Some facts to be considered in respect of Death Claim

RIVAL CLAIM: If more than one person claims the policy moneys, it is called as Rival Claim. Such rival claimants are advised to approach a court with a request to serve a prohibitory order on the insurers from making the payment. Such an Order from the court should be served on the insurers within a fortnight from the date of insurer's advice to the effect. If the court stays the payment, the insurer has to wait till the court passes final order regarding payment.

LIMITATION PERIOD: Limitation Act, 1963 says that no claim can be made after a period of 3 years from the date of claim or from the date of last correspondence. In life insurance, if a claim arises, whether intimated immediately or not, the amount has to be paid in discharge of the insurer's duties under the contract. If the payment can not be made immediately because the intimation was not given within 3 years from the date of the claim or intimation, the payment has still to be made. The provisions of the Limitation Act do not apply to insurance contracts.

PRESUMPTION OF DEATH: In respect of death claim, proof of death is essential. A death certificate issued by the municipal office or similar local body is the acceptable proof of death. A certificate of burial or cremation can also be obtained. Statements from witnesses to the last rites will be supporting evidence. In the case of accidents or air crashes or on seas or natural calamities, the bodies may not be found. In such cases, insurers rely on statements from the carriers or other authorities with the relevant information. In case of defence personnel, a certificate from the commanding officer of the unit is to be obtained. If a court of enquiry is ordered, its findings should be obtained.

Sometimes a person is reported missing without any information about his whereabouts. The Indian Evidence Act provides for presumption of death in such cases, if he has not been heard of for seven years. If the nominee or heirs claim that the life assured is missing and must be presumed to be dead, the insurers insist on a decree from a competent court. It is necessary that the premiums should be paid till the court decrees presumption of death. The insurer may also act on its own without a decree of the court, if reasonably strong circumstantial evidence exists to show that the life assured could not have survived a fatal accident or hazard. Insurers may as a matter of concession, waive the premiums during the seven years' period.

ACCIDENT AND DISABILITY BENEFITS: These benefits are conditional on conclusive evidence, that all the eligibility conditions are satisfied and that the exclusions do not apply. The conditions are that –

• the accident must be caused by outward, violent and visible means, not self inflicted
• the death must be a result of injuries caused by that accident
• the death must occur within 120 days or such other period as may be
  specified

The exclusions may be –

• intentional self injury, attempted suicide, insanity, immorality, intoxication
• accident while engaged in civil aviation or aeronautics, other than as a passenger
• injuries resulting from riots, civil commotion etc.,

Claim settlement would require the following documents as evidences -

• First information report (FIR)
• Panchnama of accident site
• Police report
• Post mortem report
• Chemical examiner's report, in case of poisoning, drugs, narcotics, etc.
• Hospital reports, if any

CRITICAL ILLNESS CLAIMS

The benefits would be payable on satisfactory evidence, in the nature of hospital and other medical reports, that the conditions of criticality, waiting period and illness are met.

IRDA REGULATIONS: IRDA has set forth following guidelines for Insurers regarding settlement of Claim -

• the insurer should ask for all the requirements in the case of a death claim at one time and not piecemeal.
• the decision to admit or to repudiate should be made within 30 days of receipt of all papers
• If an investigation is necessary, it should be completed within 6 months
• Interest at 2% over the Bank rate, will be payable for delays in settling the death claims
• Interest at the Savings Bank rate will be paid if the insurer is ready to pay but the claimants are not ready to collect

Requirement of Document in respect of Death Claim

Death within 3 years from the date of issue of First Premium Receipt or from the date of revival is known as early death claim and death after 3 years from date of issue of First Premium Receipt or from the date of revival is known as non-early death claim. In respect of early death claim, an investigation has to be done to rule out the possibility of wrong payment to wrong party. The investigation is generally entrusted to an officer of the insurer. The officer has to submit the investigation report within a maximum period of 6 months, as per guidelines of IRDA. Following documents are requirement in respect of death claim -

NATURAL DEATH:

• Intimation of death by the members of the family, relatives, neighbours, friends, and colleagues, employers, professionals like doctors, lawyers etc. or insurance agents.
• Death certificate
• Policy Bond
• Proof of premiums paid
• Proof of age is required, if the age has not been admitted earlier.
• Proof of title of the claimant e.g. (nominee, assignee, or legal heirs etc.)
• Discharge form duly signed by the claimant and witnessed by a responsible person.

UNATURAL DEATH: (In respect Early or non-early claim) :

• First Information Report (FIR)
• Post Mortem Report
• Panch nama

CLAIM CONCESSION: The policy lapses, if the payment of premium is not made within the grace period. But in case of death of the life assured after lapse of policy after certain period, death claim can be paid after allowing claim concession, as per the practice of Life Insurance Corporation of India, which is appended below : -

1. If the premiums are paid for at least 3 years and death of the Life Assured occurred within 6 months from the first unpaid premium, full sum assured is paid along with Bonus, if participating policy, subject to deduction of unpaid premium along with interest
2. If the premiums are paid for at least 5 years and death of Life Assured occurred within 12 months from the date of first unpaid premium, full sum assured is paid alongwith Bonus, if participating policy, subject to deduction of unpaid premium alongwith interest.

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.

Assignment (Section 38 of Insurance Act,1938)

Section 38 of Insurance Act, 1938 has made provision for assignment or transfer of rights under a life insurance policy.

A transfer or assignment of a policy of life insurance, may be made only by an endorsement upon the policy bond itself or by a separate instrument, signed in either case by the transferor or assignor or his duly authorized agent and attested by at least one witness, specifically setting forth the fact of transfer or assignment. Assignment can be made with or without consideration.
Where the assignment is made in favour of the Insurer against loan granted under the policy, the right of the insurer is limited to the loan amount with interest outstanding under the policy. In case of death of the policy-holder during the term of the policy, the balance amount under the policy, after deducting the loan, will be given to the nominee/claimant.

Assignment is of two types : -

• Conditional Assignment
• Absolute Assignment

Under Conditional Assignment, the policy may be transferred back to the original policyholder, after happening of a specified event or fulfilling the condition laid down at the time of assignment. Such policy will be re-assigned in favour of the assignor by the assignee.

Under Absolute Assignment, the rights are transferred in favour of assignee completely and it can not be reverted back. The payment under the policy will be made to the assignee at the time or maturity or earlier death of the life assured.

While assigning a policy, a notice in writing of the transfer or assignment will be given to the Insurer to register such assignment. Such notice is required to establish the priority of claim, if needed.

Assignment automatically cancels the nomination made earlier under life insurance policy.

Settlement of Claim under Life Insurance policies

Claim is a demand on the Insurer to fulfill its promise. Claim is the last policy condition relates to the settlement of claim. Claim arises at maturity or at death, whichever comes earlier.

There are two types of claim in life insurance policies –

Death Claim

It is divided into two parts -

(a) Early Claim : Within 3 years from the date of issue of first premium receipt

(b) Non-early Claim : After 3 years from the date of issue of first premium receipt.

Normally Life Insurance Companies will require the following documents for settlement of Claim. However, companies reserve the right to call for other documents, if needed, for settlement the claim as early as possible.

• Prescribed Claim form
• Policy Bond
• Original death certificate
• Discharge voucher
• Hospital/last medical attendant's certificate
• Certificate of burial / cremation
• Employer's certificate in case the deceased was in employment
• FIR, Police Inquest Report and Post-mortem Report in case of death by accident
• Legal title of the claimant
• Any other document as may be called for, if required

Maturity Claim

In the case of Claims arising by maturity of the policy after specified term, the policy holder is advised well before the actual date of maturity in order that the necessary papers may be completed to allow the payment being made before the date of maturity. Following documents may be required for settlement of maturity claim.

• Policy Bond
• Discharge Voucher
• Deed of assignment, if any

After receipt of above papers, the cheque is prepared in favour of the policyholder and the same is sent before the date of maturity.

Postal Life Insurance (PLI)

Monopoly for securing life insurance business in India was created in favour of Life Insurance Corporation of India by passing the L.I.C. Act. 1956.  The only exception was Postal Life Insurance.  In fact Postal Life Insurance was started in 1884 as a welfare measure for the employees of Posts and Telegraph Department under Government of India.  Seeing the popularity of its schemes, various departments of Central and State Governments were extended its benefits.  Now Postal Life Insurance is open for employees of all Central and State Government Departments, Nationalized Banks, Public Sector undertakings, Financial Institutions, Local Bodies like Municipalities and Zila Parishads, Educational Institutions added by the Government etc.

Rural Postal Life Insurance

On 24^th March, 1995, the benefits of Postal Life Insurance were extended to rural population of the country under the banner of Rural Postal Life Insurance.

The Postal Life Insurance and Rural Postal Life Insurance have following  products : -

PLI                                    RPLI

(a)  Santosh                 (a)  Gram Santosh

(b)  Suraksha                (b)  Gram Suraksha

(c)  Suvidha                  (c)  Gram Suvidha

(d)  Sumamgal               (d)  Gram Sumangal

(e)  Yugal Suraksha        (e)  Gram Priya

(f)  Children Policy          (f)  Children Policy

The main characteristic of the Postal Life Insurance Scheme is its simplicity and limited number of its products.  The rates of premium are slightly lower and bonus raters are higher, as compared to LIC Plans. The surrender values are also more liberal. In real sense there are no marketing activities in PLI.  In spite of this it has registered a modest growth.

The Postal Department is also chalking out plans to expand its operation on larger scale.

Helpful Tips for Life Insurance Agents / Advisors

Life Insurance Products are canvassed with the help of insurance professionals and not through any other medium. In other words, Insurance Agents / Advisors are the backbone of any Life Insurance Company and it is the Agents / Advisors, who procure new business on behalf of the Company. If you are confronted with a question that what are you doing in your role as an Agent / Advisor, you must have utmost clarity as below:-

• You sell life insurance policies to clients according to their needs and hence help people to plan their finance in a better way.
• You, as a Wealth Manager/Advisor help people to manage their wealth for investment, savings, and risk management.

There could be many more answers of similar nature but in my opinion the role of an insurance agent/advisor can be best defines as -

• A person promoting the principles of life insurance among the public and hence doing a noble and an excellent job.
• A person educating the clients about the need of insurance, different products offered by one's company and other competitive insurance companies, thus preparing people for selection of most suitable product.
• A person mobilizing the public funds through insurance premium which in turn is being used for nation building activities by different Govt. Agencies / Projects. Therefore, knowingly or unknowingly you are a partner to build the nation.

As a professional insurance Agent and financial Advisor, one should completely understand the Product that one is going to sell and the people to whom one intends to sell the product.

A life insurance policy is a harmonious blending of three elements viz. Risk Management, Tax Planning and Financial Planning or Saving Schemes. Out of these three elements, risk management component is the most unique feature because it indemnifies life to the extent of human value by providing insurance cover.

Therefore, it is desirable that the agent should focus more on the customers than the products, because people are also aware and capable to choose the best product from the market. But as an agent one should be very clear that (a) People are dying out of over eating (b) People are dying out of under eating or starvation (c) No human being is a perfect one (d) Not all individuals are healthy, but we have to insure all. Therefore, it is clear that the basic point is to focus on the customers.

While approaching the client for insurance cover, one comes across to know client's profession, income, family history, personal history, habits, record of his past illness, if any, his previous insurance, his present health status etc., as these are the vital part of an insurance proposal.

Please understand that health influencing factors are smoking, liquor intake, life style and common diseases. As an Agent you are compulsorily required to know about all, because above factors are vital part of insurance chain which goes like this-

Proposal --> Underwriting --> Policy --> Claim

Non disclosure of vital data will disrupt the chain and this is the weakest point of the chain which will contribute for occurrence of early claims. Such early claims will be examined throughly and if found inappropriate then one's selling capacity will experience a jolt when such claims are repudiated.

Therefore, one has to deter the habit of non disclosure. This will improve one's selling skills and the interests of the Life Insurance Company. There are chances to loose a customer on account of non-disclosure because at times one may aim at the end result i.e. sale of insurance policy, ignoring the means that one is applying.

It is desirable on the part of Agents / Advisors that they should not deviate from the vision and values of concerned life insurance company, with whom they are associated. Therefore, the means (methods applied for sale of an insurance proposal) should qualify the ends. This is of paramount importance.