July 27, 2024
New Delhi
Economy Finance Insurance

How to Claim Life Insurance Policy?

How to Claim Life Insurance

If anyone wants to control his risk in life, insurance is one of the finest options. To safeguard the future of one’s family, one must make an important investment in life insurance. The investment in insurance never goes in vain. It is always beneficial, and as in the case of any mishappening, insurance plays a vital role in bringing relief to the aggrieved person.

What is Life insurance?

A legal contract known as a life insurance policy provides the benefit to the insured person by the insurance company, which ensures the policyholder’s financial security and pays a death benefit to the nominee upon the insured person’s demise. 

The life insurance coverage must be maintained by either regular payments from the insured person over time or a single premium. The life insurance policy’s beneficiary will receive a specific sum of money from the insurer in exchange for the policyholder’s premium payments when the covered person dies or after a predetermined period. Life insurance refers to this arrangement.

How Does Life Insurance Work?

You receive a complete life insurance policy in exchange for paying the life insurance company’s premiums for a specific policy period. By offering a one-time payout known as a death benefit in the event of an unexpected occurrence, life insurance protects the future of your loved ones. You might be eligible for a Maturity Benefit under some life insurance policies once the policy period has passed.

Life insurance is only offered for a short time. If the insured person dies before this period, the life insurance company shall pay a death benefit, commonly known as the sum assured. Depending on the type of life insurance, the policyholder can avail of a maturity bonus if he lives through the policy’s term.

Benefits of a Life Insurance Policy

1- Financial Support: Uncertainty and randomness are hallmarks of life. Unfortunately, there is always a chance that something horrible, like dying, can occur. In this situation, your family has to deal with financial difficulties due to the absence of your monthly salary. Life insurance offers the security needed in these situations. Your insurance provider must pay the predetermined death benefit to the nominee or beneficiary so that even if you aren’t around, your family will be supported.

2- Long-Term Savings: If you want to save money for the future, you should think about getting life insurance. The policies of Life Insurance are helpful in your methodical saving and future wealth accumulation. The invested money can be used for a variety of things, like paying for your child’s college tuition, paying for his wedding, and many other things. Additionally, life insurance policies provide annual payouts in the form of annuities, making them a great way to achieve your retirement objectives.

3- Investment: The life insurance companies offered you ULIPs, or unit-linked investment plans, which are essentially financial vehicles. This market-linked product is a tool for wealth creation. The payments made for insurance coverage are significantly repaid with ULIPs. The majority of life insurance policies offer significant returns upon maturity, making them an appealing investment option.

4- Develops a Habit Of Saving: By taking out an insurance policy, you can develop the practice of careful saving, which will help you amass a sizable corpus. To effectively fulfill your commitments, you may choose to invest in a life insurance plan.

How to Settle Claims On The Life Insurance Policy

A formal request for compensation against damages covered by your insurance policy is known as an insurance claim, which is made to your insurance provider. If any casualty occurs with the insured person before the maturity of the policy, the Life Insurance Company extends its helping hands to the family of the insured person, for which he has already made arrangements by paying premiums.

Death claims, maturity claims, and rider claims are the three types of life insurance claims that can be broken down. Each of these insurance products has a different settlement process.

1- Death Claim Settlement

The nominee of the insured person will get the sum assured. He only needs to take initiative. The procedure is as below:

  1. The recipient must submit a claim submission form to the insurance company as soon as possible after any tragic incident occurs.
  2. Details, including the date, location, and cause of death, should be included in the claim intimation.

An insurance company may request more information, such as

  • Death certificate
  • Copy of the policy
  • A claim notification form
  • Canceled cheque
  • ID proof for the nominee
  • Physician’s statement
  • Treating Hospital certifications
  • KYC
  1. In the case of unnatural death, some more documents are needed, such as an FIR copy, a post-mortem report, and a death certificate issued by the local authority.
  2. If all of the submitted documents are properly approved, the insurance company confirms the claim and settles it.

2- Maturity Claim:

When the insurance term is over, maturity claims are paid. On the date of policy maturity, the supplier of insurance services pays the policyholder. The assured sum and, if any, incentives are included in the total amount due on the maturity date. The policyholder must complete a bank discharge form, attach the necessary paperwork, and deposit it with the bank.

3- Rider Claim

Rider claims are extra benefits that are combined with the original policy upon payment of an additional premium. A life insurance policy may have a wide range of riders, such as hospital cash riders, critical illness riders, waiver of premium riders, and accidental riders. Various procedures are used to resolve riders’ claims. Waiver of premium claims, for example, are rider claims in cases of unavoidable deaths and are satisfied when the death claim is settled. Other rider claims are addressed following the submission of pertinent papers, the policy copy, and properly filled-out forms.

Conclusion

By providing as much information as you can, you can speed up the issuance of your policy and the processing of claims with your insurance provider. It is vitally important to submit accurate paperwork on time. While some of the paperwork is required to complete a claim, other documents are required for other circumstances.

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