According to the Insurance Regulatory and Development Authority of India (IRDAI) annual report for 2020-2021, in the individual life insurance sector, life insurers paid 10.84 lakh claims out of a total of 11, 01 lakh claims in 2020-21, with a total profit amounting to Rs. 26,422 crores. The number of rejected claims was 9,527 for an amount of Rs 865 crore and the number of rejected claims was 3,032 for an amount of Rs 60 crore. Outstanding claims at the end of the year were 3,055 for Rs 623 crore.
According to the annual report, “insurers have been urged to settle death claims related to COVID-19 quickly, developing a faster claims process to adapt to the emerging situation.”
According to the IRDAI annual report for 2019-2020, in the case of individual life business, life insurance companies paid out 8.46 lakh claims on individual policies, with a total payout of Rs 18,042 crore in 2019-20. The number of rejected claims was 8,927 for an amount of Rs 555 crore and the number of rejected claims was 2,262 for an amount of Rs 20 crore.
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How to make a declaration of death in life insurance?
According to the IRDAI consumer education website, when a person with a life insurance policy dies, a notice of claim should be sent to the insurance company as soon as possible. The assignee or the agent under the policy may do so. The same goes for any close relative or agent who administers the policy.
The notice of claim must contain information such as the date, place and cause of death. The insurance agent has a duty to assist the family/assignee of the insured in dealing with the insurance company to complete the formalities of a claim.
The life insurance company will ask for the following documents:
- Completed claim form (provided by insurance company)
- Death certificate
- Policy document
- Deeds of transfers/reassignments if applicable
- Legal proof of title, if the policy is not assigned or named
- Executed and attested release form
- Other documents such as medical attendant’s certificate, hospital certificate, employer’s certificate, police investigation report, autopsy report, etc. may be required, as the case may be.
If the insurer is satisfied with the authenticity of the claim, it will notify the claimant and pay the amount of the claim in the event of death.