Term Insurance Claim Settlement: What Beneficiaries Need to Know

When a loved one buys a term insurance plan, the hope is that it never needs to be claimed. But life is uncertain. If the policyholder dies during the policy term, the responsibility falls on the nominee to approach the insurer. In that moment of grief, to know the process and to stay prepared can help avoid confusion or delay. This guide is meant to help you understand how to claim term insurance in India clearly and practically.

When Can You Raise a Claim?

A claim can be made under the following circumstances:

• Death of the policyholder while the policy is active. The nominee becomes eligible to receive the death benefit.
• Riders like accidental death, critical illness or terminal illness may be included. These offer additional payouts over the base sum assured if conditions are met.
• Maturity benefit if the policy includes a return of premium feature. If the policyholder survives the term, the insurer returns the premiums paid.

To know what applies in your case, you must check whether the policy is in force and whether any riders were added.

How to Begin the Claim Process

Start by informing the insurer. This is called claim intimation. It must be done soon after the death of the policyholder. You can notify the insurer online, through customer care or by visiting a branch.

Next, collect and submit these documents:

• Death certificate
• Identity and address proof of the nominee
• Policy document or policy number
• Medical records (if the death was due to illness)
• FIR and post-mortem report (if the death was accidental or unnatural)
• Assignment or re-assignment deed if the policy was transferred

Always ask for an acknowledgement once documents are submitted.

Why Insurers Examine Early Claims Differently

If the death happens within three years of policy purchase, insurers treat it as an early claim. These are checked more thoroughly. The insurer may:

• Verify medical history
• Speak to hospital staff
• Cross-check cause of death
• Request additional documents

This is not meant to deny genuine claims. It is only to ensure that there was no non-disclosure or fraud when the policy was issued.

What Causes Claim Rejections or Delays?

It is important to understand what can go wrong so that you know how to avoid it. Common reasons include:

• Lapsed policy: If the premium was not paid on time and the grace period ended, the cover may no longer exist.
• Non-disclosure: If the policyholder had a major illness and did not mention it during the application, the claim can be denied.
• Suicide clause: Most policies do not cover suicide within the first year of purchase.
• Incorrect nominee details: If the nominee details are outdated or missing, the claim may get delayed.
• Documentation errors: Small mistakes in form filling, wrong names or missing papers can slow down the process.

You should always double-check all forms. If required, reach out to the insurer’s help desk to know what documents are needed.

How the Claim Settlement Process Works

Most insurers follow a clear process:

1. Notification: Nominee informs the insurer about the policyholder’s death
2. Form filling: The Claim intimation form is submitted along with key documents
3. Verification: The insurer checks the documents and conducts any investigation
4. Decision: If everything is in order, the claim is approved
5. Payout: The sum assured is released to the nominee. IRDAI rules require this to be done within 30 days of receiving complete documents. If the claim needs further investigation, it may take up to 90 days.

To speed up the process, make sure all papers are in order and filled with the correct details.

Tips for Beneficiaries

• Keep policy details and nominee information updated.
• Know where the original policy document is kept.
• If the nominee is not familiar with paperwork, guide them on how to contact the insurer.
• Ensure premiums are paid on time to avoid policy lapse.
• If there are any changes in family status, such as marriage or birth of a child, review nominee details.

Also, if you are still exploring term insurance options, it is better to choose an insurer with a strong claim settlement record. Many people use online tools to compare quotes before buying a 1 crore term insurance plan or selecting a sum assured that suits their needs. This helps to balance affordability with trust.

Final Thoughts

To claim term insurance is not to ask for a favour. It is to receive what was promised under the contract. But like any important process, it needs attention to detail and proper preparation. If your family depends on this payout, then it becomes even more important to file the claim carefully and to follow up regularly. A well-informed nominee, supported with the right documents, will be able to complete the process smoothly and receive the support they need.