Settlement of Insurance Claims

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A claim is a demand that the Insurer should redeem the promise made in the Insurance Contract.  The insurer has to settle the claim after satisfying himself that all the conditions and requirements for settlement have been complied with.  In particular

  • Whether insured event has taken place?
  • Whether the obligations assumed under the contract have been performed?
  • Whether the policy is in force at the time of the event has taken place?

LIFE INSURANCE CLAIMS PROCEDURE:

[A] Maturity Claims: 

The full sum assured along with accrued bonus amount is to be paid when the term of the policy is over i.e. date of maturity less any loan & interest or outstanding premium if any.  Before making payment the insurer has to satisfy that

  • There is no assignment.
  • Whether the age is admitted?
  • Whether the policy was in force up to the end or in paid-up condition or totally lapsed? In the case of “Paid-up” only paid up value will be paid.

(iv)   Whether original policy bond along with discharge voucher duly stamped & signed is received?

  • In the case of absolute assignment, the payment has to be made to the assignee. In  MWP Act policies, the payment will be paid to the trustees if the beneficiary is minor at the time of maturity of Policy.
  • If the policy is reported to be lost, Insurer may settle the claim on the basis of an Indemnity.

[b]DEATH CLAIM SETTLEMENT :

The death claim action begins with an intimation being received in the Insurer’s Office.  The following will be necessary before a death claim can be settled.

  • Policy document.
  • Proof of Age if age is not already admitted.
  • Certificate of death from Municipal Broad Office.
  • Legal evidence of the title if the policy is not nominated or assigned.
  • FA form of discharge duly signed and witnessed.
  • If the claim has occurred within 3 years of Policy commencement or from revival date following additional requirements are there.
  • Certificate from last Medical Attendant or Hospital.
  • Two witnesses who had attended last rites.
  • Last five years leave record if the deceased was in service.
  • If there is unnatural death; such as accidental death; or by suicide – Post Mortem Report, Panchnama & Final Report of Policy is also required.
  • Sometimes a person is reported missing without any information about his whereabouts. In such cases Indian evidence act provides for presumptions of death after seven years waiting if he did not return. In such cases decree from a court is necessary after waiting for seven years; and policy should be kept in-force by paying premiums.

Death claims are source of fraud as well.  Therefore, Insurers are more cautious.

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