Insurance claim delayed? Insurers will have to pay penal interest
Life insurers need to settle claims within 30 days of receiving all documents. Read for details.
One of the primary duties of the insurance company is to provide its customers with claim service. The purpose of buying insurance is to protect the family in case of the death of the policyholder. Hence, insurance companies have an obligation for providing seamless claim service to their policyholders. Generally, insurance claims are settled within 7 days from the receipt of the documents. However, if your insurer takes a longer time to settle your claim, here is a timeline they need to adhere to. Read for details.
Types of claims
You can claim from your life insurance policy in two situations- survival and death. While a death claim arises only upon the death of the policyholder or life assured, survival claims happen on the maturity of the policy, surrender of the policy, when a bonus amount is paid by the insurer after reaching a milestone like in a money-back policy or when riders such as critical illness get activated.
Claim procedure
• The beneficiary must send the written intimation to the insurer as soon as possible to set the claim process rolling. The claim intimation should include relevant information such as the name of the insured, date of death, cause of death, policy number, name of the claimant, among other things.
• A life insurance company sends its queries within a period of 15 days of the receipt of the claim
• Life insurance company pays or disputes the claim within 30 days from the date of receipt of all relevant papers
• If the case merits an investigation, it has to be completed within 6 months from the time of filing the claim
• In case of a delay the life insurance company pays interest on the claim amount at a rate that is 2% above the bank rate prevalent at the beginning of the financial year in which the claim is reviewed by it.
Claim documents
The insurance company ask for the following documents in case of a death claim:
• Claim form
• Death certificate
• Policy documents
• Deeds of assignments
• Legal evidence of title