How to Claim Term Life Insurance After Death?

Losing a loved one is emotionally challenging, and dealing with financial matters can feel overwhelming. Term insurance provides crucial financial protection for families, but the claims process can seem complex and intimidating.

This article will help you through every step of claiming term insurance after a policyholder's death, ensuring you understand the process, know your rights, and confidently navigate this difficult journey.

Who Can File a Term Insurance Claim?

The claim for a term insurance policy can typically be filed by the following:

1. Nominee or Beneficiary: The person named in the policy by the insured to receive the death benefit.

2. Legal Heir: The legal heir can claim the amount if no nominee is mentioned.

Scenario 1: Death Due to Medical Illness

If the policyholder passes away because of a medical condition, the insurance company will need specific documents to understand the situation better. Here’s what is typically required:

1. Doctor’s Statement: This is a letter from the doctor who last treated the policyholder. It should explain the medical condition that caused the death and include important details like the diagnosis, the treatment the policyholder received, and how everything led to their passing.

2. Proof of Treatment: This can include hospital records or treatment notes showing the care the policyholder received leading up to their death. Such documents should detail their time in the hospital, any tests performed, treatments they underwent, and how long they were being treated.

Scenario 2: Death Due to Accident or Unnatural Causes

When the policyholder dies from an accident or other unnatural reasons, the insurance company requires more comprehensive documentation, which often involves legal and police reports. Key documents include:

1. Registered Copy of the FIR (First Information Report): This is an important report filed with the police that outlines the details of the accident or incident that led to the death. It’s the starting point for any legal proceedings and is essential for establishing what happened.

2. Post-mortem Report: Also known as an autopsy report, a forensic pathologist prepares this document. It gives a detailed examination of the cause of death, determining whether it was due to injuries, trauma, or other factors related to unnatural deaths.

3. Police Investigation Report: This report summarises the police's findings during their investigation. It includes statements from witnesses, details about the incident, and the police's conclusions regarding how the death occurred.

By gathering these documents for either case, the insurance company can better assess the situation and make decisions regarding any claims.

Step 1: Inform the Insurance Company

The first step is to notify the insurance company about the policyholder’s death. This can be done by:

• Visiting the insurance company’s branch
• Contacting their customer care helpline
• Sending email

When notifying the insurer, provide basic details like the policyholder number, insured’s name, date of death and cause of death.

Step 2: Obtain the Death Certificate

Step 3: Fill Out the Claim Form

Most insurance companies have a standardised claim form. You can download this from their website or collect it from their branch office. Fill out the form carefully, providing accurate details such as:

• Policy number
• The insured’s name and date of death
• Cause of death
• Nominee’s contact and bank details

Step 4: Submit the Required Documents

Submit the completed claim form and all necessary documents to the insurance company. You can either:

• Visit the nearest branch to hand over the documents.
• Upload scanned copies on the insurer’s official website.

Step 5: Verification Process

Once the documents are submitted, the insurance company will verify them. The verification process includes:

• Cross-checking the documents
• Investigating the cause of death, especially in case of accidental or suspicious deaths

Step 6: Claim Settlement

The factors that you must keep in mind before knowing how to claim a life insurance policy after death are as follows:

• Check all the policy terms and conditions to ensure that the circumstance under which a policyholder has died is included. Also, review other conditions mentioned in the policy. 
• Verify if the policyholder has declared all their pre-existing medical conditions. This is essential because if insurance providers discover hidden medical conditions, they will reject your claim.
• Ensure you correctly fill out the claim form without any mistakes or errors. Otherwise, insurance companies can reject your claim upon noticing it during verification. 

However, before raising a claim, you must meet some essential conditions to get approval.

1. Contact the Insurer

2. Approach the Insurance Ombudsman

If you cannot resolve the issue directly with the insurance company, the next step is to escalate the matter. You can file a complaint with the Insurance Ombudsman. This is a free service that helps consumers address grievances against insurance providers.

Gather all relevant details and documents about your claim before you file a complaint to ensure a smooth process.

3. Legal Action

Claiming term insurance after a loved one's death is a crucial step to secure the family's financial future. Understanding the process, organising the necessary documents, and keeping the policy details in order can ensure a smooth claims experience.

When purchasing a term insurance policy, consider the insurer’s claim settlement ratio (CSR). The CSR indicates the percentage of claims settled by the insurer out of the total claims received in a year. A higher CSR reflects the insurer’s reliability.

Lastly, always communicate openly with the insurance company, follow the prescribed steps, and stay informed about your policy to avoid complications. Term insurance is a family lifeline; timely action can provide much-needed support during difficult times.