A term life insurance plan provides a high sum assured at a pocket-friendly premium. This offering makes it one of the best life insurance policies. A term plan is one of the most useful insurance plans available in the market today, as it can help you in securing your family’s financial future.
Term insurance plans act as an income replacement tool for your family in case of any unfortunate event with you. The death benefits received by your loved ones can help them to manage all the household expenses, and they can lead a financially independent life. As you know how vital it is to buy a term plan, it is equally essential to understand the claim settlement process. Moreover, you need to explain the claim settlement procedure to your nominee.
A term insurance claim is a process wherein the policy’s nominee intimates the insurer about the policyholder’s death. Here, the nominee has to avail of the death benefit by filling in the claim settlement form. Before your nominee files the claim, he or she needs to check if the term plan was active until you were alive. Additionally, he or she must make sure that you had paid all premiums for the term insurance policy on time. Also, the nominee must review the exclusions of the term plan.
Process to settle a term insurance claim
To file a successful claim, the nominee needs to:
- Intimate the insurance company
Firstly, the nominee needs to inform the insurer about the policyholder’s death as early as possible. For this, the nominee will have to collect the claim settlement form from the nearest insurer’s branch office, or he or she can download it from the company’s website. The nominee will have to input details, such as the name and date of birth of the policyholder, policy number, age of the insured, and place and cause of death. The nominee will also have to provide information about himself or herself.
- Submit the mandatory documents
The insurer will ask for documents, such as:
- Properly filled claim settlement form
- Original copy of the term insurance policy
- Original death certificate
- Hospital report, if any
- Post-mortem report, if applicable
- Policyholder’s age proof
- Nominee’s passport-sized photograph and identity proof like his or her Aadhar Card, PAN Card, passport, voter ID Card, or driving license
The insurer does an investigation if the claim is filed within three years of policy initiation to ascertain whether it is legit or not. The insurer may ask for medical reports if the policyholder died due to any critical illness.
When does the nominee receive the death benefit?
As per the mandate of the Insurance Regulatory and Development Authority of India (IRDAI), the insurance company should pay the death benefit to the beneficiary in 30 days from the date when the nominee had sent the claim form. If the insurer is scrutinizing the policyholder’s demise, then they have a maximum timeframe of six months to pay the claim from the date when they got to know about his or her death in writing.
To sum it up
You must buy an online term plan to secure the economic future of your loved ones. So, it is your responsibility to understand every aspect related to a term plan. Make it a point to explain everything to your nominees regarding claim settlement. Remember that you will not be there to guide them when they file a claim. It is your duty to ensure that they are well-versed with the procedure so that they live a comfortable life in your absence.