You’ve been through a very bad period, and a loved one has just passed away. It’s during these very traumatic and trying times that you have to get involved with that great bugbear – life insurance. Or the benefit from the recently deceased.
While this insurance may help you to tide over the trying financial and other times that you, the survivors, will undoubtedly face, please keep an eagle eye open that the paperwork is done as per norms, so that times that are already trying do not become more so.
“Having life insurance is only half the job done,” says Anup Seth, Chief Distribution Officer, Edelweiss Life Insurance. The real purpose of the policy is fulfilled only when your loved ones can easily access it and claim the benefit when needed.
“It (claiming the life insurance sum) is often a difficult time for nominees, and truly the moment of truth for life insurers,” says Rajesh Krishnan, Chief Operations and Customer Experience Officer, Bajaj Allianz Life Insurance.
“The most common errors (that LI claimants make) are incomplete claims forms, or giving outdated contact details,” says Rakesh Goyal, Director, Probus.
People also forget to attach required documents, for example, the original policy bond or proof of bank account, leading to follow-ups or a second round of paperwork to obtain documents that are mandatory to submit their claim.
In cases of accidental or unnatural deaths, omission of police records or hospital discharge summaries would lead to further delays in processing.
In some cases, families make mistakes with respect to the cause, date, or both, of the death because they were confused about what occurred, increasing likely unnecessary complications. “Beneficiaries should be careful not to submit photocopies without appropriate attestations as well,” says Goyal.
Even from the point of view of the management of the life insurance policy, too, some mistakes may lead to the rejection or postponement of the policy benefits to the successors.
“Non-payment of premiums or delaying paying premiums, leading to the policy lapsing or reduced benefits,” says Seth.
At the policy purchase stage, concealing information related to health issues/ financial conditions often surfaces during claim investigations, creating grounds for rejection.
Another point is not informing the insurer if the nominee passes away or if other changes to the policy that may occur.
As in all asset classes, for insurance, too, certain documentation has to be filled out carefully.
At the time of purchase of the policy, be very careful with the nominee details. Make sure the nominee’s name is written exactly as it appears in their KYC document. Even a small mismatch—such as a different spelling, initials, or date of birth—can cause delays during claim settlement.
Also, contact details. Always update your correct mobile number and email ID. This ensures the insurer can reach you with policy updates and premium reminders so that there is no lapse or gap in the policy, and the claim processing becomes smoother.
When claiming life insurance policy benefits, beneficiaries usually must submit the following documents, such as a duly filled claim form, original policy document, death certificate, and bank account details for payment.
Additionally, if it were a hospital death or an accidental death, the beneficiaries may also have to submit medical records, FIR, or post-mortem reports.
“Most insurers will request an original death certificate from the issuing municipality because it is the primary proof of death. In practice, most insurers will accept a certified or notarized copy as long as the copy has been attested via a statement of a gazetted officer or notary public,” says Goyal.
In addition, it is possible that the insurance company will also request a certified copy for their file, depending on the insurance company you are dealing with.
“Sometimes, insurers may ask for additional papers such as medical records, employer certificates, or, in accidental/unnatural cases, FIR and post-mortem reports may be needed,” says Krishnan.
He also noted that during natural calamities or disasters, such as in Punjab recently, some insurance companies took proactive steps to simplify the process by relaxing certain document requirements and providing faster claim settlements to ease the burden on nominees.
The one positive aspect in these terrible times is that the timeframe for getting the paperwork underway is flexible, though obviously it is in your (the beneficiaries’) interest to start the claims process at the earliest.
It is a misconception that there are rigid timelines to file/notify for a claim. “Insurers cannot reject claims solely due to delay in intimation during bereavement as it affects decision-making capacity during these challenging times,” says Seth.
The majority of life insurers in India advise families to report claims as soon as possible, usually within a 30-day period from the date of death of the policyholder. However, 30 days is not a strict cut-off, and insurers can’t reject a claim simply because the claim intimation has been made late. “But if one files the claims after a few months, insurers might ask for the explanation for the delay,” says Goyal.
“Thus, it is important to talk to your loved ones and ensure that, when the time comes, they can access this financial safety net easily to meet their aspirations in your absence,” says Seth.
Your recourse in case life insurance claims are delayed or rejected
“If the claim is rejected, the insurer will provide a written explanation for the decision, opening multiple avenues for appeal,” says Seth.
At that time, beneficiaries can then file complaints via:
First, the Company’s Grievance Process. The beneficiary can file a complaint directly with their insurer, who is required to investigate and resolve it within a specified timeframe.
Should you be dissatisfied with the outcome, most companies have an escalation process that includes contacting their Grievance Redressal Officer, who is dedicated to handling these issues.
The Grievance Redressal Officer’s contact details will be available on the claim repudiation letter and the insurer’s website. If not satisfied, escalate through the IRDAI Bima Bharosa Portal.
Next, the Ombudsman. If the company’s response does not meet your expectations, you can approach the Insurance Ombudsman, an independent authority set up to resolve disputes between policyholders and insurance companies. The Ombudsman’s decisions are binding on the insurer, ensuring a fair and impartial resolution.
Finally, the IRDAI. The IRDAI (Insurance Regulatory and Development Authority of India) requires insurers to address grievances within 2 weeks. If you do not receive a response or are unsatisfied, you can escalate the matter to the IRDAI’s grievance redressal cell, which oversees the insurance industry and ensures consumer rights are upheld.
The insurer’s perspective
“From an insurer’s perspective, the three key steps in administering a life insurance claim are verification, assessment, and settlement,” informs Goyal.
Verification commences with corroborating the death certificate, the policy specifications, and identifying the claimant.
Assessment includes resolving any concerns regarding premium payments, addressing any issues regarding material non-disclosure, and confirming the data in the insurance company’s databases against public databases to avoid fraud.
Settlement instructions are processed electronically into the claimant’s bank account once all of these aspects are settled.
The IRDAI requires claims settlements, after submitting all documents, to be completed within 30 days or pay interest for delays.
Manik Kumar Malakar is a personal finance writer.
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