How to Claim Term Insurance After Death?

A policyholder purchases a term insurance plan to get life cover and ensure his/her family is financially protected in the unfortunate event of his/her passing away during the policy tenure. To ensure the nominee takes the right steps to claim term insurance after the death of the policyholder, proper knowledge of the claim process is required.

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Fortunately, the process is straightforward and understandable. As a nominee, you will find out about how to claim term insurance after death in this article. 

How to Claim Term Insurance After Death?

Below you will find a step-by-step approach to claiming the sum assured of the policyholder as a nominee. 

  1. Step 1

    You must inform the insurance provider as soon as possible about the death of the policyholder to process your claim quickly. After filling in all details, you can pick up a claim form from the nearest branch of the insurer. You can also go to their website and download the claim form.

  2. Step 2

    It is important to keep certain documents with you to ensure that your claim is filed in the fastest and most efficient manner possible. These documents are typically required by the insurer from which you seek the claim. In general, they would include the death certificate of the policyholder and the original policy documents.

  3. Step 3

    The insurer will usually investigate the circumstances of the policyholder's death if you file a claim within three years from the date of policy issuance. The hospital will have to provide the insurer with the policyholder's medical records if the death was due to a serious illness. On the other hand, you would need to submit the FIR as well as a post mortem report if the policyholder died from suicide or murder.

    The Insurance Regulatory and Development Authority of India (IRDAI), requires all insurers to pay death claims within 30 calendar days. The duration begins from the date that the nominee of the policyholder submits all required documents and clarification. 

    The insurer can conduct an additional investigation if there is a need to do so within 60-90 days after receiving the claim notification. If the claim cannot be settled within 30 days, the Insurer will have to pay penal interest.

Documents Needed to File Term Insurance Claim

You need to submit the below-mentioned documents to make a term insurance claim. These are:

  • Any work of assignments or reassignments
  • A duly filled claim intimation form
  • Bank account proof of Nominee
  • All original term policy documents
  • All medical records
  • The attested & original copy of the policyholder's death certificate.
  • death certificate of the policyholder.
  • Nominee documents like photo ID proof and Address proof

Factors to Keep in Mind Before Submitting Term Insurance Claim

You must know all the details about claiming the sum assured. Make sure you understand the below-mentioned factors before filing the claim:

  • Before you file a claim for term insurance, make sure that the circumstances under which the policyholder died are covered under the policy's terms and conditions. For many reasons, claims for term insurance in India can be rejected. Before you file a claim, make sure to review the policy terms. A term insurance claim may be denied if the policyholder is not aware of its expiry or if he/she had not disclosed any medical information or lifestyle details that could have led to higher premiums or even their death.
  • You must ensure that your claim form and the information in the term policy documents are accurate. You should carefully check these details as if they do not match your claim, you may be charged with fraud, and the claim will be denied.
  • Check that the reason for the policyholder's passing was not exempted from the term policy before you file a claim. An exclusion could include death from a pre-existing condition, death from alcohol or drug abuse, and any hazardous activities.

Important Conditions in Term Insurance Claim Process

The nominees must understand the inclusions and exclusions of insurance policies before they can begin the claim process. 

  • The term plan covers death benefits for both natural and unnatural causes. Depending on the cause, certain clauses may be applicable. 
  • For instance, only a few insurance companies pay the suicide death benefit or return the premium for deaths that occur within one year of the policy's initiation. The majority of insurers only return a small percentage of the premium.
  • The Insurance industry operates on risk assessment. The policyholder's risk level determines the death benefit. High-risk policyholders, such as those who smoke or drink alcohol, receive different benefits than those who don't have such a habit. Each insurance company has its own rules, and they differ from other insurers. 
  • Checking the policy document is the best way to find out about specific exclusions and inclusions for the policyholder's term plan. To obtain the information, the nominee can also contact the insurer's customer service line. Once the nominee has the information, he/she can proceed towards claiming the amount accordingly.

Tips to Apply for a Claim Smartly

Online term plans allow you to easily manage your policy and submit a claim in a couple of minutes. To ensure your claim is approved, you need to take certain steps. If you are the policyholder, educating your family and yourself about the claims process is important. 

Unfortunately, you won't be there when the insurance claim is filed. You should inform your nominees about all information regarding the policy. This includes details about the policy, including the claim process, sum assured terms and conditions, and any other aspects.

It is also crucial to mention any add-on riders with the nominee and educate them of the same. The last thing you would want is your family denied any benefits because they didn't know it existed in the first place.

Final Word

Filing a term insurance claim after the policyholder's unfortunate demise requires the nominee to have full information about the process. Improperly filled applications or missing any steps can not only lead to claim rejection but the nominee can also be booked for fraud. So, make sure you properly understand how to claim term Insurance after death and take the right steps to claim their policyholder's sum assured.

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