How Does Claim Settlement Works in Term Life Insurance?
Policyholders and beneficiaries are advised to know the life policy settlement procedure in term insurance. Briefly following it can assist in directing it effectively:
Commencing the Claim
As soon as the policyholder dies, the beneficiary is supposed to notify the insurance company and complete the claim form for submission with requisite documents like the original death certificate and policy bond. Thus involving the financial advisor who has preceded this policy acquisition, here would avoid engaging one further effort.
Documentation and Submission
Accuracy and completeness are crucial. These are normally sought by an insurer:
A filled claim form.
Original Death Certificate.
Original policy document.
Identification proof of beneficiary.
Timely submission of these documents will ease the settlement process.
Time Taken in Claim Settlement
Insurance companies have provisions to settle claims within a short period. TruStage, for example, says it would settle claims within 3-5 business days after complete documentation is sent. However, the processing time is different among various insurers.
Claim Settlement Ratios
The claim settlement ratio (CSR) of a company provides an idea of how reliable that company is in paying claims. During the FY 2022-23 period, the life insurers in India managed to attain an individual death claim settlement ratio of as much as 98.45%, which means in that particular time, it settled more than 98% of claims.
