The easy and timely settlement of a valid claim is an important function of an insurance company. The yardstick to judge insurance company’s efficiency is as to how quick the claim settlement is. The speed, kindness and fairness with which an insurer handles claims show the maturity of the company and may lead to great satisfaction of the client. It is the liability of the insurance company to honour valid and legal claims. At the same time the company must identify the fraudulent and invalid claims.
A claim may arise:
- On death of Policyholder before the maturity date.
- On maturity, i.e. after expiry of the endowment period specified in the policy contract when the policy money becomes payable.
Following points to be considered in connection with insurance claim:
Intimation of death
The death of the life assured has to be intimated in writing to the insurer. It can be done by the Assignee or nominee under the policy or from a person representing such Assignee or Nominee or when there is no nomination or assignment by a relative of the life assured, the employer, the agent or the development officer. The intimation of the death of the life assured by the claimant should contain the following particulars:
- His or her relationship with the deceased
- The name of the policyholder
- The number/s of the policy/policies
- The date of death
- The cause of death and
- Sum assured etc.
If any of these particulars are missing the claimant can be asked to furnish the same to the insurer. The intimation must satisfy two conditions
- It must establish properly the identity of the deceased person as the life assured under the policy
- It must be from a concerned person.
Proof of death and other documents
In case of claim by death, after the receiving the intimation of death the insurance company ensures that the insurance policy has been in force for the sum assured on the date of death and the intimation has been received from assignee, nominee or other claimant. The following documents are required:
- Certificate of death.
- Proof of age of the life assured (if not already given).
- Deeds of assignment / reassignments.
- Policy document.
- Form of discharge.
If the claim has accrued within three years from the beginning of the policy, the following additional requirements may be called for:
- Statement from the hospital if the deceased had been admitted to hospital.
- Certificate of medical attendant of the deceased giving details of his/her last illness.
- Certificate of cremation or burial to be given by a person of known character and responsibility present at the cremation or burial of the body of the deceased.
- Certificate by employer if the deceased was an employee.
Proof of death and other documents to be submitted will depend upon the cause of death and circumstances of each case.
In case of an air crash the certificate from the airline authorities would be necessary certifying that the assured was a passenger on the plane.
In case of ship accident a certified extract from the logbook of the ship is required. In case of sudden cardiac arrest, murder the doctors’ certificate may not be available.
The insurance may waive strict evidence of title if the sum assured of the policy is small and there is no dispute among the survivors of the policy moneys.
If the life assured had a death due to accident, suicide or unknown cause the police inquest report, panchanama, post mortem report, etc would be required.
Net Payable Amount of Claim
After receiving the required documents the company calculates the amount payable under the policy. For this purpose, a form is filled in which the particulars of the policy, assignment, nomination, bonus etc. should be entered by reference to the Policy Ledger Sheet. If a loan exists under the policy, then the section dealing with loan is contacted to give the details of outstanding loan and interest amount, which is deducted from the gross policy amount to calculate net payable claim amount.
The net amount of claim payable is calculated and is called payment voucher. In the case of ‘in force’ policy unpaid premiums if any due before the assureds’ death with late fee where necessary and the premium falling due in the policy year current at the time of death should be deducted from the claim amount.
If the life insured survives to the full term, then basic sum assured is payable. This payment by the insurer to the insured on the date of maturity is called maturity payment. The amount payable at the time of the maturity includes a sum assured and bonus/incentives. The insurer sends in advance the intimation to the insured with a blank discharge form for filling various details in it. It is to be returned to the office along with
- Original Policy document
- Age proof if age is not already submitted
- Assignment /reassignment, if any. .
Legally no claim is acceptable in respect for a lapsed policy or death of the Life assured happening within 3 years from the date of beginning of the policy. However, some concessions are given and payment of claims is made:
- If the Life assured had paid at least 3 years' premiums and thereafter if premiums have not been paid, the nominees/life assured get proportionate paid up value.
- In the event of the death of' the Life assured within 3 years and the policy is under the lapsed position, nothing is payable.
Procedure of the maturity claims
Settlement procedure for maturity claim is simple after receipt of completed and stamped discharge form from the person entitled to the policy money along with policy documents, claim amount will be paid by account payee cheque.
If the life assured is reported to have died after the date of maturity but before the receipt is discharged, the claim is to be treated as the maturity claim and paid to the legal heirs. In this case death certificate and evidence of title is required.
Where the assured is known to be mentally deranged, a certificate from the court of law under the Indian Lunacy Act appointing a person to act as guardian to manage the properties of the lunatic should be called.
Additional benefits apart from regular claims
Double Accident Benefit: For claiming the benefits under the Double Accident Benefit the claimant has to produce the proof to the satisfaction of the Corporation that the accident is defined as per the policy conditions. Normally for claiming this benefit documents like FIR, Post-mortem Report are required.