How To Claim Your Life Insurance Policy In India

2024-08-02

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Insurance Industry in India

In 1956, all Indian life insurance companies were nationalized to form LIC. This was done to protect the interests of the policyholders and boost penetration. But penetration remained low for the next 50 years - after which the clock was turned back and the sector was privatized again. In 2003, the share of the private sector in Life Insurance was 3%. In 2019, it has increased to 33.5%.

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The budget of 2019 approved Foreign Direct Investment of up to 100% in insurance intermediaries. This is expected to attract investments to the tune of billions of dollars.

The annual report by the Insurance Regulatory and Development Authority has shown that India was ranked 41st in the world in terms of insurance premiums. This is both a good thing and a bad thing. It’s a bad thing because it means millions of Indians are unprepared for future financial emergencies. It’s a good thing because it means there is enormous potential for growth.

How to Claim your Life Insurance Policy in India

Life insurance benefits come as a breather in difficult times. Life insurance forms an important part of anyone’s support system during trying times. Understandably, upon the death of a loved one, claiming a life insurance policy is the last thing on anyone’s minds. These days, life insurers are empathetic to the needs of customers and are crafting policies with simplified claim settlement processes that are completely hassle-free for the family of the deceased. Thus, when choosing a particular insurance provider, one should keep in mind the claim settlement process they would be subjected to.

Learn about - Insurance Claim

As the Insurance Regulatory and Development Authority In India notes, there are 24 insurance companies in India. The claim settlement process can differ from company to company, but the basics broadly remain the same.

The industry as a whole has tried to create a uniform process for the convenience of all policyholders. If you need to claim your life insurance policy, you can follow the below steps for a swift and frictionless process.

Inform your insurance company: The first step is to inform your insurance company. To provide expedited service to their customers, insurance companies prefer to be informed at the earliest. This is beneficial to the claimants as their claims are then processed faster.
Fill in the claim form: A claim form needs to be submitted with detailed information. The most important advice anyone can give you is to not leave out any details while filling out the claim form. This can lead to outright rejection of your claim.
Provide the following documents: One of the common reasons a life insurance claim is not settled on time is because the claimant doesn't submit all the necessary documents. Therefore ensure that you keep the following documents handy for a swift settlement
- Death Certificate: This certificate is to be collected from the registrar - it contains important information like the time, location, and cause of a person's demise.
- ID proof of the beneficiary: To ensure the payouts reach the person they are intended for, the insurance company requests the ID proof of the beneficiary.
- Insurance policy papers: To ensure there is no discrepancy between the actual terms of the insurance policy and the expectations of the beneficiaries, the policy documents need to be submitted alongside the claim.
- Discharge form: If the individual was hospitalised before passing away, a discharge form is needed to show the person is no longer under observation.
- Postmortem report: This is required in case of unnatural death.
- Hospital records: The insurance payouts may differ according to the manner of death and whether it was preceded by hospitalization - therefore, hospital records help the insurance providers paint a better picture of what happened.
Provide additional information if and when required: If your policy has additional benefits in the form of riders, then some extra information may be required.
Claim settlement: Once you follow all the above steps, your claim should be processed soon. The claim settlement ratio in India is quite healthy - it has hovered around 97% for the past few years.

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