Saturday, April 17, 2010

Death Claim under Life Assurance Policies

Claim is a demand by the insured on the insurer to fulfill its promise made in the life insurance contract. Claim is of two types i.e. Maturity or Death. Payment of maturity claim is taken by the policy holder on completion of specified term, mentioned in the Policy Bond. The insurers send the intimation in advance in respect of maturity of the policy to the life assured to enable him to get the payment before the date of maturity.
On the other hand, the procedures in settling a death claim are more complex than in the case of maturity claims. This is mainly because of the facts relating to the death which have to be studied and the identities of the claimants have to be established.
Who can Claim?
When the claim has arisen due to the death of the life assured, policy amount has to be paid to the claimant. Either of the following persons may claim the amount of the Policy, after fulfilling certain procedure : -
  • NOMINEE : The nominee can make a claim. Nominee is not the owner of the policy. The nominee can only give a valid discharge to the insurer, in the event of any happening. Nominee is expected to be the representative of all the legal heirs of the life assured. If the nominee is minor, the appointee can receive the claim amount.
  • WILL : The executor of a WILL left by the life assured can also make a claim. The WILL has to be registered with the registrar to establish the priority of the claim. There should be a mention of the policy in the WILL. The contents of the WILL prevail even if there is mention of nomination in the policy. The WILL should have to be registered for this purpose with the Registration Authorities.
  • ABSENCE OF NOMINATION OR WILL: If there is no nomination or WILL, the legal heirs of the life assured can prefer the claim. The legal heirs have to prove their title through a Succession Certificate or Administrator General's Certificate.
  • ASSIGNMENT: The assignee can make a claim, if the policy is assigned to him. If the assignment is not registered with the insurer, the assignee can apply for registration of the assignment at the time of making a claim. In respect of minor assignee, the guardian of the assignee can claim, if they are registered as guardians.
  • If the policy is assigned for natural love and affection, then, the assignee (normally within the family) can claim.
  • If the policy is conditionally assigned conferring the rights to the conditional assignee on the death of the Life Assured, the conditional assignee can claim.
  • If the assignee had predeceased the life assured or if the assignee died after the life assured but before he received the claim amount, then the legal heirs of the assignee can make the claim. The legal heirs of the assignee have to submit the documents of death of the life assured or the assignee. They have to produce the title or documents as their succession to the assignee
  • If the policy is taken under Married Women's Property Act, the trustees can make a claim. If no trust has been created, the beneficiaries under such MWP Act policy can claim the policy money, provided they all are major and competent to contract.
  • If the trustee relinquishes his right, then the official trustee has to make the claim.
  • If all the beneficiaries have deceased, only the legal heirs of the Life Assured can claim.
  • If the Life Assured has divorced the wife before his death, the provisions of the MWP Act still will prevail, provided the document of divorce decree allows this. The courts will have to decide whether the wife can claim the policy moneys.
  • If the payment of premium was made by the HUF funds, then the KARTA of the HUF can make a claim, who will be the senior most living male member of the family.

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