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When death arrives for a loved one, certain practical demands require our immediate attention. Filing for a life insurance claim after death can be immensely challenging after the passing away of a loved one and might make the survivors feel as though the value of a life is reduced to an amount by filing a claim. However, it is important not to think of death claims so morbidly. On the contrary, consider it a gift from your loved one who wants and expects you to continue without facing financial troubles.
What is a Death Claim?
Before wondering ‘how do I file a life insurance claim?’ it is important to know what it means. By definition, a death benefit is a payout to the beneficiary of a life insurance policy, annuity, or pension when the insured or the annuitant passes away. The beneficiary usually receives a lump sum amount because death benefits are not subject to income tax.
When someone opts for an insurance policy under the insurance contract, the listed beneficiaries receive an amount so long as the premiums have been paid in time. Beneficiaries can either receive the payment as a lump sum or as continual monthly or annual payments depending on the benefit defined under the product that is opted.
While the death claim for an insurance policy is free of tax*, annuity beneficiaries may have to pay income tax or capital gains tax on the benefits received. The process of receiving a death benefit through a life insurance policy is hassle-free and can be easily followed.
Types of death benefits
Life insurance promises the financial protection of the loved ones of the insurer if the fateful should come to pass. These untimely deaths are classified into several categories by life insurance companies. Below are the types of death that are normally covered under a life insurance policy:
- Natural Death or death caused owing to health issues: A term life insurance plan covers death occurring owing to natural reasons or health-related concerns. If the policyholder passes away because of a medical condition or a disease that has resulted in their death, the payout is handed over to the beneficiary.
- Death because of an accident: Death caused by accident is covered by a term life insurance policy. If the policyholder gets involved in an accident or passes away in the hospital because of it, the nominee receives the insurance policy's payout. However, it is important to note here that if the insurer was under the influence of alcohol or drugs, or was escaping upon breaching a law that has led to the accident, then the beneficiary’s claim for death benefit is rejected. Do check the exclusions that form part of the policy document.
- Homicidal death: If the insurer is murdered and if in any manner it is revealed that the nominee might be involved, then the death benefit is withheld until the charges have been dropped.
Death by Suicide: If the policyholder were to die by suicide, then the beneficiary would receive the payout. However, an important note here is that if the suicide occurs within one year of purchasing the policy or from the revival date whichever is earlier, the death claim payable is accordance to the suicide clause defined in the policy document. out to the nominee.
How to collect life insurance payout after the policyholder’s death?
Usually, the following documents are needed to make a death claim:
- Death certificate
- Original life insurance policy documents
- ID proof of the beneficiary
- Age proof of the insurer
- Executed and witnessed discharge form
- Medical certificate proving the cause of death
- If the death occurs owing to an unnatural event, then a police FIR is also needed
- Similar to the above, a post mortem report is also needed if the death was unnatural
- Cremation and employer certificate in case of an early death
If you are wondering how long after death do you have to collect life insurance death claims it is advisable that you do this as soon as possible.
Term Insurance Plans from Tata AIA
Acknowledging that the passing away of a loved one is one of the most challenging phases of life, Tata AIA has simplified the process of death claims.
Tata AIA ensures that they are there for every step of the way when most needed and have a claim settlement ratio2 of 99.01% for FY 2022-23. It offers a range of budget-friendly and extensive term life insurance coverages for an affordable life cover.
The significant features are:
- Whole life cover: Option to extend your life cover up to 100 years of age.
- Attractive Riders#: Enhance your life insurance coverage with a set of riders#.
- Flexible premium payment: Option to choose from multiple premium payment modes.
- Convenient payout modes: Option to choose from multiple death benefit/maturity payout payment modes.
- Survival benefits: Plans offer the sum of total premiums paid as maturity benefits in case the policyholder survives the policy term.
- Tax* Benefits: Avail tax* on the premium paid and the maturity benefits as per the prevailing tax laws.
Visit the website today for more details.
L&C/Advt/2023/Aug/2603
