Find Out How Life Insurance Claim Settlement Works in India

In simple words, life insurance is an agreement between the insurance policyholder and the insurer. The insurance company provides money to the policyholder in case of death or when the policy matures. Total life insurance coverage includes the entire sum assured in the policy term.

The settlement of a claim is one of the essential services an insurance company must provide. It is an obligatory service for the insurance company to settle claims promptly. And a good insurance company ensures that the claims are paid promptly and without hassle. The majority of companies have a straightforward insurance claim settlement process. Most insurance companies settle claims well within seven days. Let us have a look at how the claim settlement works in India.

Death Insurance Claims

In case the policyholder dies, the claimant can make insurance claims through the following steps-

1. Notifying the insurance company

   As always suggested, the nominee should notify the insurance firm at the earliest to start the claiming process immediately. The main standard requirements for initiating the process are – date of demise, location of death, reason of death, policy number, policyholder's name, claimant's name, etc. The process can be done both by physically filling out the intimidation form or by filling it out on the provided company website.

2. Documents required from the claimant to claim the insurance-
   

   • Original Policy Documents
   • Local authority attested death certificate
   • Local authority attested death certificate
   • Address and ID proof of policyholder
   • Other documents required by the insurer

3. Submission of required documents

   All documents are submitted to the insurance company to settle the claim.

4. Settlement of claim
   

   Under regulation eight by IRDAI (Policy holder's Interest) Regulations, 2022, a specified period of 30 days is given to the insurer to settle the claims from the date of receipt of all the required documents. However, in suspicion cases like fraud, the settlement can take up to 6 months from the written intimidation of the claim.

5. Maturity claims
   

   In this case, the insurance firm is liable to pay the sum assured amount of the life insurance once the policy has ended. The claimant can claim the sum simply by filling out the form provided by the company. The claim must be accompanied by the original policy document, ID proof of the policyholder, and a cancelled cheque.

Claim Intimation

If a claim arises, you should do the following:

• First, contact your insurance advisor from the company.
• Second, call the customer helpline of the insurer.
• Third, contact the insurance branch officer.

Benefits of Life Insurance

The benefits of life insurance are no longer just providing a sum of assured money at the end but also building the best tax saving and long-term savings plans; let's look at how!

• Best Tax saving plan
  

  According to the Income Tax Act, 1961, a maximum amount of INR 1,50,000 is claimable against the premiums paid by the policyholder for the life insurance policy.
  
  Under section 10D, the maturity amount will not be taxed if the premium does not exceed 10% of the assured sum amount.

• A long-term savings plan
  

  One can save a good amount of money with the additional advantage of insured life cover. We can observe that paying small monthly premiums can generate substantial funds, which will only multiply in the coming years.

Conclusion

Life insurance plays a vital role in every citizen's life. It not only secures your future by providing the best tax saving plan and long-term savings plan but also your family's future after your demise. One can process the insurance without delay if one has appropriate documentation. With the proper documents and following the step-by-step claiming process, you can settle a claim within days. 

Disclaimer: