Type of Term Insurance Claim You Need to Know About

A policyholder purchases a term insurance plan for a specific time period and makes premium payment till the predetermined time period ,so that the plan benefits can be availed by their loved ones after their untimely demise during the plan duration. There are different kinds of term insurance claims through which one can avail these benefits.

For instance, if a policyholder dies, then the nominee appointed by policyholder would approach the insurance company and register a claim in order to receive the benefits of the plan. These are known as term insurance claims.

Different Types of Term Plan Claims

A term insurance plan offers several benefits to the policyholder and their family members. However, each of these benefits serves a different purpose, therefore, the claim received towards each of these insurance benefits is different. Generally, three types of term insurance claims are offered under all term insurance plans available in the market. These are:

• Death Benefit Claim
• Rider Benefit Claim
• Maturity Benefit Claim

Let us understand about each of these insurance claims in detail:

Death Benefit Claim

The primary purpose behind buying a term insurance plan is to offer financial protection to one’s family members after their unfortunate demise during the duration of the plan. Thus, a death benefit under a term insurance plan is the entire sum assured amount that the nominee appointed by the policyholder receives after the unfortunate death of the latter during the policy duration.

The family members are entitled to receive the entire sum assured amount after filing for death claim, either in lump sum or in parts. This depends upon the reimbursement method opted by the policyholder while purchasing the insurance plan.

Rider Benefit Claim

A rider is the add-on that is purchased along with the standard insurance plan in order to enhance the coverage of the policy. An insurance company offers various riders to the policyholder to choose from, and including many riders to a plan would result in an increase in the insurance premium. However, these insurance riders can prove to be extremely helpful during the time of emergency if they are chosen wisely. A rider provides advantages depending on specific situations that are covered. Thus, these can be claimed whenever any of the mentioned-situation arises and can be claimed during or after the plan tenure. Some of the common riders available are accidental death riders, critical illness riders, waiver of premium riders, etc.

Maturity Benefit Claim

A death benefit claim is applicable only in case the policyholder dies during the plan duration, however, what happens in case the policyholder outlives the policy duration? In such a case, the plan matures and the policyholder is not entitled to receive maturity benefit by making an insurance claim.

In case, the policyholder has chosen a term insurance policy with the feature of return of premium, then the policyholder is entitled to receive paid premiums as maturity benefits in case they survive the plan duration.

Documents Needed to Claim Term Insurance

Some of the important documents required while filling different kinds of term insurance claims are as follows:

• Original Insurance Plan
• Copy of Medical History
• Copy of Post Mortem Reports
• Death Certificate of the Policyholder
• Identity Proof of Nominee
• Address Proof of Nominee
• Cancelled Cheque
• Claim Forms

Also read: Term Insurance Claim Settlement Process Explained

Understanding Term Insurance Claim Settlement

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.