If someone is the sole bread-earner of a family, then the anxiety of what will happen to the family if any mishap occurs constantly haunts him/her. Term insurances are the perfect solution to this anxiety. They are designed so that after the policyholder's death, their family receives financial assistance in the form of lump-sum money or part payments. However, to get this financial assistance from a term insurance policy, the nominee/beneficiary has to claim. There are different types of term insurance claims and we are discussing these here today.Read more
Every term insurance comes with some benefits. These benefits are selected by the insurance buyers depending on their requirements. A policyholder buys a term insurance policy for a certain period and pays premiums for the decided time so that their family can use up the policy's benefits after his/her death during the policy tenure. However, how does one get these benefits? They can be acquired through different types of term insurance claims.
Suppose the policyholder passes away. In that case, the policyholder’s family has to approach the insurer and file claims to get the policy's rightful benefits. These claims are called term insurance claims. In other words, it can mean the insured asking for the returns of the policy for which they paid the premiums.
There are not one but several benefits that term insurance can offer. However, they serve different purposes, and hence, the claim for each of these benefits is also different. Typically, there are three types of term insurance claims that are common in almost all the term insurance policies available in the market. They are:
It is essential to mention that it's not a compulsion for every policy to offer all of the above benefits, based on which the claims can be made. It depends on the type of insurance bought by the policyholder. For example, some term insurance policies only offer a death benefit, while some only offer maturity benefits with a death benefit.
The rider benefit depends upon if the policyholder had selected any riders in his/her term insurance policy. Then, depending on the range of benefits a policy offers, the premium rates are decided.
Though most people would prefer to get the maximum possible benefits from insurance during claims, it should be kept in mind that claims can be made based on only what the policy can offer.
The main aim of term insurance is to provide financial protection to the policyholder's family after his/her death during the policy term. Therefore, a death benefit in term insurance is the amount of sum assured by the policy that the insured's family or nominee is entitled to get after the policyholder passes away before the completion of the policy tenure.
The death benefit of any term insurance usually includes:
The family can receive the entire amount of the death benefit after they file the death claim, as a lump sum amount or in parts from time to time. It would depend on what method of reimbursement was chosen by the policyholder while buying the policy.
The death benefit in term insurance pays only after the death of the policyholder during the policy tenure. However, what if the policyholder survives the policy term? In this case, the policy has matured, and the policyholder does not receive any maturity benefit upon claiming the insurance. Provided the term insurance policy is of ‘Term Insurance With Return of Premium (TROP)’ type.
This means, if the policyholder has selected a term plan with a return of premium feature, then he/she is entitled to claim his/her paid premiums in the form of maturity benefits if he/she survives the policy term.
However, as a rule, this benefit will be acquired by the insured only if they claim the insurance. Another rule of getting the maturity benefit is that all premiums must have been paid on time in the past.
Riders are additional benefits that are purchased along with the policy. They are valuable benefits focused on specific areas. There are several riders offered by insurance companies, and adding as many as them causes the premium cost to go up. However, they are beneficial, and if chosen wisely based on the requirements, they can prove to be extremely helpful at times of need.
As already said, riders offer benefits that are focused on specific areas. Therefore, they can be claimed when those situations arise in life. They can be claimed during the policy term or after the policy term. An important thing to remember is these benefits are distinct from the death or maturity benefits. Hence, for acquiring them, one has to claim them separately from the death or maturity benefit. Common riders for a term insurance plan are critical illness riders, accidental death riders, waiver of premium riders, etc.
Every official work requires documents. Therefore, the necessary documents for filing different types of term insurance claims are:
The claim settlement is usually a three-step process which is as follows:
Let us look at the most common reasons that why are claims rejected by insurers:
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