Life Insurance Claims Are To Be Paid In 30 Days
It’s important to understand the process of making a claim in a life insurance policy, especially for the nominee of a life insurance policy. Knowing the process and the documents to be submitted can save you a lot of trouble. But did you know that to make insurance claims more efficient, the insurance regulator has spelt out strict turnaround timelines on claims and penalty on violation, under the Protection of Policyholders’ Interests Regulations of 2017. Read for more details.
How to file a claimStart with filling the claim form, which can be downloaded from the insurer’s website or collected from the agent or the insurer’s office. The form asks for details such as policy number, date, time and cause of death of the policyholder, name of the nominee and bank account details. Other than the claim form, the nominee will also have to submit supporting documents such as the original policy papers, death certificate and medical records in case of natural death. In case of un-natural death that includes accidental death, murder and suicide, additional documents such as the first information report (FIR) and a postmortem report also need to be attached.
Also, the nominee needs to submit her Know Your Customers (KYC) details to the insurer. Do keep in mind that during calamities, insurers tend to waive the need for some of these documents.
Duty of the insurerAs per rules, a life insurer needs to process the claim without delay and if there are enquiries, they need to be raised together and not in a piece-meal manner. In fact, this needs to be done within a period of 15 days of the receipt of claim. The insurer has a window of 30 days from the date of receiving all the relevant papers and the required clarifications to pay the claim or reject it. But if the insurer sees merit in further investigation, it can take up to 90 days, which start from the date of receiving the claim and the claim needs to be settled within 30 days thereafter.
The penalty on violating these timelines are also specified. If there is a delay, the insurer shall pay interest at the rate of 2% above bank rate on the claim money from the date of receipt of the last necessary document. So, if you have done your bit by submitting all the documents, but the insurer settles the claim after 35 days, the insurer will not pay a penalty for 5 days, but 35 days.
Source : LiveMint