Let’s indulge in some make-believe. Say, you buy a life insurance policy to protect your family in case of your untimely death. You choose suitable coverage, a reliable nominee and pay all the premiums on time. You think you have done your part and now your family’s future is secure.
But have you ever thought about what happens when an unfortunate event occurs, and you pass away? How will your family receive the insurance money? How long will it take for them to get the money? What if there are any disputes or delays in the process?
People generally forget about this aftermath. Claiming insurance money can be a challenging task, especially when we’re going through a tough time emotionally. This article will be your guide to know all about insurance claims. Let’s begin with the basics.
What is an Insurance Claim?
You must be aware of what life insurance is. If not, you can read here—what is life insurance? If yes, let’s proceed to insurance claims. An insurance claim is usually a formal request made by the policyholder or the nominee to the insurance company for payment of the benefits per the policy’s terms and conditions. In simpler words, you make an insurance claim when you ask for the money you or your family are entitled to receive from the insurer after fulfilling certain criteria.
Insurance claims are of two types—death claim and maturity claim. To understand these better, let’s see two scenarios.
- Suppose you have a life insurance policy, and you pass away during the policy term. In that case, your nominee can claim the sum assured and any other applicable benefits. This is known as a death claim.
- Suppose you have a life insurance policy with maturity benefits and survive until the policy term ends. In that case, you can claim the sum assured and any applicable bonuses or incentives. This is known as a maturity claim.
How Does an Insurance Claim Work?
The process of making an insurance claim depends on the following: type of claim, type of policy, and the insurance company. However, here are some common steps involved in most cases:
Step 1: Claim Registration
The first step is to inform the insurance company about the event that has triggered the claim. In case of a death claim, the nominee must promptly notify the insurer of the policyholder’s death by visiting their nearest branch, calling their customer care number, sending an email, or filling out an online form on their website.
The information that has to be provided at this stage includes:
- Policy number
- Name of the policyholder
- Date of death (or any other event)
- Place of death (or any other event)
- Name of the nominee or claimant
- Cause of death (or any other event)
- Contact details of the nominee or claimant
The insurer will then provide a claim intimation or reference number for further communication.
Step 2: Document Submission
Next, submit the relevant documents required to prove the claim’s validity and verify the policyholder’s identity. The nominee also needs to verify their identity. The documents needed may vary depending on the type of claim, but some of the common ones are:
- Original policy document
- Death certificate (in case of death claim)
- Medical certificate and records (in case of illness or injury)
- Police FIR and post-mortem report (in case of accidental death)
- Proof of age of the policyholder (such as birth certificate or Aadhaar card)
- Proof of identity and address of the nominee or claimant (such as PAN card or Aadhaar card)
- Bank details of the nominee or claimant (such as canceled cheque or passbook)
- Discharge form duly signed by the nominee or claimant
These documents have to be submitted either in person at the insurer’s branch office or through courier or email, depending on the insurer’s instructions.
Step 3: Claim Settlement
The final step is to wait for the insurer to assess and approve your claim. The insurer will cross-check all the documents and information provided by you and check if they match their records and policy terms. They may also conduct some investigations or ask for additional documents or clarifications.
Once the insurer is satisfied with the validity and authenticity of your claim, they will approve it and transfer the claim amount to your bank account. The insurer is legally obliged to pay your claim within 30 days of obtaining all the documents and information from you. However, if they need to conduct any further investigation, they must complete it within six months of receiving your claim intimation.
An insurance claim is a way of getting the money you or your family deserve from your insurance policy. It can be a death claim or a maturity claim, depending on the type of policy and the event that has triggered it. Making an insurance claim involves three steps: claim registration, document submission, and claim settlement. The process can be smooth and hassle-free if you remember some important tips:
- Choose a credible insurer
- Understand your policy’s terms and conditions
- Pay your premiums on time
- Nominate a reliable person
- Keep your documents organized
- Inform your insurer about changes as they happen
- Be honest and transparent with your insurer
- Follow up with your insurer and seek professional help, if needed