Term Insurance Claim Process: A Step-by-Step Guide

Have you ever wondered what happens when you need to claim on your term insurance policy? It may appear difficult, but understanding the process may make it easier and less stressful. Term insurance products are meant to offer financial protection for your loved ones in the event of your untimely death. However, understanding the proper processes for claiming life insurance coverage is critical. This tutorial will help you through the step-by-step process so you can manage the claim confidently and easily.

Step-by-step guide to claiming a term insurance policy

1. Intimation of claim

• The first step in the term insurance plan is to inform the insurance company about the insured person’s death. This can be done by the nominee or any close relative.
• The intimation should necessarily include the policy number, the name of the policyholder, the date of the policyholder’s demise, and the cause of such demise.
• This should be done as early as possible to ensure that there are no hitches in the process of the claim.
• All the insurers provide many ways to submit intimation, which includes online complaints, through the mail, registered mobile number or directly visiting the branch office.

2. Collection of necessary documents

• After the claim is intimated, collect all your documents that would be useful. This usually consists of the policy document at the time of entering the policy, the death certificate and the claims form given by the insurer.
• This may include a photocopy of the insured’s identification proof, the records of the medical treatment in the event of death due to an illness, and such other documents as may be required by the insurer.
• All documents should be available so that the time taken to process the claim is reduced.

3. Submission of claim form

• Complete the claim form as detailed as possible and enclose the gathered documents to the insurance company.
• The claim form will contain information about the policyholder, nominee, and the circumstances of death.
• Make sure that all the information provided is accurate and comprehensive so that problems do not arise during the time of claim.

4. Verification of claim documents

• After submitting the claim form and the documents, the insurance company is supposed to validate them.
• This involves, for instance, questioning the validity of the death certificate and other papers presented.
• The insurer may also carry out a background check to verify the information given by the applicant.

5. Processing of claim

• On approval the claim is handled by the insurance company’s claims division.
• This requires going through the policy terms, and conditions as well as the cause of death to determine whether it falls under the policy.
• To this, the insurer may ask for more information or documents from the applicant if necessary.

6. Settlement of claim

• The insurance company will pay the claim after successful verification and processing of the same.
• The money that has to be paid in case of the death of the insured is known as the ‘settlement amount’ or ‘sum assured,’ which will be payable to the nominee or legal heir as provided by the policy.
• The payment may be made by cheque, bank transfer, or any other mode that the nominee may wish.

7. Handling rejections

• At times, a claim may be denied due to lack of disclosure of some facts, policy voids and inconsistencies in the documents.
• The insurer shall give the nominee grounds for rejection, and the nominee may be allowed to present further evidence or details.
• This is because if any issues are likely to be raised by the insurer, they must be responded to promptly to try and settle the claim.

8. Seeking legal assistance

• If the claim is rejected and the nominee feels that he/she has been unfairly treated, then he/she can consult a lawyer.
• A legal professional should be sought to explain the nominee’s legal options and the process that should be followed when appealing against rejection.
• There are often legal solutions to the claim’s outcome which can be beneficial in the end.

9. Review of policy terms

• Before making a claim, check the details of the policy and the terms and conditions to understand the steps one has to go through to make a claim and whether one qualifies for it.
• A client needs to be aware of the policy limitations such as exclusions, waiting periods and all other clauses that may render a claim invalid.
• It can also assist the nominee if there are some issues arising in the settlement of the claim.

10. Communication with insurer

• Always stay in touch with the insurance company regarding the claim.
• Ensure you reply to any queries or further information requests that the insurer may make in good time.
• The following are some of the ways through which communication can help in the fast and smooth processing of the claim:

11. Use of online tools

• Many insurers offer online claim tracking tools to keep nominees informed about the status of their claims.
• Using these tools can yield real-time information and minimise the follow-ups that may be done with the insurer.
• It also provides an advantage of an online platform where you can submit any document and follow the progress of the claim.

12. Keeping records

• Keep photocopies of all documents which have been given and received concerning the claim.
• The documentation of communication made with the insurer through emails and letters should also be taken.
• It can also be of help when there are some controversies or questions that come up at a later date.

13. Understanding grievance redressal

• Understanding the insurer’s grievance redressal method is crucial for nominees experiencing issues during the claim process. 
• Each insurance company has a method for handling complaints and resolving issues. 
• Using this system can aid in settling disagreements peacefully.

Navigating the term insurance claim procedure in India may appear complicated, but with the proper knowledge and preparation, it may be simple. By taking these measures, nominees can assure a seamless and speedy claim payment, giving the financial protection envisioned by the life insurance policy. Remember, good communication, correct paperwork, and an understanding of your rights are essential for a successful claim procedure.