Every individual needs a life insurance policy in order to secure their family members from the financial impact of an unfortunate demise within the policy period. That is the core premise of life insurance, i.e., life coverage in return for timely premium payments throughout the entire policy tenure. In case of the policyholder’s death within this period, the insurer will pay out the sum assured (pre-fixed) to their nominees. This naturally covers risks arising from the loss of the income of the policyholder and also helps family members repay debts, cover lifestyle expenses, and meet future goals.
However, filing a claim for life insurance policy proceeds is a procedure that requires careful attention on the part of the nominees. Whenever a nominee of the policyholder files a death claim, there are a few steps that should be kept in mind. These are outlined for your convenience in this article. In this context, it should be mentioned that policyholders should always update their nominee details as required by the insurance company. Choosing a nominee is integral to the whole process, while the policyholder can also change nominees or beneficiaries anytime throughout the policy tenure. At the same time, policyholders can also designate multiple beneficiaries for the policy proceeds.
Steps To File Life Insurance Claims
Here are the steps that have to be followed for filing a claim for a life insurance policy in the event of the policyholder’s untimely demise:
- Informing the Insurance Agent- If the policy was purchased from an insurance agent, the nominees should inform the individual about the unfortunate event. The agent will assist the family members with the entire process of filing claims along with documentation and other formalities.
- Intimating the Company- The nominee should inform the insurance company about the demise of the insured individual at the earliest. The claim intimation for the life insurance policy should have information like the place, cause, and date of death. Notifying the insurance company swiftly is always recommended for a smooth claim filing procedure. While there is no fixed time limit or deadline for filing life insurance claims, it is always best to do it as early as possible. The insurance company may investigate the reasons behind delayed filing of claims in such cases. At the same time, it is important to remember that insurance companies may take several weeks to process and disburse claims after verifying all necessary details. Hence early filing is always the recommended course of action in this regard.
- Claim Filing and Form- The nominee should file the claim by calling the helpline number of the insurance company or by dispatching an email to the given email address in this regard. Upon the intimation being made, the insurance company will record these details and ask the nominee to fill up the requisite form and submit it along with several other documents.
- Documentation- The nominees have to arrange for necessary documents, including the death certificate, deed of assignment if applicable, the original life insurance policy document, discharge form, and so on. If the nomination has not been made by the policyholder, then the claimant has to furnish proof of legal entitlement toward making a claim. Claimants should also ensure error-free forms with all information provided as per the insurer’s requirements.
- Claims Procedure- The insurer will verify the claim first and may also ask for more documents. The claim assistance team reviews all forms and documents, along with the claimant’s statements. If the insurance company is satisfied with the claim’s authenticity, it will notify the nominee likewise. The death benefit or sum assured will be disbursed accordingly. However, if the claim is found to be false by the insurance company, the payout may not be processed. Nominees should avoid waiting for a long time after the policyholder’s demise to file an insurance claim. They should also provide all necessary documents without any mistakes.
It should be noted that the claim may be intimidated by any relative of an insured individual, even if they are not the assignee or nominee. This is a crucial aspect that nominees should keep in mind. Secondly, for ULIPs (unit-linked insurance) plans, the insurance company may pay the pre-agreed sum assured or the fund value, whichever is higher (depending on the type of ULIP).
Hence, it is always advisable that nominees adhere to the claims process outlined by the insurance company in the life insurance policy document and the website. They can also reach out to insurers about updated lists of documents needed for filing death claims. At the same time, it is necessary to be extra careful while filling up the form and providing all the required documents. The policyholder can ensure a smoother procedure for their nominees at the outset by choosing an insurance company with a good claim settlement ratio (ratio of claims settled to the total number of claims received in a particular period) and a relatively hassle-free claim-filing process.