Procedure involved in Death Claims in Life Insurance in India
The following are the general procedure involved in final settlement for death claims in India.
First of all, the nominee or the assignee or deceased life assured close relative will have to send a letter intimating death to insurer. The letter of intimation of death should contain the following information:
- a statement that the life assured is dead;
- the date of death;
- the cause of death;
- the place of death;
- policy number and name of the life assured; and
- name and full address of the sender of intimation.
2. Requirements /Documents
Once a proper intimation is received, the status of the policy is verified and the requirements are called for. The following are the usual requirements:
1. Policy Bond
Original policy bond of the life insured has to be produced.
Deed of Assignments or Re-assignments executed separately, if any has to be produced.
3. Age Proof
Proof of age, if age is not already admitted.
4. Certificate of Death
Normally all major towns have some sort of civic administration such as village panchayats, municipalities which keep records of births and deaths. These bodies issue properly documented death certificates. The problem may however be experienced in some rare cases. In such cases, insurers call for some additional documents depending upon the merits of the cases. The forms are called claim forms and are either numbered or have descriptive names. These are:
Employer’s certificate: In case the deceased was an employee, the employer is in position to pass on the information whatever is available with them.
Cremation letter: It is usually given by 2 persons of repute residing in the neighborhood certifying that they knew the deceased and attended the cremation / burial.
Last Medical Attendant Report: As the name suggests, their report with other supportive evidence can serve the purpose of death certificate issued by Registry.
5. Claimant form
The claimant form has to be signed by the nominee / assignee or legal heirs and sent to the insurer.
6. Additional Report
Where the life assured has died an unnatural death such as by an accident, suicide or due to an unknown cause, the insurer will need special requirement depending upon the nature of the case, such as:
For DAB Cases: First Information Report (FIR) and Post Mortem Report (PMR) to prove accident.
In case of murder of the life assured: FIR and the report that a legal case was initiated against the accused. Settlement of claim many wait till court’s decision.
7. Proof of Title
The claim is payable to the Nominee or the Assignee as the case may be. In case, the life assured has died without making an assignment or a nomination, the insurer would require legal evidence of title (proof of ownership). The following certificates may be considered as proof as the claimant’s title
- Probate of the will of the deceased assured,
- Succession certificate obtained on the strength of the will.
- Letters of Administration.
8. Presumption of death
By Sections 107 and 108 of the Indian Evidence Act, death may be presumed if it is proved that the life assured has not been heard of for seven years by those who would naturally have heard of him if he had been alive. Insurer would require an order of the Court in this connection. The courts generally presume death to have taken place at the end of seven years from the date of appearance.
9. Missing policy
In case, the policy cannot be produced and there is no reason to suppose that it has been dealt with in anyway, company can make the payment on completion of an indemnity. It should be noted that non-production of the policy is not in itself sufficient ground for refusing payment. But insurer has every right to satisfy itself about the bonafides of the case and it is the duty of the claimant to satisfy the insurer in this regard.
10. Rival claimant
As per Section 39 of the Insurance Act, a nominee has the right to receive the amount under Death claim. Suppose, insurer receives a letter from a person other than the nominee, he is called the rival claimant. In such cases, insurer will inform the rival claimant that amount will be paid to the nominee unless they are prohibited by an order of the court. If no court’s injunction is received within a specified period of, (say) 15 years the insurer will pay the claim to the nominee.
11. Early Claims
If the claim has arisen within a year or two from the risk date or revival, investigations are done by the office on receipt of the claim forms. If the investigations reveal that there was no fraud and no material fact was concealed at the time of proposal, the insurer would issue the necessary discharge forms for completion.
12. Agent ‘s Confidential Report
Immediately after learning about the death of the assured, the insurer will ask his agent to make a thorough inquiries into the matter at once and to report fully on the form supplied to him. The confidential report is intended to provide a confirmation of the death of the assured, date of death and cause of death.
3. Calculation of Claim amount
After having gone through all the documents mentioned above, if the claim is found correct and in order, the amount of claim to be paid is calculated. The calculation of claim amount is done exactly in the same manner as done under maturity claims, except that the amount of outstanding premiums for the current policy at the time of death is further deducted out of the claim amount.
4. Payment and Discharge
Finally, the insurer has to collect a completed and stamped discharge voucher from the nominee or assignee or legal heir of the deceased assured. Once the discharge voucher is received, the insurer shall proceed for payment of the claim. The claim amount to be paid is entered in the claim payment register and a cheque is sent to the claimant under registered cover.
- Procedure involved in Death Claims in Life Insurance in India
- 1. Intimation
- 2. Requirements /Documents
- 3. Calculation of Claim amount
- 4. Payment and Discharge