June 23, 2021

Term Insurance Claim Process Explained

What is claim process?

Though we never wish for such a day to occur, knowing the claim settlement process of your term plan is a must. In the event of an untoward incident, the last thing you would want is to be unaware of how to proceed with the claim. The insurer will surely help you out during such a tough time and ensure a quick insurance settlement. Keep reading to learn what term plan is, how its claim process works and how to avoid claim rejection.

How to Make a Death Claim for Term Insurance?

In the event of the policyholder’s death, you need to follow certain steps in order to get the claim payout. Allow us to take you through the process with a step-by-step guide

        Step 1: Intimation

The beneficiary of the term insurance plan needs to inform the insurance provider regarding the demise of the policyholder as soon as possible. This shall allow the insurer to start the claim settlement process. You need to provide the policy number, name of the policyholder, cause of death, date of death, name of the beneficiary and place of death. A claim settlement form shall be available at the local branch that you must fill out with the correct details. You can also download the form from the insurer’s website.

        Step 2: Required documents

Below mentioned are some important documents that you need to submit with the claim application form –

        Proof of ID and address of the beneficiary

        Original term insurance policy papers

        Death certificate of the policyholder

        Proof of age of the policyholder

        Medical certificate

        Discharge certificate

        Any deeds of assignments or reassignments, if applicable

        Post-mortem report

        Hospital records (in case of death due to an illness)

        Copy of beneficiary’s passbook

        Step 3: Submission of application

On successfully submitting the claim settlement form and the required documents, the claim procedure shall begin. The insurance provider will contact you in case any additional document or information is required to support the insurance claim.

        Step 4: Claim Settlement

As per IRDAI (Insurance Regulatory and Development Authority), the term insurance claim must be settled within 30 days of receipt of all documents. In case the death of the policyholders needs to be investigated, the settlement period can be extended to 6 months. But if the insurance provider fails to do so in the stipulated time, the company will have to pay penal interest.

How Can You Avoid Insurance Claim Rejection?

Here are some key tips to help you avoid getting your insurance claim rejected:

  1. Don’t conceal any information: It is advised to avoid hiding any detail related to your health, family history, lifestyle habits, age, etc. In case the cause of death is an illness and you hadn’t revealed it to the insurer, your term insurance claim can be rejected if such an ailment is not covered under the policy.
  2. Pay your term insurance premium regularly: Another reason for claim rejection or delay can be policy lapse or defaulting on your payment. You can opt for auto-debit of the term insurance premium or ensure to set aside the amount without fail.
  3. Fill your own policy application form: It is best to fill out your own insurance policy application, as someone else may not be aware of specific details. In case some information doesn’t match the detail mentioned in the form, the company will hold up your insurance claim.
  4. Go through the terms and conditions: Many policyholders fail to read the terms and exclusions of the policy. This can lead to last-minute problems if your claim doesn’t satisfy the conditions of your plan.

With this, you can now ensure your term insurance claim goes through smoothly, without any hitches! To get started, use a term insurance calculator, know your premium amount and secure the life goals of your loved ones.