How to file a claim for term insurance in India

Term insurance is one of the best security blankets you can provide your family in your absence. The ‘sum assured’ received in the policyholder’s unfortunate death can be used to maintain the dependent’s lifestyle or meet any obligations in the future. However, the benefits of term insurance are realized only when claims are filed correctly and efficiently.

While it is often difficult to cope with the loss of a loved one, having a secured financial cover like term insurance is crucial for beneficiaries to navigate this challenging time. This blog takes a step-by-step approach explaining how to claim term insurance and ensure that all the term insurance benefits are duly received.

Steps to file a term insurance claim

Here are a few steps the beneficiaries should take while making a term insurance claim:

1. You must send an immediate notification to the insurance company about the death of the policyholder. Providing a prompt notification helps avoid delays in the claim process. Generally, a time frame of around 30 days of the death is recommended.
2. Once you have intimated the insurance company, fill out the claim form, which can be accessed directly from the insurer’s website or manually obtained from its local office.
3. Please provide all the necessary documents and the claims form, such as IDs, death certificates, original policy documents, medical reports, and the beneficiaries' banking details.
4. Submit the claim form and wait for the insurance company's requirements. The claims assessment includes document verification and a field investigation, if necessary.
5. Once everything is in order, the insurance company settles the claim within thirty days of submitting the claim form.

List of necessary documents required

Here is a list of some common documents you should have ready while submitting the claims form:

The above list is not exhaustive as the insurance company might need other documents (such as a cancelled cheque or passbook of the beneficiary) to process the claim swiftly.

Common reasons for claim rejection and how to avoid them

Even though Indian insurance companies boast a high claim settlement ratio, there are various circumstances when a claim might be rejected due to some basic negligence:

1. If you have failed to disclose all material facts, such as health conditions or lifestyle habits.

2. If the premiums were unpaid or the policy lapsed before the mishap event.

3. If there are inconsistencies in submitted documents or any incorrect information is provided to the insurance company.

4. If the claim is filed after the specified deadline in the policy document.

To avoid any such circumstances, it is critical to review the policy document. You can also discuss the claim process with the insurance company's agent or customer service department.

As the policyholder, you have the duty of providing all the correct information to the insurance company. You should also inform your nominee about the policy details and required documentation process. If possible, keep a separate folder for the claim purpose only.

Summing up

Losing a loved one can be emotionally distressing for a family. It leaves a huge gap in our lives when someone departs forever. However, along with the pain of separation, there can be financial challenges that the dependents might need to encounter. Term insurance is a perfect solution to ensure that at least the financial needs of a mourning family are taken care of.

Hence, a beneficiary should provide the insurance company with correct and relevant information within the specified deadline to ensure swift claim processing. It is critical to review and familiarise yourself with your policy details to ensure all provisions are met and claims are processed smoothly and efficiently.

FAQs

What is the first step to take when filing a term insurance claim?

The first step is to notify the insurance company immediately about the policyholder's death, preferably within 30 days.

What documents are essential for filing a term insurance claim?

Essential documents include the death certificate, policy document, completed claim form, ID proof of the nominee, and medical records if applicable.

How long does it take for an insurance company to settle a term insurance claim?

Insurance companies generally settle claims within 30 days of receiving all required documents and claim forms.

What are common reasons for the rejection of a term insurance claim?

Common reasons include non-disclosure of material facts, lapsed policies due to unpaid premiums, inconsistencies in documentation, and filing claims past the deadline.