Term Insurance Claim Settlement Process Explained

Term insurance claim settlement is the procedure by which a beneficiary files a claim with the insurance company in order to receive death benefits in the event of the life assured's untimely death or maturity benefits in the event of the life assured's survival until the end of the policy term. If you are a beneficiary of the term insurance policy, you can file a claim settlement in case of the demise of the policyholder, or on the maturity of the policy. You can also claim your insurance under the riders you picked for your term insurance policy. 

Procedure To Claim Your Term Insurance 

Filing a claim settlement for your term insurance policy is simple and can be done without much hassle. The following is the procedure of claiming your term insurance. 

1. Informing The Insurance Company

The nominee must alert the insurance company as soon as feasible, either online or offline, of the claim. Policyholder information, such as the policy number, policyholder's name, cause of death, location of death, and nominee information, must be included with the claim notification. The claimant can either go to the insurance provider in person or obtain the claim papers from the company's website.

2. Provide Documents 

You may require some papers while filling out the claim form, whether on paper or electronically, so keep them handy. These primarily consist of the death certificate of the life assured and the original term insurance policy documentation.

3. Verification And Enquiry 

The insurer may conduct their own inquiry into the circumstances of death after you submit the claim form. This usually occurs if the life assured passes away within three years of the policy's issuance. If the life guaranteed died in an unusual manner, you may be required to give a copy of the FIR as well as a post mortem report.

4. Claim Settlement

The insurer is required by the Insurance Regulatory and Development Authority of India  (IRDAI) to grant a death claim within 30 days from the date the beneficiary submits all of the facts and documents along with the claim form. If the insurer delays longer, the beneficiary is subject to receiving penal interest on the claim amount from the insurer. 

Rejection of Term Insurance Claim 

Although your term insurance ensures financial assistance in taxing situations, the insurance company may reject your claim in certain valid situations. These situations are usually mentioned in the terms and conditions of the term insurance policy. It is very important to go through the exclusions of your policy in order to avoid rejection of your term insurance claim. The following are a few common situations that may lead to rejection of your term insurance claim- 

• The claim is likely to be rejected if the nominee or the claimant provides incorrect, inaccurate or deceptive information in the term insurance claim application form.
• If the policyholder has failed to pay the premium amount on time, or if the policy has expired, your claim will be invalid, hence rejected. 
• In case of suiceide before the first policy term is completed, or in case of accidental death while intoxicated or under the influence of alcohol or narcotics. 
• Any fake claims submitted by the nominees or the claimants will be rejected. 

Take Away

Even though the process of filing a claim for term insurance is simple, it may still be denied for a variety of reasons. Your claim is likely to be refused if the policyholder does not pay the premiums. To avoid rejection, make sure to follow the policy's terms and conditions while settling a claim.

You may also like to read:-

• What Are The Common Exclusions Under Term Insurance Plans?
• Top 5 Benefits of Buying Term Insurance Plans?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.