It’s often said that death is the great equaliser. Irrespective of age, time or circumstances, it strikes one and all. And when that happens, it leaves families not only grieving but also struggling to navigate the financial and procedural aftermath.
That’s where term insurance plays its crucial role. Unlike other types of insurance, its purpose comes alive only in the policyholder’s absence. Ironical as that may be, the person who planned for their family’s security is no longer there to guide them through it. Which brings us to an important truth: buying a policy is not the end of financial planning; it’s the beginning of true responsibility. Ensuring that your loved ones know how to access that protection is equally vital. It calls for an open, unhesitant conversation about what needs to be done when the time comes.
The hope, of course, is that the need to file a claim never arises. But if it does, it will come without warning. In that moment, confusion must give way to clarity, and preparedness must stand stronger than panic. Here’s what every policyholder and nominee should know about filing a term insurance claim, so that if life takes its inevitable turn, your family knows exactly where to begin.
Inform the insurer without delay
The very first step is to inform the insurer of the policyholder’s demise at the earliest. Most insurance companies have both online and offline channels for claim intimation. The nominee can either download the claim form from the insurer’s website or collect it from the nearest branch office.
Before proceeding, it’s crucial to confirm that all premiums were paid up to date and the policy was active at the time of death. Once the claim form is duly filled, it should be submitted along with the necessary supporting documents.
Submit the required documents
To initiate the claim assessment, the nominee must submit the filled claim form along with key documents. These typically include:
● Duly filled and signed claim form or claimant’s statement
● Original policy document
● Death certificate issued by a local authority
● Age proof of the policyholder
● Identity and address proof of the nominee
● Bank account details or a cancelled cheque for the payout
● Medical or hospital records, if the death was due to illness or an accident
If death occurs under circumstances such as mass-scale accidents or natural disasters, where it’s difficult to retrieve the original policy document, the insurer may be requested to issue a duplicate.
Claim evaluation and verification
Once the documents are submitted, the insurer begins the evaluation process. This involves verifying the authenticity of the claim, reviewing the cause of death, and ensuring it falls within the policy’s coverage terms.
In some cases, especially those involving accidental death, suicide, or unclear medical circumstances, insurers may seek additional medical, hospital, or legal documents to rule out exclusions. This verification step ensures that the payout is processed responsibly and transparently.
Claim settlement timeline
The Insurance Regulatory and Development Authority of India (IRDAI) mandates insurers to settle death claims within 30 days of receiving all required documents. If any further investigation is necessary, the process should be completed within 90 days, and the insurer must provide valid reasons for the delay.
If the claim settlement exceeds the stipulated period without a justified reason, the insurer is required to pay penal interest on the claim amount, ensuring fairness to the beneficiary.
Suicide clause and waiting periods
Term insurance policies generally cover suicide only after a waiting period of 12 months from the date the policy was issued or revived. If death due to suicide occurs within this period, the insurer typically refunds only the premiums paid, excluding taxes and other charges, instead of paying the full sum assured.
Also read | The truth about nominees: They don’t automatically inherit your assets
Factors to keep in mind when filing a claim
While term insurance is designed to provide financial security, one must factor in certain situations to avoid or minimise your chances of claim rejection:
● Lapsed policy due to unpaid premiums: A policy that has lapsed because of missed payments becomes inactive, and no benefits can be claimed. Timely premium payments are critical to maintaining cover.
● Failure to declare multiple policies: Always disclose any existing life insurance plans to prevent complications at the time of claim verification.
● Non-disclosure of information: Omitting or misrepresenting details such as existing health conditions, prior insurance policies, or lifestyle habits (like smoking or alcohol use) can lead to rejection. Insurers rely on full disclosure to assess risk accurately.
● Exclusions related to suicide: Term insurance generally covers suicide only if it occurs after 12 months from the policy’s issuance or revival. Claims made before this period may not qualify for full benefits.
Also read | If an old illness was cured, can insurance still reject your claim?
What policyholders must do
A term insurance claim is meant to be simple, but in moments of grief, even simple processes can feel overwhelming. Keeping a few things ready can help ease that burden:
● Maintain a folder with the policy documents, premium receipts, and the insurer’s or aggregator’s contact details.
● Ensure the nominee knows the insurer’s name, policy number, and claim process.
● Keep digital and physical copies of essential documents safely stored.
● Review the policy every few years to update contact and nominee details.
The writer is Head of Term Insurance, Policybazaar.
Disclaimer: The views expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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