How to Make Death Claims on Life Insurance?

An unfortunate demise in the family can be emotionally draining for your family. The whole family deals with grief, and worries about financial and legal issues too. A life insurance plan might not ensure emotional support but surely provide financial support.

When the policyholder dies, a claim intimation has to be sent to the insurance company as early as possible. The nominee under the policy who receives benefits in case of a death claim can do this.

Understanding the death claim process of a life insurance plan is very important in order to make sure that a claim is not rejected due to an error. Hence, teaching them how to claim life insurance in case of death is necessary. But before we do that, let us start from the basics.

What is life insurance policy?

The life insurance policy is an agreement between an insurer and the policyholder. The policyholder agrees to periodically pay a certain amount of premium to the insurer. In return, the insurance company pays sum assured to the nominees of the insured in case of his or her untimely demise during the policy tenure.

Many different types of life insurance are available, depending upon your needs. Term life insurance expires at the end of the contract term (a certain number of years). On the other hand, permanent life insurance policies remain functional until the demise of the insurer or if the policyholder decides to stop paying premiums or surrenders the policy.

Why is life insurance important?

Life insurance provides financial security to your family in your absence, and insurance claim after death helps the nominee to receive all the benefits of insurance. Life insurance also covers your health expenses in case of illness. It can also guarantee tax benefits and the premiums paid for insurance can be claimed for income tax deductions under Section 80C of the Income Tax Act,1961.

Furthermore, life insurance can also pay for the funeral, debts, and other expenses, which prevent the family to go into financial turmoil. However, the insurance company reviews your claim before paying. In case of any error or foul play, the death claims in life insurance might be delayed or declined. Hence, learning the process of death claims is as important as purchasing life insurance. The process of life insurance claim after death has to be initiated immediately after the death of the policyholder.

To make a death claim, nominees need to inform the insurance company about the death of the policyholder. Different policy providers have their own requirements that have to be met by the nominees. The information can be found on the insurer’s website and in the policy documents. You can also directly reach out to them and let them guide you through the process.

The insurance companies require the nominee to fill in the death claim form, which can be either downloaded from the insurance company’s website or collected from their offices. Some insurance companies might ask you to mail the death certificate along with the form. You need to provide them with the needed information in the form and submit it along with other necessary documents. The information regarding the necessary documents can also be found on the insurer’s website.

Required documents

While making a life insurance claim, the nominee needs to provide the documents required by the insurer. The documents can vary depending on the insurer, but most of them more or less require the same documents. These can be divided into two categories: mandatory and supporting documents.

Mandatory documents

• Correctly filled claim intimation form
• Insurance Policy document
• Death certificate issued by an appropriate authority
• Nominee’s address proof, photo ID, and photograph

Supporting documents

• Bank account details with passbook
• Medical certificate that mentions the cause of death
• Medical records including treatment records, admission documents, discharge summary, death report, investigation report, and other details required by the insurer. A post-mortem report is required for early death claim in life insurance in case of unnatural death.
• Copy of first information report
• Certified copy of post-mortem report
• Copy of driving license if the policyholder’s death is caused by an accident when driving a vehicle
• Any other required document mentioned in the policy document
• If the death is due to a medical reason, then the physician’s statement and other treatment records are also required.
• In case of accidental death, documents like FIR or Police investigation reports and Post-Mortem reports (PMR) are mandatory.

Some insurance companies pay in lump sum, while other options are available too. You can specify your preference to the company, as according to IRDAI guidelines for death claim, an insurer shall settle or reject a claim within 30 days. So, it usually takes around a month for the insurance company to review the claim and accept or reject it. However, if it takes longer, you can visit the nearest branch to enquire about it.

Know more about tax benefits of life insurance claims: Section 10 (10D) of Income Tax Act, 1961

A life insurance policy is a shield against any financial hardship the family might face in case of sudden death of the bread earner of the family. However, buying the policy does not ensure the benefits, as the claim can be rejected if it is not made properly. Hence, it is essential to file the claim properly to avail the benefits of the insurance plan.