Don't delay the insurance claim Business Standard
Don't delay the insurance claim
We all know the importance of doing things on time. Just as it is important to pay your insurance policy premiums on time, it is also important to intimate the insurance company on time in case of death of the policyholder. If the claim is not made within three years of the policyholder's death, the company can refuse to pay the money.
Under the The Limitation Act, 1963 the claimant has to intimate the insurance company about the occurrence of death within three years from the death of the family member. The insurance company can refuse to pay the claim if the intimation is beyond this period. However, in case of genuine reasons the company has to pay the claim and cannot reject it on the ground of the technicality that the intimation was late.
According to Frederick D'souza, Senior Vice President - Underwriting at HDFC Life most of the life insurance policies which cover the risk of death do not have a specific provision with respect to the period for making a claim and, hence, the period of three years from the date of death as provided in the law of limitation is applicable. But some rider covers like critical illness, hospitalisation benefit etc do contain a time limit wherein a claim should be made.
Companies do get intimations for claims three or four years after the policyholder's death. But they pay after ascertaining the reasons for the delay says Ravi Kutumbarao Head - Claims, Bajaj Allianz Life Insurance.
"We don't apply the law in the strict sense. We ask for the reasons for the delay and since we cannot corroborate them, we accept them at face value,'' he says.
The common reasons for delay in intimation could be that the family members were overseas and hence, could not claim on time. Or they did not know about the policy's existence.
Prakash Praharaj, of Max Secure Financial Planners says that sometimes people buy more than one or two policies and don't inform their family members about all of them. So, the beneficiaries may not know that a certain policy exists.
In case the company refuses the claim, beneficiaries can approach the court and the company can present its case based on Policy Document and Limitation Act. In the court the insurance company can take a stand that the claim is time barred as per the law of limitations. The decision of the court will depend on the merits of the case
The insurance company will pay the claim if there is conclusive proof of the happening of the insured event and there are no circumstances which prevents it from making investigations, etc, due to elapse of time, which are necessary to settle the claim, says D'Souza of HDFC Life.
According to Deepak Yohannan, CEO, MyInsuranceClub.com, usually insurance companies may check with neighbours or the hospital before paying the claim. Since, such steps will be of no help if the claim is made three years after the death, the company may ask for documents like postmortem report and so on.
"Anything that raises doubts will be investigated. It may happen that the deceased had a pre-existing ailment which was not disclosed while applying for the policy. So, the insurance company will carry its own investigation,'' he says.
"Normally insurance companies collect the claim forms with evidence of happening of the insured event. The company may make an independent investigation to check facts and determine that the claim does not fall in any exclusions as per the policy provisions,'' D'Souza says.
Another situation where delayed claim is permitted is when the deceased is missing or non-traceable, says Praharaj. As per law a missing person is declared dead only after seven years. So, the beneficiaries can make the claim after seven years. But they must provide all relevant documents like copies of the police complaints and police verification report.
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
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We all know the importance of doing things on time. Just as it is important to pay your insurance policy premiums on time, it is also important to intimate the insurance company on time in case of death of the policyholder. If the claim is not made within three years of the policyholder's death, the company can refuse to pay the money.
Under the The Limitation Act, 1963 the claimant has to intimate the insurance company about the occurrence of death within three years from the death of the family member. The insurance company can refuse to pay the claim if the intimation is beyond this period. However, in case of genuine reasons the company has to pay the claim and cannot reject it on the ground of the technicality that the intimation was late.
According to Frederick D'souza, Senior Vice President - Underwriting at HDFC Life most of the life insurance policies which cover the risk of death do not have a specific provision with respect to the period for making a claim and, hence, the period of three years from the date of death as provided in the law of limitation is applicable. But some rider covers like critical illness, hospitalisation benefit etc do contain a time limit wherein a claim should be made.
Companies do get intimations for claims three or four years after the policyholder's death. But they pay after ascertaining the reasons for the delay says Ravi Kutumbarao Head - Claims, Bajaj Allianz Life Insurance.
"We don't apply the law in the strict sense. We ask for the reasons for the delay and since we cannot corroborate them, we accept them at face value,'' he says.
The common reasons for delay in intimation could be that the family members were overseas and hence, could not claim on time. Or they did not know about the policy's existence.
Prakash Praharaj, of Max Secure Financial Planners says that sometimes people buy more than one or two policies and don't inform their family members about all of them. So, the beneficiaries may not know that a certain policy exists.
In case the company refuses the claim, beneficiaries can approach the court and the company can present its case based on Policy Document and Limitation Act. In the court the insurance company can take a stand that the claim is time barred as per the law of limitations. The decision of the court will depend on the merits of the case
The insurance company will pay the claim if there is conclusive proof of the happening of the insured event and there are no circumstances which prevents it from making investigations, etc, due to elapse of time, which are necessary to settle the claim, says D'Souza of HDFC Life.
According to Deepak Yohannan, CEO, MyInsuranceClub.com, usually insurance companies may check with neighbours or the hospital before paying the claim. Since, such steps will be of no help if the claim is made three years after the death, the company may ask for documents like postmortem report and so on.
"Anything that raises doubts will be investigated. It may happen that the deceased had a pre-existing ailment which was not disclosed while applying for the policy. So, the insurance company will carry its own investigation,'' he says.
"Normally insurance companies collect the claim forms with evidence of happening of the insured event. The company may make an independent investigation to check facts and determine that the claim does not fall in any exclusions as per the policy provisions,'' D'Souza says.
Another situation where delayed claim is permitted is when the deceased is missing or non-traceable, says Praharaj. As per law a missing person is declared dead only after seven years. So, the beneficiaries can make the claim after seven years. But they must provide all relevant documents like copies of the police complaints and police verification report.
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
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To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
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