the policyholder funds is expected to pay to the rightful person entitled to legally receive the policy money. Hence, the insurance company insists that the claimant provide evidence that the claimant is the rightful person entitled to receive the policy money.
Insurance law has a provision of nomination. The insurance company is discharged of its liability once it pays the money to the nominee registered under a process established by the Insurance Act 1938. A claim under a policy that does not have a nomination cannot be settled as the insurance company cannot be discharged. The insurance company will insist on a succession certificate or indemnity to pay the claim. Every policyholder should make a valid nomination as per the provisions of Section 39 of the Insurance Act 1938. A nomination can be changed at any time during the term of the contract and the life assured is expected to review the nomination made under various policies from time to time.
Submission of documents: Correct submission of documents to claim the policy money is another critical aspect. The documents under any life insurance claim fall under the following three broad categories:
* Documents to prove that the insured event happened.
* Documents to prove that the event that happened is specifically not excluded under the policy contract.
n Documents to prove the identity and the fact that the claimant is the rightful person to receive the policy money.
An insurance company cannot settle claim until all documents are in place. In case, original documents cannot be produced, there is a process to get the documents certified and the claimant is expected to follow the process of certification of copies of all documents. Irda mandates that all claim processes be communicated to the policyholder via the policy document and on the website; the lives assured and the possible claimants will do well to read the processes at least once.
Author is Senior VP, Underwriting and Claims, HDFC Life