Settlement of the claims is the culmination of a contract of life insurance .
It will not be an exaggeration to say
that the image of an insurance company ,
created in the minds of policy holders in a
particular and the insuring public in general, depends, on the efficiency and effectiveness with which claims are processed and settled.
The speed with which they are settled
acts like a booster to the morale of the marketing force of a company . Claim settlement , therefore occupies an important place in the total
operations of an insurance company.
In
fact the insurance Regulatory and Development Authority (IRDA)
has issued instructions to
all insurance companies to settle claims within a period of 30 days failing which
they should pay a penel interest at the rate of 10 percent for the the period of delay . This impose a
statutory obligation on every insurance
company. Basically the following two
types of claim which come before an
insurance company: 1. Maturity claims, 2.
Death Claims: 1. MATURITY CLAIMS: Maturity claims come up for
payments in the following manners: (1) All
endowments types of policies have
pre-determined date of maturity which is shown
in the policy bond. (2) Under
joint life policies on the lives of
couples claim by way of maturity arises
in the following ways: (a) Both the
lives survive the date of maturity in
which case maturity claim is payable.
(b) During the term of the
policy. one of the lives dies and death
claims paid. Even thereafter the
second surviving life remains covered
till the maturity date. . In the event of the second life surviving up to the maturity date, the sum assured becomes payable as maturity claim. The insurer therefore, has to keep track of the cases
that may come up as maturity claims.
3.
Under Fixed Term Marriage/ Educational Annuity Plan, benefits are payable on the maturity date even if the
policy holder dies before that date. The only effect of death will be that further premiums cease. Thus, claim under the policy is
also payable as maturity claim. 4.
Under Money Back Plains , survival
benefits become due for payment after regular interval of 4 or 5 years
depending upon the terms of the policy.
These survival benefits are treated claims
by maturity because date of payments is
pre-determined. CLAIMS INTIMATIONS:
Claims by maturity and their date of maturity are known before hand . Therefore every insurance company prints. Claims Intimation Registers well in advance of the
date of maturity. Then printed letters are usually sent to the policy holder to
inform them to comply with the requirements
for payments of claim amount . It gives instructions for obtaining
payments. A copy of this is also endorsed to the agent so that he is
able to maintain his liaison with the claimant . This letter of instructions
for obtaining the payment is called the claim intimations letter.
BASIC REQUIREMENT FOR SETTLEMENT OF MATURITY CLAIMS: The requirements are as
under: (a) Original policy bond, if loan was availed from the
insurer, (b) Discharge form duly
completed and executed. ( C ) Age of proof
, if age was not admitted previously
. The salesmen are advised to realises the importance of age admission at the time of obtaining
policy. Their attention is also drawn to Section 45 to Insurance Act whereby it
is obligatory on the part of the life
assured to furnish age proof at the time
of claim settlement. (d) If any
assignment or re-assignment was executed
by a separate deed or deeds, such
deeds must be submitted along with the
other documents as listed above:. (e) Insurer’s
office sends the Discharge Form as per item (b) above along with the
claim intimation letter. The policy
holder has to return their Discharge Receipt
duly completed with the policy
bond. If the policy stands assigned in
favour of a Bank or an institution or some individual the discharge
form will be return by the institution or the individual along with the
policy bond.
A nominee has no locus
standi in the event of claims by maturity.
2. DEATH CLAIMS: Life insurance is basically for providing
financial security to the families of
deceased policy holder. Death claim settlement naturally assumes very great
importance in the total operations of any life
insurance company. Despite
several problems
encountered, Life insurance companies struggle to efficiently and effectively
attend to this function. The death
claims are generally divided into a two
category viz, normal death claim and premature claim. If the assured dies
after two years of the commencement of the policy it is treated as normal death
claim. In case, the assured dies within two years of the commencement of the policy, it is called premature claim.
The actual procedure involved in death claim is as follows.
