Get 1 Cr. Life cover at 16 a day*
The term insurance plan is the most simple and purest form of life insurance. The policyholder can get a large amount of sum assured, i.e., life cover at a relatively nominal premium rate. In other words, it provides financial support to the policyholder's family in case of his demise.
Sometimes, a policyholder is the sole bread earner of the family. In that case, the death of that person results in turmoil in the family, and they may have to face a financial crunch. Here, the term insurance plan comes in handy. Hence, the sole reason for buying term insurance is that the policyholder's family, i.e., dependents or nominees, have ample resources that would make up for the loss of income in case of the policyholder's sudden death.
The term insurance claim is filed by the nominee to the insurance company to get the death benefit in case of the policyholder’s unfortunate death. Most insurance companies offer a seamless claim facility so that the beneficiary can file a claim easily.
There are three steps of a process for term Insurance plans:
The following documents are a must to be submitted to the insurer for a death claim:-
There can be other documents required by the policy provider company. It depends on case to case basis.
As per the norms of the IRDAI of India, all insurance companies must settle the claim within a specified time. The claim should be settled within 30 days from the beneficiary's submission of the claim form. In case the claim needs further investigation, the insurer is required to complete the entire process within 6 months from the date of receiving the written intimation of the claim.
If a policyholder does not inform of pre-existing disease or treatment undertaken, or injury that had symptoms before the commencement/revival of term insurance policy, it is mandatory for the insurer to pay the death claim.
If it is proved by law that the nominee is indirectly or directly linked in the murder of the policyholder, then the insurance company will reject the death benefit claim.
Insurance providers can refuse to provide claims to habitual drinkers and drug abusers. It may be that drinking or drug addiction is hidden from the insurer when buying a policy. If the policyholder dies in a road or another accident in a state of being drunk or having drugs, the insurance claim may be rejected.
If the policyholder meets a fatal accident while participating in adventure sports such as bungee jumping, sky or water diving, sports racing, water rafting, paragliding, etc., death in such activities may not be covered by the term insurance provider.
If a female policyholder doesn't inform about her pregnancy and dies during childbirth and complications related to childbirth, then the policy provider company will not pay the death claim.
For suicides committed within 12 months from the date of receipt of the policy or revival of the policy, 80% of the premiums paid will be returned to the nominee. Since every plan has different terms for suicide, so one must check with the insurance company.
*This list is only indicative and not exhaustive. Different term insurance plans have different exclusions.
The following are the reasons which lead to term insurance claim rejection.
Nominee information left out: After the policyholder's death, all death benefits will be paid to the nominee of the policy. So, it is important to enter all the nominee related information correctly and keep their details like contact information, address, etc. updated with the company to avoid last-minute hassles and rejection of term insurance claims.
Also, one should choose their nominee wisely. A married policyholder can choose their spouse or children, whereas for a single person, nominating one's parents would be better. If the nominee is a child (minor), then guardian information is also required.
*Tax benefits are subject to change under tax laws.