Life Claims

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Chapter Eight

Claims


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Objectives

Understand what a claim is

Understand the role of an agent in settling theclaim

Know about the main types of claims Understand the difference between death and

maturity claim

Know the various documents required in

death and maturity claim Understand the settlement procedure of

death and maturity claim


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CLAIMS

A claim is a demand by the policyholder for fulfillment ofthe promise made by the insurer at the time of making

the contract.

These would differ under each policy.

The insurer should find out: Whether,

Policy holder has performed his part. which means what

is the status of the policy--full force, paid up, or lapsed

Insured event has taken place. Maturity or Death

Who are entitled to demand claim payment

.Nominee/ Assignee/Income Tax Notice/ Prohibitory

Orders /Official Assignees Notice etc.


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Maturity Claims

Sum

Assured

Bonuses

if any

Loan and

Interest or

Outstanding

Premiums

The Date on which the Term is complete is the date

of maturity and settlement of Sum Assured on that date

is called Maturity Claim

Insurer usually sends advance intimations regarding

the maturity of the policy

Maturity Claim


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Maturity Claims

The insurer has to satisfy that

There are no Assignments

The identity of the Policyholder is proved

The Age stands admitted

The premiums are all Paid(Not Required for a paid up policy)

The original policy is handed in

The discharge voucher is duly completed


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Maturity Claims

The insurer is expected to make

payments on the maturity date

Post dated cheques are sent in advance

after the duly signed discharge voucher

is received


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Difficulties encountered in

settling the claim

The claim can be

settled by taking anindemnitybond

and a copy of

advertisement in the

newspaper

The policyproceeds

will be paid to thetrustee or to the

beneficiaries if theyare competent tocontract

The payment will

be made to the

assignee. In case of

conditional

assignment if the title

has reverted to the lifeassured he can also

receive

the payment directly

The original

policy

is reported lost

The policy is

covered under

MWP ACT

The policy is under

Absolute

Assignment


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Survival Benefit Payments--

Moneyback plans

Survival Benefits are paid under moneyback plans

during the currency of the policybefore the date of

maturity

Action is initiated by the insurer and the post dated

cheques are sent to the customer

If the policy is lost an indemnitybond will not suffice as the policystill exists. Instead a duly endorsed duplicate policy is issued

If the life assured dies after the survival benefit due date but before

it is settled survival benefit will be paid to the legal heirs and death

benefit will be paid to the nominee


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Death Claim

Settling death claim is more complicated thanMaturity claims

The death claim action begins with theintimation being received in the insurersoffice

The intimation may be sent by nominee,assignee, a relative of life assured ,theemployer ,agent ,or development officer


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Death Claim

The office need not wait for the intimation of

the claim. Obituary columns and newspaper

reports in case of accidents or air crashes

may give the required information

Obituary


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Documents required to settle a death

claim

Policy Document

Assignment or

Reassignment

Deed

Proof of Age,

if already not

admitted

Certificate of Death

Legal Evidence

of Title ,if no

assignment or

nomination

Form ofDischarge

executed and

witnessed


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Documentation for Early Claim

If the death claim occurs within 3 years from theDate of commencement or revival the followingadditional Documents are required

Statement from the last medical attendant giving

details of last illness and treatment

Statement from the hospital, if the deceased had

been admitted to hospital

Statement from the person who had attended lastrites and had seen the dead body

Statement from the employer, if the deceased was

employed showing details of leave


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Unnatural Death

Accident, suicide,or unknown causes the

following documents would be required

Police Inquest Report

Panchnama

Chemical Analyzers Report

Postmortem

ReportCoroners Report


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Early Claims

Claims arising within 3 years are looked at with

suspicion because as there could be suppression

of material facts which if found true would result

in repudiation of claim

When the policy is revived on the basis of

evidence of good health during underwriters

scrutiny, an early claim in this scenario would

raise the same issues as above


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Disputes

In case of repudiation of claim the customer

may go to the court

The court is more sympathetic to thepolicyholder and the insurer may be asked to

prove the suppression of facts

Insurer may fail to submit enough evidenceand may still end up paying the claim


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Disputes

The Insurer despite these inconveniencesstill prefers to do the enquirybecause itprevents anybody from taking undueadvantage of the insurer

Also it helps improve the underwritingstandards and also helps point out agentand regions more prone to claims


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Proof of Title

In case of no valid nomination or assignment the

claimant would have to prove his title

Title is proved through legal procedures likeprobate of will, succession certificates

If the amount of claim is not large insurers may

waive the proof of title and settle the claims on

the basis of declaration, affidavits and Indemnity

Bonds


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Proof of death

Proof of Death is an important document

A death certificate issued by the municipal office or similarlocal body is the acceptable proof of death

A certificate from burial cremation is also acceptable

Statements from witnesses of the last rites can be used asthe supporting evidence

In case the body is not found the statement from competent

authorities with relevant information is acceptable

In case of defense personnel ,the statement from thecommanding officer maybe obtained


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Presumption of Death

As per Indian Evidence Act a presumption ofdeath can be made if a person is not heard of fora period of seven years

If the nominee or claimant of such a person claimhim to be missing and ask him to be presumed as

dead then the insurer asks for a decree fromcourt of presumption of death


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Precautions- if the person is Lunatic

As per the Indian Lunacy Act if the personis mentally deranged , a guardian has tobe appointed by the court of law tomanage the properties of the lunatic and

in that case claim will be paid to the legalguardian.

In case the person has recovered from themental disorder a medical certificate isrequired.


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Precautions

Any order from the court or any otherjudicialauthority has to be respected by the insurer

The claimant however can contest these with the

court


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Precautions

If life assured dies before the maturity date,the

claim has to be treated as a death claim and

processed accordingly.

If the assured has died after the maturity date but

before the receipt is discharged, the claim has to

be treated as the maturity claim and paid to the

legal heirs. Death Certificate and evidence of titlewould be required


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Precautions

Payment of claim amount to non resident Indians

are governed by the Foreign Exchange Control

Regulations

If a policy is financed through funds of Hindu

Undivided Family, the policybelongs to the HUF

and the policy moneys will be paid to the Karta of

HUF


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Accident and Disability Benefits

These benefits are conditional on conclusive

evidence

All the eligibility conditions must be present

and the exclusions must not apply


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Conditions

The accident must be caused by outward,violent means not self inflicted

The death must be result of injuries causedby that accident

The death must occur within 120 days or such other period as may be specified


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Exclusions

Intentional selfinjury, attemptedsuicide, insanity, immorality, intoxication

Accident while engaged in civil aviationor aeronautics ,other than as apassenger

Injuries resulting from riots, civilcommotion etc


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Claim Concession

It happens sometimes that even

though the policy has lapsed still the

claim is paid in full


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Claim Concession

After three years ,if the death claim arises withinsix months from the date of lapse

Date of LapseDate of Death

Within 6 Months

Full Sum Assured-Outstanding Premiums with Interest


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Claim Concession

After Five years ,if the death claim arises within 1

year from the date of lapse

Date of LapseDate of Death

Within 1 year

Full Sum Assured-Outstanding Premiums with Interest


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IRDA Regulations

The insurer should ask for all requirements in the case of aclaim at one time and not piecemeal

The decision to admit or to repudiate shouldbe made 30days of receipt of papers

If an investigation is necessary ,it should be completedwithin 6 months

Interest at 2% over the bank rate will be payable for the

delays in settling the death claims

Interest at the savings Bank rate will be paid if the insurer isready to paybut the claimants are not ready to collect


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Key Learnings

Claims are the fulfillment of the obligation entered into by

the insurer when the policy is taken out

A claim is called a death claim if the life assured dies while

the policy is in force

Survival benefit claims are partial maturity claims

Death claims get time barred after three years

In case of death due to unnatural cause and early claims,

the documentation required is more


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Thank You