Income Protection Claim

Understanding the income protection claim process, documentation, and key features can make it easier for families to access these benefits when needed. Let’s discuss in detail the income protection claim:

What is an Income Protection Claim?

An income protection claim is receiving the monthly income benefit payable to your nominee under the term insurance plan after your demise. Unlike a lump-sum payout, this plan ensures consistent monthly support to your dependents over a fixed period, based on the policy terms. With this term insurance payout your family can take care of their monthly financial needs, pay off any remaining loans, and take care of the child’s higher education expenses.

When Can an Income Protection Claim Be Made?

The nominee can initiate an income protection claim after the unfortunate death of the life assured during the active policy term. The life insurance company will verify the claim details and, once approved, initiate monthly payouts as per the policy schedule.

This plan is specifically beneficial when:

• You are the sole breadwinner of the family.

• Your family depends on your monthly income to manage expenses.

• You want to avoid the risks of mismanaging a large lump-sum benefit.

Documents Required to File an Income Protection Claim

To initiate the claim process, the nominee or legal heir needs to submit the following documents:

• Original policy document

• Death certificate of the life assured (issued by municipal authorities)

• Identity and address proof of the nominee

• Bank account details for monthly transfers

• Claim form (duly filled)

• Medical and hospital records, if death occurred due to illness

• FIR/post-mortem report (in case of accidental death)

What is the Income Protection Claim Process?

• Claim Intimation
  The nominee should inform the insurer about the policyholder’s death via call, email, or online portal.

• Document Submission
  All required documents must be submitted to the insurer for review. This can be done online or offline.

• Claim Assessment
  The insurer evaluates the submitted documents and verifies policy details, cause of death, and nominee information.

• Claim Decision
  Once approved, the insurer initiates monthly income payouts as defined in the policy.

• Regular Payouts Begin
  The nominee receives monthly income directly into the bank account for the agreed duration (e.g., 15 years, 20 years).

Income Protection Claim Support at Policybazaar

Policybazaar provides end-to-end assistance to nominees during the income protection claim process. Here's how we help:

• Dedicated Claim Experts: Our team helps with documentation, submission, and tracking the claim status.

• Faster Resolution: We coordinate directly with insurers to reduce delays and ensure timely payouts.

• No Extra Charges: All term insurance claim support is offered free of cost to Policybazaar customers.

• Dispute Assistance: In case of claim delays or rejection, our team will help escalate and resolve issues.

What are the Key Features of Income Protection Plans?

Here are some important highlights of how income protection term plans work:

• Monthly Income Payout: The nominee receives a fixed monthly amount (e.g., ₹50,000/month) for a pre-decided term, helping maintain their regular lifestyle.

• Long-Term Financial Security: The income protection plans are ideal for families with EMIs, education costs, or ageing parents who need regular financial support.

• Optional Lump-Sum + Income: Here is all that you need to know about term insurance for income protection. Plans allow a combination of a one-time payout and monthly income.

• Customizable Policy Term: Choose payout durations that match your family's financial needs, from 10 years to 40 years or even up to the spouse's retirement age.

• Affordable Premiums: Monthly income benefits can be secured at competitive premiums through leading insurers on Policybazaar.

Who Should Opt for an Income Protection Plan?

An income protection term insurance plan is especially relevant in the following scenarios:

• Young Families: To secure monthly funds for children's education and household expenses.

• Home Loan Borrowers: To cover EMIs through monthly payouts even in your absence.

• Spouses and Parents: To ensure uninterrupted financial support to non-earning family members.

• NRIs with Dependents in India: Offers peace of mind that your family in India will have a regular income if something happens to you abroad.

What are the Tax Benefits of Income Protection Plans?

• Section 80C: Premiums paid towards income protection term plans qualify for a deduction up to ₹1.5 lakh per year.

• Section 80D: Premiums paid towards the health riders added to the base term insurance policy are eligible for tax deductions for up to 75,000.

• Section 10(10D): The nominee's monthly income received as term insurance payout is usually tax-free, subject to prevailing tax laws and policy conditions.

Wrapping it Up!

Filing an income protection claim can feel overwhelming, especially during already stressful times. However, understanding the process, maintaining proper documentation, and acting promptly can ensure a smoother experience. Whether you're self-employed, salaried, or a gig worker, this coverage serves as a vital safety net, helping you focus on recovery while your financial commitments stay protected. If you’re considering income protection or reviewing your current policy, take the time to assess the claim features, waiting period, and payout structure to ensure it aligns with your financial needs.