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Know the Claim Settlement Process of a Term Plan Before Zeroing in on One

In today’s day and age, it is imperative to have a term insurance plan in order to provide a financially secured future to the family. However, as important as it is to purchase a term insurance plan, knowing the claim settlement process of a term plan is equally important.  

A term insurance claim is a request filed by the beneficiary of the policy to the insurer in order to avail death benefit in case of the unfortunate demise of the insured during the policy tenure. Most of the insurance companies offer a hassle-free claim settlement process so that the nominee can file a claim and get insurance coverage without any hassle.

Let’s take a look at the claim settlement process of the term insurance plan, before zeroing in on one.

Term Insurance Plan Claim Process

There are various steps involved in the process of filing a claim on a term insurance plan. If the insured person dies an unfortunate death, then the beneficiary or dependent (family member) of the term insurance plan should inform the insurance company immediately. Moreover, while filling the claim, it is also important to keep all the required documents handy. Besides this, before informing the insurance company there certain things that the beneficiary should keep in mind.

  • The term insurance plan should be effective and all the premiums should be paid regularly.
  • The beneficiary of the policy should keep in mind the policy exclusions.
  • The exact situation for which the claim is made should be covered under the policy.

Step by Step Claim Settlement Process of a Term Insurance Plan

Inform the Insurer About the Claim

In order to allow the insurance company to start the claim process, the beneficiary should inform the insurer as soon as possible. The documents that are required for the initiation of the claim are the policyholder’s name, insured’s date of birth, policy number, cause of the death, place of death, name of the nominee, etc. The nominee of the policy can either download the claim form from the insurance company’s website or can get it from the nearest branch office.

Important Documents to Keep Handy

There are some important documents that the beneficiary should keep while filing the claim. These are as following:

    • Age proof of policyholder
    • Death certificate
    • Policy documents (original).
    • Any other documents as per the requirement of the insurance company or related to the case.

In case the claim is filed within the 3 years of policy initiation, the insurance company does extra investigation in order to guarantee that it is a genuine claim. Let’s take a look at it.

      • Enquire with the hospital that the deceased person was admitted in the hospital or not.
      • In case of demise of the insured person due to any critical illness, the insurer will ask the hospital to provide the details such as the doctor’s certificate, medical record, etc.
      • In case the airline's authorities confirm any flight crash then the insurance company check with the airline that whether or not the policyholder was the passenger of the flight.

Submission of the Required Documents for the Claim Processing

In order to fasten the process of the claim settlement and to avoid any type of delay, the nominee should submit all the important documents as soon as possible. The documents that are required at the time of claim processing are:

      • Properly filled claim form.
      • Original death certificate along with attested copy issued by the local municipal authority.
      • Original policy documents.
      • Passport size photograph of the beneficiary.
      • Identity proof of beneficiary such as Aadhaar card, PAN card, passport, etc.
      • Deeds of assignment/re-assignment if any.
      • Post-mortem report, if any.
      • Medical records (test report, admission note, discharge/death summary)
      • Last medical attendant certificate by the physician.

Settlement of Claim

As per the Insurance Regulatory and Development Authority of India (IRDAI), the claim within 30 days. The insurer should settle the claim from the date the nominee submits the claim form along with all the important documents. If the claim requires some extra investigation then it is mandatory for an insurance company to complete the claim settlement process within 6 months from the date of receiving the written intimation of the claim.

Important Exclusions and Inclusions

The insurance coverage of the term plan is applicable to both natural and unnatural death. In case of demise of the insured person by committing suicide, the claim is settled after 1 year of policy initiation. The exclusion and inclusion of the policy depend on the risk factor of the insured person. Thus, the benefit offered to the non-smokers will differ as compared to a smoker. Generally,  most of the benefits offered by term plans are same. However, the coverage of the policy varies from plan to plan.

Wrapping it Up!

Knowing the claim settlement process of an insurance company is very important. The higher the claim settlement ratio of the insurance company is, the more reliable it is to purchase a term insurance plan. Thus, before purchasing a term insurance policy check the claim settlement ratio of the insurance company and keep in mind the process of claim settlement.

While it is important to check the claim settlement ratio of the insurance company, it is equally important to do a proper medical test before purchasing the policy. A medical test gives a clear idea to the insurance company about the health of the policyholder and helps them to determine the premium amount of the policy.

While most of the term insurance policies demand medical tests from the insured, there are many other online term plans without medical tests. This also depends on the age of the policyholder and the sum assured amount chosen by them. Some insurance companies offer online term plans without a medical test if the maximum sum assured of the policy is above Rs.50 lakh.

Written By: PolicyBazaar - Updated: 20 December 2020
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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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