents may be asked to verify such claims:
a) Medical Attendant’s Certificate
b) Proof of treatment in a hospital - claim form B1
c) Claim form B2, the Medical Attendant who has treated the policyholder should complete this.
d) Claim Form C, which includes Certificate of Identity and burial
e) Claim form E, which is the certificate by the employer
f) Copies of the First Information Report, the Post-mortem report, and Police Investigation Report
Early death claims come with special clauses. However, insurers are required to intimate the claimant about the extra requirements within 15 days of receiving the claim request. Following the receipt, they are obligated to complete all investigations within 30 days. If LIC does not reject an early death claim, then it cannot take more than 6 months to settle such claims.