How to Claim Term Insurance After Death?
Learn how to claim term insurance after the death of the policyholder with this comprehensive guide.
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Term Insurance is a type of life insurance plan that offers a death benefit to the policyholder’s beneficiaries in case the policyholder passes away during the policy duration. For this coverage, the policyholder has to make a payment of a fixed amount known as the premium amount on a timely basis. In case of a policyholder's demise, the family members will have to raise a claim to avail the sum assured. This article will tell you all about how to claim Term Insurance (TI).
Stepwise process explaining how to claim Term Insurance after policyholder’s death
Here’s a list of steps that are needed to be followed by the beneficiary to claim the death benefits after the death of the policyholder. Note that this is an overview, exact steps and the process will depend upon the insurer.
Step 1: Notifying the insurer
This is the first step that the beneficiaries have to do in order to claim a death benefit.
The beneficiary can use the customer service number, or visit the branch or email to the respective insurance provider to inform the demise of the policyholder.
The beneficiary will be requested to disclose the name, latest address, date of birth and reason for the death of the policyholder. The name, contact details, and how the beneficiary is related to the policyholder has to be also cleared out.
Not just that, the beneficiary is also expected to know the policy number (which will be found in the policy documents) and other relevant documents needed to file a claim. In some cases, the insurance provider may ask for an original death certificate to validate the death.
Notification regarding the death of the policyholder, has to be made within the time limit set by the insurance company. However, this limit may differ from company to company. The time limit followed by most of the insurance companies is usually 30 days from the date of death of the policyholder.
Step 2: Fill out and submit the death claim form
The death claim form has to be duly filled in all aspects, with regard to name, age, reason for death of the policyholder and other relevant information as required by the insurance company.
Keeping all the necessary documents in hand, will ease the process of filing the death claim form.
If there are no beneficiaries assigned, then the claimant has to provide a proof to state that they are legally entitled to receive the claim.
Once all the necessary details are filled in, it is time to submit the form. The beneficiaries can submit the form, either by heading to the home branch where the policy was issued or through online mode, if available.
Step 3: Submit all the relevant documents
All the required documents requested by the insurance provider have to be submitted to further continue the claim process.
The documents needed will depend on the kind of death undergone.
Step 4: Evaluation of the claim by the insurance company
Once the insurance company receives all the documents needed, they will start with the process of evaluating and analysing the documents.
The insurance company will verify all the documents submitted, which might include medical reports, police records and other necessary documents.
The evaluation process of each kind of death will be different. For example, detailed investigation time may be required if the policyholder has died within 3 years of buying the policy.
It is at this stage when the insurance company will decide if the claim had to be settled or rejected. If the claim is accepted, the insurance company will payout the death benefit. If not, the reason for the rejection will be stated.
Step 5: Settlement of the death Claim
After the claim has been accepted, the insurance company will settle the claim amount to the beneficiary either in lump sum or in instalments, with regard to terms and conditions.
This claim amount will then be deposited to the bank account of the beneficiary directly.
What happens if the policyholder survives the term?
If the policyholder outlives the term, no payouts will be made (unless there’s a Return of Premium add-on as a part of the coverage) and the policyholder will have to renounce the coverage.
What are the types of deaths covered by Term Insurance plans?
Not all kinds of death are allowed to be claimed under the Term Insurance plan. Here’s a generic list of deaths which will and which will not be covered in Term Insurance plans, exact list will depend upon the exact policy’s terms and conditions.
Deaths covered under Term Insurance plans
Natural death/medical condition
Accidental Death
Deaths due to pre-existing diseases (declared at the time of buying the policy)
Deaths due to critical illness
Health-related death
Deaths due to COVID-19
Death by suicide
Deaths not covered under Term Insurance plans
Death due to indulging in illegal activity
Deaths due to pre-existing diseases (not declared at the time of buying the policy)
Death due to driving under the influence of alcohol/drugs
Self-inflicted injuries
Death due to suicide
Death due to indulging in hazardous activities
Death due to taking part in adventurous sports (if not informed while purchasing the policy or don't have a respective add-on)
Death due to childbirth or complications in pregnancy
Death due to sexually transmitted diseases (like HIV)
Death due to intoxication
Natural disaster
What are the documents required to file a claim after a policyholder's death?
These are the set of documents that are to be submitted by the beneficiaries in order to claim for the benefits of the Term insurance, disregarding the type of death met.
Original policy documents
Correctly filled claim form
Original death certificate, either signed by the medical practitioner or issued by the government civil authority
Statement from the beneficiary, with regards to details about themselves and the policyholder.
Identity proof of the beneficiary (Aadhaar Card, Voter ID, PAN Card, Passport, etc.)
Age proof of the policyholder
Cancelled cheque and NEFT mandate
Not just these, there might be additional documents required as per the cause of death.
Case 1: If the policyholder had died due to medical illness
Doctor’s statement
Proof for the treatment taken at the hospital
Case 2: If the policyholder had died due to accident or unnatural death (murder, etc.)
Registered copy of the FIR (First information report)
Post-mortem report
Police investigation report
What are the reasons for the insurance claims to get rejected?
Here are the common reasons for insurance claims to get rejected.
Contradicting information
Falsifying Information
Delay in premium payment
No mention of nominee
Undisclosed medical records
Undisclosed previous/existing insurance policies
Lapsed policy
Frequently Asked Questions
Here’s a list of FAQs associated with how to claim Term Insurance after a policyholder's death.
Are there tax benefits for the premium amount paid by the policyholder for a Term Insurance Plan?
Yes, the policyholder can avail tax exemption up to one and a half lakh rupees as per applicable terms and conditions.
Can I get money back if I survive the term in Term Insurance plan?
If you have opted for a Return Of premium rider, then you will be qualified to get back the premiums paid.
Will I be able to take a loan on the Term Insurance Plan I opted for?
No, since such plans do not offer a cash value component at the time of maturity.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
