Term Insurance Claims Process A Step-by-Step Walkthrough

Term Insurance Claims Process: A Step-by-Step Walkthrough

Financial safety is a top priority for everyone today, given the increasing complexities of life on a daily basis. Whether through mutual funds or insurance policies, everyone is investing in securing the future of themselves and their family members.

A term plan is a popular financial tool that safeguards the family by providing financial support in case of the policyholder’s unfortunate death via death benefits. It is easy to understand and can be purchased online after a thorough comparison using term plan calculator to know which fits the requirement best. 

But how can you file a claim? What is the procedure to get a claim settlement after an unfortunate incident of the policyholder?

We will answer these questions in this blog.

Step-by-Step Guide for Term Insurance Claim

There are primarily three types of claims that you can file with the term insurance plan.

  • Death claims wherein the nominated beneficiaries receive claim settlement due to the policyholder’s unfortunate death.
  • Maturity claims where the claim benefit is applicable to the policyholder once the policy reaches maturity or completes the pre-decided tenure period.
  • Rider claims where all the additional add-ons combined with the term insurance plan, like critical illness and accidental death, are considered. If the policyholder has these riders, they will receive an additional payout above the basic assured amount based on the terms and conditions of the policy.

The step-by-step procedure for settling a death claim in a term insurance policy includes three main steps, as mentioned below.

  • Step 1: Alert The Insurer

To begin, you need to notify the insurer about the policyholder’s death. A list of documents necessary to file for claim has to be prepared and collated before notifying the insurer to start the procedure. 

The time period to notify the insurer is up to 90 days from the date of death. You can visit the insurance provider in person to file the claim or directly submit the claim settlement application via the provider’s website.

  • Step 2: Claim Assessment Procedure By Insurer

As soon as the insurer receives the claim settlement request, they must assess the file before proceeding. All the necessary documents submitted in the first step are analysed and evaluated to cross-check and confirm all details. 

Any additional details can be requested by the insurer if they want to investigate the claim request further. If the policyholder dies within three years of purchasing the policy, the insurer can ask for additional confirmation by cross-checking with the hospital, documents from the hospital to validate the reason for death, etc.

  • Step 3: Claim Settlement

Once the assessment by the insurer is complete, the insurer decides to accept or reject the claim request. There are multiple reasons why an application for claim settlement can be rejected, including incorrect information, missing documents, etc. 

The policyholder’s family will receive the letter listing all the reasons behind the rejection. For claim settlement upon approval, the insurer has to settle the claim within a maximum of 30 days.

List of Necessary Documents

Here is a quick checklist to ensure all the necessary documents are present before you file for the claim.

  1. Claim application form
  2. Death certificate
  3. Hospital Certificate filled by the hospital authority.
  4. Employment documents if the policyholder was employed or education documents for a student.
  5. KYC documents of the policyholder, including photo ID, address verification ID, etc.
  6. KYC documents of the nominee, including photo ID, address verification ID, etc.
  7. All original policy documents

Conclusion

Most insurance providers allow online and offline filing for claim settlement and include only three major steps, as mentioned above. All you need to do to settle your claim in time is fill out the application with the right information from the get-go. 

Keep all the necessary documents ready and always be honest throughout the claim filing process. Lastly, while choosing an insurance provider for a term plan, assess the claim settlement ratio and then decide.

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