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Types Of Term Insurance Claims You Need To Know

Icon_Calender October 16, 2025
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Imagine you are sitting at your kitchen table with a steaming cup of coffee, chatting with your friend about life and future plans. The conversation meanders, and when you start discussing various responsibilities in life, insurance naturally comes up. That is when your friend named Banu shares a story about her cousin, Jagan. Jagan had a term insurance policy and recently passed away in a road accident. But when the time came, his family didn't know how to claim it. They were confused and stressed during an already tough time.

You immediately started having second thoughts!

What if your dear ones needed to make a claim on your term insurance? Would they know where to start? Jagan’s story got you thinking - what types of term insurance claims are there, and how do they work?

As you sip your coffee, more questions keep coming to your mind. What will happen if you pass away? What about the different situations that affect your insurance claims? Read the article below to understand the different types of term insurance claims and how they can help your dear family be prepared for the unexpected.

What Is A Term Insurance Claim?

Anyone looking for promising financial security for their loved ones will choose to buy a term insurance policy. When a person invests in term insurance, and if life takes an unfortunate turn, the people they care about can formally seek a payout from the insurance company. This request is called a term insurance claim. In other words, a claim is when the policy's chosen beneficiary/nominee contacts the insurer to request the death benefit amount. This process begins shortly after the insured person passes away during the policy term.

Types Of Term Insurance Claims

The different types of term insurance claims are -

Death Claim:

When someone covered by a term insurance policy bites the dust during its term, their nominee can file a death claim. This claim allows them to receive the death benefit payout, which varies based on the policy type and its specific terms.

Rider Claim:

Rider claims are additional benefits that you can include in your term insurance policy through what is known as a rider. These claims can cover specific events like critical illness, disability, accidental death, and more. So, they offer extra protection beyond the basic coverage of your policy.

For example,
After Jagan’s tragic incident, even Banu decided to purchase a term insurance policy. She chose a sum assured of Rs. 75 lakhs for a policy duration of 25 years. She also paired an accidental death benefit of Rs. 25 lakhs to his term insurance. We will see how this works.

Situation 1:
Banu paid the premiums regularly, and years passed by. One day, Banu was working out in the gym, and she suddenly collapsed to the floor. It was a heart attack! Her family could not bear her loss. Though nothing could replace her presence in their lives, Banu made sure that her family never had to struggle financially. She had clearly educated her nominee about her insurance policy and how to make a claim. They informed the insurer promptly and received a death benefit of Rs. 75 lakhs.

Situation 2:
Banu made every single premium payment on time. 4 years after buying the policy, she met with an accident. She was admitted to the hospital, but the doctors could not save her. Her family was in complete disbelief. Her nominee immediately notified the insurance company about this and started the process of a claim. As she passed away in an accident, her accidental death benefit rider was also in effect. Her family received a sum of Rs. 1 crore (75 lakhs + 25 lakhs) as compensation.

Documents Required For Claiming Term Insurance

Let's know about what documents your nominee might need when claiming term insurance -

1. Mandatory Documents:

Firstly, there are some essential documents they will definitely need to provide -
a. Claimant statement form
b. Death certificate (copy attested by the claimant).
c. KYC document of the beneficiary (copy attested by the claimant).
d. Bank details of the beneficiary.

2. Additional Requirements For Claims Within 3 Years:

Now, if the claim is made within three years -
a. Original policy document
b. Medical attendant's certificate (if available)
c. Copies of hospital or treatment records (self-attested, if available)
d. Employer's certificate (if applicable)

3. Additional Requirements For Accidental Or Unnatural Death Claims:

And if the unfortunate incident involves an accidental or unnatural death -
a. FIR and final police closure report
b. Driving licence (if the death occurred while driving)
c. Post mortem report
d. Valid vehicle insurance document (if death was due to a road traffic accident)
e. Police inquest report or inquest Panchnama
f. Newspaper article (if available)

Remember that these are just general guidelines. The exact documents needed might vary for different insurance companies. Hence, keep these details in mind to ensure a smoother process when it matters most.

Now it is time! We are going to answer the question you have been waiting for!

How Are Term Insurance Claims Settled?

Let's find out how term insurance claims are handled -

1. Death Claim Process-

Here’s what you should do -

  • Inform The Insurance Company: When your dear family member i.e., the insured passes away, what should you do first? You should immediately notify the insurance company promptly. Your nominee can initiate the necessary procedures by calling a toll-free number, emailing/SMSing, visiting the insurer's website, or visiting a branch office. This initial step sets the claim settlement process in action.

  • Submitting The Necessary Documents The next important step is to submit the required documentation. The nominee needs to gather all the documentation requested by the insurance company and complete the claim form. It is imperative that the insurer issues a system-generated acknowledgement to your nominee upon submission of these documents. For future reference, it is also ideal to have a scanned copy of the complete collection of documents on hand. Once all the mandated documents are submitted, the insurer promptly verifies them and initiates the claim intimation request without delay.

  • Providing Any Additional Documents In some cases, your insurer might require additional documents from your nominee. These requests typically come through email or another specified communication channel. It’s essential to promptly provide any requested documents to avoid delays in processing the claim.
    For instance,
    In Banu’s case, her nominee filed an insurance claim when she passed away in an accident. All the documents were submitted as requested by the insurer. However, when the insurer started verifying the documents, there was some mismatch between the time of accident in the reports and nominee’s form. Hence, they asked for any photos that were taken at the accident spot. Banu’s nominee shared them with the insurer for a speedy process.

  • Processing And Approval Of The Claim Once the nominee deposits all the necessary documents, the insurance company begins the evaluation process. They carefully review the documents to determine whether the claim can be approved. So, one thing the nominee should ensure is that all information provided is accurate. This will help avoid any potential rejection. If everything is in order and the insurance company approves the claim, the next step will become easy. The nominee will ultimately get the claim amount based on the payout option selected by insured person earlier.

2. Rider Claim Process-

This process can vary depending on the type of rider you are claiming. For example, Say Banu has paired a critical illness rider to her term insurance policy. If she gets diagnosed with cancer, stroke or any other serious disease that is listed in the policy document, she can apply for a claim. This is provided any waiting and survival periods have been met.

But what if Banu chose an accidental death benefit rider?

Here, if the accident results in Banu passing away within the specified time frame set by the insurance company, the insurer will provide an additional payout for her family. Essentially, when and how one can make a rider claim depends on both the rider type and the insurance provider. In general, to initiate a rider claim, you or your family will need to notify the insurance company about the event and submit the required documents. The insurer will then verify and process your claim.

Note: The claims process and document requirements can differ between insurers and are subject to change.

Common Reasons For Claim Rejection

Let's find out some typical reasons why insurance claims might get denied -

  • Incorrect Age Insurance premiums are closely tied to your age. If the insurer discovers that your age was misrepresented, whether on purpose or by mistake, their response might be to reject your claim altogether.
    For instance,
    Banu’s uncle also had a term insurance policy covering Rs. 50 lakhs. He was admitted to the hospital due to sudden cardiac arrest, and in a few days, he passed away. His son Nishan made an insurance claim to the insurer. His father’s date of birth was 10/9/1975. However, in the emotional turmoil Nishan was in, he mistakenly updated it as 10/9/1985. This resulted in a mismatch, and thus, the claim was rejected.

  • Wrong Address Details Insurers often offer discounted rates for online term insurance but limit coverage to specific areas. If you entered an incorrect postal code for your address to secure a lower rate, your family’s claim might be declined.

  • Incorrect Qualification Many term insurance policies are exclusively for graduates and above. If you misstate your educational qualifications, this can lead to an immediate claim rejection.

  • Wrong Occupation Insurers often exclude certain occupations or need to assess additional risks associated with specific jobs before issuing a policy. If there is a significant mismatch in the occupational information you provided, your claim could be declined.
    For instance,
    Raghu is a businessman. 5 years after buying the policy, he suffered a loss in his business and went into a pauper suit. He committed suicide and sadly passed away. Raghu had initially updated his occupation details as a salaried employee while filling out his application. When Raghu’s son made a claim with the insurer, he was worried that the claim would not be accepted because of the mismatch in source of income. He, thus, forged documents that his father was working in a company after his business went bankrupt. However, the insurer found out that it was a fabricated document and immediately rejected the claim.

  • Incorrect Income Insurers base term insurance coverage on your declared income. This practice helps prevent individuals from obtaining insurance coverage that is disproportionate to their actual income. If your stated income does not match reality, your claim might get rejected.

  • Inaccurate Medical History And Lifestyle Details Insurance companies need up-to-date medical histories and lifestyle information about you. This means that you should share details about your habits and weight to determine your eligibility for standard rates. But beware! Any discrepancies found during the claim process can result in a denial of your claim. So, ensuring accurate and honest information is crucial.

  • Inactive Policy Usually, the insurer can decline the claim if your policy has expired and the premium is overdue. Hence, you should make it a point to keep your policy active to ensure your coverage remains intact.

  • Policy Exclusions Claims that come from events or circumstances explicitly excluded in the policy terms won’t be honoured. How can you know this? By making sure to read and understand the fine print to comprehend exactly what is covered and what is not.

Wrapping It Up,

So, there you have it! Knowing the different types of term insurance claims, like death benefits or rider claims, helps you navigate the process smoothly. Understanding these claims is like having a trusty GPS with you. It guides you, ensuring you and your dear ones reach your destination safely. Stay informed, stay prepared, and give yourself the peace of mind that comes with knowing you have got everything covered.

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FAQs

If the policyholder passes away before the policy matures, the beneficiary receives the death benefit. The policy ends, and no more premiums are needed.

To ensure your claim isn't rejected, here’s what you should do -
a. Provide complete transparency during the application.
b. Keep up with premium payments to prevent a policy lapse.
c. Understand policy exclusions and avoid actions that could void your claim.
d. Keep thorough records and send in all required paperwork on time for the claim process. The possibility of any roadblocks is significantly decreased by taking these actions.

These are easily downloadable from the insurer's website, can be picked up in person at their branch office, or can be requested by email.

You can make a complaint with your insurer's grievance cell or escalate the matter to IRDAI if it takes longer than a month to resolve.

The insurance company keeps the funds if no claim is made. Hence, nominees must be made aware of the policy and the claim procedure in order for them to be able to obtain benefits when required.

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