Follow these steps in case of life insurance policyholder's death

Here are the series of steps that need to be taken after the death of the insurance policyholder.

Aug 19, 2020 08:08 IST India Infoline News Service

Life Insurance Policy Terms
Losing a loved one at any age is always a traumatic experience. However, the demise of the breadwinner of the family also imposes financial strain on the family. Most people have life insurance cover; which could either be a term cover or an endowment cover. What you must be clear is the series of steps to be taken after the death of the insurance policyholder.

Steps to make a death claim

When the policy holder dies, the first step that the family members need to take is to immediately intimate the life insurance company. Your policy document contains the details of the contact person and the email id where such intimation has to be sent. That must be done as soon as the policyholder passes away.

There is an important aspect to remember. Life insurance claims are classified into “Early Death” claims and “Non-Early Death” claims. If the death of the policyholder occurs within 3 years of taking the policy, it is classified as Early Death; else it is Non-Early Death. Normally, the procedures and documentation are more stringent and elaborate for Early Death cases.

The next step is to contact the insurance company and get the claim intimation form. Such forms are also available on the internet, but it is always advisable that you file the claim with the help of your insurance agent or your personal finance advisor so that there is an additional level of vetting done before submitting the claim.

Documents to be submitted for life claim

The extent of documentation keeps getting more complex as the cause of death differs. There are some basic documents required to be submitted and then there are additional documents for special cases.
  • Every claim form has to be accompanied by basic documents like the Death Certificate issued by the Registrar, original policy documents, Aadhar Card or other ID proof of the beneficiary, age proof of the insurer (Aadhar Card), executed Discharge form with witness and Medical Certificate from an authorized medical practitioner.
  • In addition to the documents mentioned in the first point, a copy of the police FIR will also have to be submitted with the claim form in case of accidental or unnatural death. The insurance company may also insist on a copy of the post-mortem report.
  • In the case, the person has died due to some illness or pandemic, the hospital record and hospital certificate will have to be attached with the claim form and the other documents as stated in the first point.
  • In the case of Early Death (within 3 years of taking the policy), the insurance company insists on cremation certificate and an employment certificate as an additional documentation to be provided.
There are a couple of points to remember. Don’t wait too long after the death of the policyholder to file the claim. Before submitting the claim form, get an updated checklist of documents from the insurance company so that you are in sync. As stated earlier, take the help of your insurance agent to ensure a smooth process.

How to ensure that life insurance claims don’t get rejected

Life insurance claims can be rejected by the insurance company, either on technical grounds or on procedural grounds. Here are 5 common reasons for claim rejection, which you must proactively avoid.
  • Claims can be rejected due to information omission or commission. The policyholder may have disclosed false age and job details. Some dangers in the job or genetic risks may not have been adequately disclosed. These can be grounds for rejection.
  • Life policies can lapse due to delayed payment or non-payment of premiums. In the case of endowment policies, the insurance company is only obliged to pay the premiums with accumulated bonus back and can reject full-life claim.
  • It is always better to appoint a nominee or nominees for the life insurance policy. In the absence of nominee, the legal process will have to be followed to locate the rightful heir. This can be prolonged; so avoid that by a simple nomination.
  • Medical tests are mandatory so ensure that you give a detailed medical test and all notings are documented before you sign on the policy. A policy taken without a medical test can also be rejected.
  • There are certain explicit exclusions. Insurance company can reject the claim if the death is by suicide, drug overdose, accident under intoxication etc.
Last, but not the least, there are 2 principles to keep in mind. Firstly, avoid short cuts when taking the life policy so that your family does not have to go through financial trauma later. Secondly, when the policy holder dies, it is the responsibility of the family to approach the insurance company and not the other way round. A few basic steps on documentation and transparency while taking the policy can go a long way in making the process smoother.

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