Life insurance is an expression of love and care towards one’s loved ones. Life insurance cannot replace the deceased but through the death benefit, it provides financial security to the family.
The claims management ability of an insurance company plays a pivotal role in the decision making process of the customers opting for a life insurance policy. This makes an insurance company’s claims fulfilment process an important yardstick to measure its performance.
For smooth and speedy payout of claims, the beneficiary must keep in mind the following in order to help the life insurance company to speed up the claim process:
- Informing the life insurance company
The first stage of the claims process involves the notification to the insurance company about the death of the life insured. This is known as claim intimation. It can be initiated by visiting the branch/office of the life insurance company or by sending an email to the company. The claim intimation consists of basic information such as the policy number, name of the insured, date of death, cause of death, place of death, name of the claimant, claimant’s relationship with the insured, etc. This only kicks off the claim process and is not the entire claim process in itself.
- Things needed when filing a claim
The claimant must submit the death certificate issued by the Municipal Corporation / Gram Panchayat. This is a mandatory requirement. There are other additional claim requirements viz: duly filled claim forms which are provided by the life insurance company and the original insurance policy documents that need to be submitted to enable the life insurance company to process the claim. The claimant must provide his/her photographs, address proof and the photo identity proof. By way of credentials, insurance companies expect the claimant to provide additional supporting documents like the bank account statement thereby ensuring the claim money is paid to the rightful beneficiary.
In addition to the requirements mentioned above, some insurance companies may seek additional documents on case specific basis depending on the type of claim, cause and circumstances of death. All requirements will be in adherence to internal and industry guidelines.
All the documents must be in original or photocopies attested by the relevant authority such as an SEM, Magistrate, Gazetted Officer or a person of local standing like the Police Sub-Inspector or authorised members from the insurance company.
- Time limit for submitting claims
Although there is no time limit specified for submitting the claim, it is best to initiate the claim at the earliest to avoid problems and undue delays. The claims process is primarily a matter of submitting requisite documents in the manner prescribed by the insurance company. If the documentation is in order, claims are processed without undue delays.
Nonetheless, the claimant can follow up with the insurance company with the policy number or the claim number given to him/her at the time of submitting the claim. Beneficiaries can also check the claim status online on the website of the respective insurance companies.
- Timelines for claim processing
As per IRDA guidelines, insurance companies must process claims within 30 days post receipt of all the necessary documents on the basis of which the claim can be decided. However, some companies might do it even sooner based on internal guidelines, thereby creating industry benchmarks; some companies today promise settlement of claims in durations as short as 7 or 8 days. However, this guarantee starts from the day of submission of all the necessary documents. If not settled within the promised timelines, the customers are paid interest as specified in the company policy.
There are times when the circumstances of a claim warrant an investigation in the opinion of the insurance company. The insurance company in such cases is expected to initiate and complete such investigation at the earliest, in any case not later than 6 months from the time of lodging the claim.
- Grievance redressal mechanism
There is a formal mechanism to handle policyholders’ grievances – at the primary level the policy holders can file their complaints with the respective insurance companies. In case if the policy holder is not satisfied with the company decision, he /she can approach IRDA’s Integrated Grievance Management System (IGMS), a tool to monitor insurance companies’ customer grievance and carry out root cause analysis to identify systemic and policy related issues. Over and above this, the policyholder can also approach the consumer court and insurance ombudsman in case if the aforementioned options do not work.
There is sufficient regulatory governance around the claims handling process and there are a set guidelines for insurance companies to follow. Life Insurance companies also continue to infuse operational efficiencies on their part to simplify and expedite the claims processes. This makes it easy for customers to access this information and make informed choices for themselves. It is also important on the part of the customers to make all the rightful disclosures at the proposal stage so that the beneficiaries do not face any inconvenience at the time of making the claim.