life claims
TRANSCRIPT
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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