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The unit-linked insurance plans ( Ulips) provide both death and maturity benefits to the policyholder. If he dies during the term of the policy, the beneficiary will receive one of these: sum assured, the higher of the fund value and sum assured, or sum assured and the value of the fund, depending on the terms of the policy. Such proceeds from the insurance company are tax-free.
Intimation
In the event of the death of the insured during the term of the policy, the nominee has to formally communicate the same to the insurance firm.
Claim form
A claim form has to be filled and submitted to the insurance company with the required documents for the claim to be formally registered. The form comprises particulars of the insured, details of death and basic information about the claimant.
Documents
The claimant must provide the original policy document, copies of death certificate, claimant’s photo ID and address proof, police FIR and post mortem report in case of accidental death, and certificate and medical records from the doctor/hospital in case of death due to illness.
Settlement
As per Irda regulations, the insurer can seek clarifications within 15 days and settle a claim within 30 days of receipt of all documents. In case any investigation is required, the proceedings should be completed within 180 days.
Points to note
1. Irda mandates that all claim payments to the policyholders be made only through electronic modes.
2. Insurance companies may set up their internal timelines, which are typically shorter than Irda timelines.
3. The insurance company can reject claims on two grounds—misrepresentation of facts and non-disclosure of key information that could impact the underwriter’s decision.
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