What is a term plan? A term plan is a type of life insurance that offers life cover for a fixed period. Term insurances are popular for providing huge coverage at lower premiums. During the tenure of your policy, if in an unfortunate circumstance you lose your life, the nominee mentioned in the policy receives the sum assured. It ensures that in your absence, your family does not suffer through financial hardships. When you buy term insurance, there are several aspects of it you need to be aware of. One such aspect that you and your nominee should both know is the claim process.
It is important to know the several steps involved in a term insurance claim process. Being aware of it ensures that, in times of emergency, there are no doubts or confusion. The nominee is eligible for filing the claim if the insurance policy is active and the demise of the policyholder is within the tenure of the policy. For it to be active, the policyholder has to pay premiums regularly. The policyholders and the nominee should know the exclusions and inclusions of their policy beforehand. In case of the demise of the policyholder, here is how the policyholder can go about the claim settlement process:
Step 1: Inform the insurance provider immediately
When the policyholder is no more, the nominee needs to inform the insurance company about the same as soon as possible. Once the insurance company is notified, the nominee will be required to submit documents to file a claim. The documents help the insurance provider understand the details required for the claim. These details include the policyholder’s name, policyholder’s date of birth, term plan details, nominee details, cause of death, time of death, and place of death. The nominee also needs to fill out a claim form when they file for a claim. This form is available online on the insurance company’s portal or they can also get it from the nearest branch of the insurance company.
Step 2: Keep the documents ready
It is important that the nominee keeps handy the documents that are required to submit during the term insurance claim process. Here are the key documents one usually needs to submit:
- Original term insurance papers
- An Identity Card that proves the age of the policyholder
- Death certificate of the policyholder
- Any other documents that the insurance company specifies
If the nominee has filed for a claim within three years of when the policyholder had purchased the policy, the insurer may investigate further. They would want to ensure that the claim is genuine. Here are some steps they make take to access the authenticity of the claim:
- They may contact the hospital where the policyholder lost their life.
- In case of any flight crash, they may check the details with the airline authorities.
- In the case of demise due to a critical illness, they might check the medical records along with the doctor’s certificate.
Step 3: Submit the required documents
The nominee needs to submit all essential documents to speed up the term insurance claim process. Here are the ones –
- Filled claim form
- Original documents of term insurance
- Original death certificate
- Attested copy of the death certificate issued by the local municipal authority
- Medical records of the policyholder
- Last medical attendant certificate from the physician
- Post-mortem report, if any
- Identity proof of the nominee
- Passport-size photo of the nominee
After these documents are submitted, the insurance company starts the claim settlement process.
Step 4: The process of claim settlement begins
The Insurance Regulatory and Development Authority of India (IRDAI) requires insurance companies to finish the claim process within 30 days of when the claim was filed. The deadline starts once the company had received the claim form along with other required documents. Sometimes, the insurance company may need to investigate further before processing the claim. In such times, the company needs to process the claim within 6 months from the date they received the claim request.
A term plan offers life coverage for both natural and unnatural death. It is important that you read the inclusions and exclusions of your policy to avoid any problems during the time of the claim.