How To Make Death Claims On Term Life Insurance?

What is Term Insurance?

Term insurance is the most basic form of life insurance. The insurer pays out the sum assured if the insured dies within the term of the policy. There are no survival benefits under term policies. It is a pure risk protection policy covering you over a specified term.

Only nominees or beneficiaries can claim the term policy money (death benefits), when the insured dies within the term of the policy. The pain of losing a loved one is immense. It’s a huge void to fill. It causes a lot of distress and financial instability. The person might not be around to support you emotionally, but the death benefits of the term life plan would take care of your financial needs.

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How To Make Death Claims On Term Life Insurance?

1. File a Claim

The nominee or beneficiary of the term policy must intimate the life insurer on the demise of the policyholder, at the earliest. The beneficiary can file a claim by contacting the life insurer on their toll free number. It is better to file death claim with a call, rather than through any other media.

2. Claim Processing

To initiate the claim, the beneficiary must submit the requisite documents. The requisite documents for making a claim on term policy on death of the policyholder due to natural or accidental death is mentioned later in the article. When the life insurer receives the requisite documents, claims assistance teams would take over further proceedings. Claim assistance teams will verify the claim, documents submitted, nominee declaration and verification of the same. The team might ask you to submit additional documents, if required.

3. Acceptance and Payout

Most life insurers prefer paying proceeds of the term life insurance plans to beneficiaries through ECS. The insurer would ask you to submit bank details, cancelled cheque or a photocopy of the bank account passbook. You might have to get these attested by the bank authorities.

To lodge a death claim, you are requested to support the claim with documents.

SEE ALSO: Best Term Insurance Plans In India

Essential Documents to Claim Life Insurance in case of Natural Death

• Term insurance policy document
• Duly filled claim form (as provided by the life insurer)
• Original or photocopy of the death certificate

How to make a life insurance claim in case of an Accidental Death

Submit:

• Medical attendant's certificate or Attending Doctor’s Statement
• Certificate issued by the hospital
• Medical reports like admission and discharge summary, death summary and relevant test reports
• Certificate issued by the employer
• Post-mortem report
• FIR report
• Police Investigation Report

Death Claims: Tips to keep in mind before you claim life insurance

• What if the nominee or beneficiary dies along with the life assured?

In this case, the payout would be made to the next legal heir. The claimant must provide legal documents showing proof.

• What if the beneficiary dies before the policyholder?

In this case, the policyholder must nominate another person as the beneficiary or nominee while the policy is still in place/active.

•  How long can the beneficiary wait to claim a term life policy?

It is advisable to file a claim at the earliest on death of the policy holder.

• How long does a life insurer take to pay out the death benefit?

The claim settlement process would roughly take around 30 days. Once your claim is approved, the life insurer makes the payout, instantly.

• Can a Life Insurer deny a claim?

If your claim is genuine and is supported by the requisite documents, then your claim is not rejected. However, if the life insurer finds out that it’s a fraudulent claim, then your claim may be rejected.

• How does a life insurer pay out the benefit to the beneficiary or nominee?

The Nominee must submit the bank details and a valid proof of identity. For bank details, you must furnish cancelled cheque or a photocopy of the bank account passbook, and for beneficiary identity proof, you can furnish a photocopy of PAN card, passport, Voter identity card, Aadhaar (UID) card and so on.

• Exclusions of death claim: Death is not covered if the policyholder commits suicide within 1 year of the policy issuance.

It is crucial to understand the process of filing death claim on term life plans when the policyholder dies. You must be aware on the timeframe mentioned by the insurer to file a claim; if you don’t file within the specified timeframe, then the insurer has all the rights to deny the claim. In this case, you can blame no one but yourself. The policyholder must inform his or her nominee(s) on the policy. There is no point in availing a term life policy and not informing the nominee or beneficiary. After all, you are availing a term life policy to financially secure the lives of your loved ones.

SEE ALSO: What is a Term Insurance Plan?

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