- Date : 30/06/2023
- Read: 3 mins
Learn about the life insurance claim process in India, nominee vs. legal heir rights, and the significance of insurance laws for rightful settlements. A must-read guide.
Life insurance policies in India are governed by specific regulations and procedures to facilitate the smooth settlement of claims. The Insurance Laws (Amendment) Act of 2015 stipulates that if an immediate family member is named as the nominee, they will be entitled to receive the insurance proceeds. Spouses, children, and parents are the primary beneficiaries under the policy, superseding the rights of legal heirs.
Also Read: Death Claim: Is It Possible To Claim From More Than One Life Insurance Policy?
Treatment of non-beneficial nominees and legal heirs' claims
Non-beneficial nominees such as siblings, friends, or relatives can act as trustees, enabling legal heirs to claim the money in the future based on the policy in question. In cases where legal heirs seek to claim the proceeds according to Hindu law, they must provide a legal heirship or succession certificate issued by the court.
Also Read: Why Should Legal Heirs File Income Tax Returns For The Deceased Person?
Disbursement of policy proceeds
It is important to note that insurance companies disburse the policy proceeds to the nominee, regardless of the legal heir. However, if the legal heir wishes to claim the money based on Hindu Law, they must approach the court to establish the appropriate distribution.
Before the amendment, nominees were not considered beneficiaries of life insurance policies. They served as mere recipients of the insurance proceeds on behalf of the policyholder's legal heirs. However, when legal heirs are receiving the claim proceeds, additional documentation, such as a succession certificate issued by a competent court, is required.
Life Insurance Corporation (LIC) claim process
Taking the example of Life Insurance Corporation (LIC), India's largest insurance company, the claimant must submit a statement with details about the deceased and themselves, along with a certified extract from the death register.
In cases where the policy does not have a nominee, it becomes necessary to provide proof of the policyholder's age, the original policy document, and ownership documents. If the policyholder's demise occurs within three years of the first premium payment or policy revival, a medical attendant's certificate is also required.
Additional documents, such as Claim Form B1 (for hospital-treated life assured) and Claim Form B2 (to be completed by the attending medical practitioner), along with certificates of identity, burial, or cremation, need to be furnished. In the event of an unnatural death, the first information report, post-mortem report, and police investigation report should be submitted.
If a claim is rejected, claimants have the opportunity to make a representation for reconsideration by the review committees of the zonal office and the central office.
Understanding the intricacies of insurance laws, policies, and the claim process is essential for both nominees and legal heirs to ensure a smooth and rightful settlement of life insurance proceeds by the applicable regulations in India. By adhering to these guidelines, individuals can navigate the insurance landscape with clarity and confidence.
Find the latest articles on My Family here.
Life insurance policies in India are governed by specific regulations and procedures to facilitate the smooth settlement of claims. The Insurance Laws (Amendment) Act of 2015 stipulates that if an immediate family member is named as the nominee, they will be entitled to receive the insurance proceeds. Spouses, children, and parents are the primary beneficiaries under the policy, superseding the rights of legal heirs.
Also Read: Death Claim: Is It Possible To Claim From More Than One Life Insurance Policy?
Treatment of non-beneficial nominees and legal heirs' claims
Non-beneficial nominees such as siblings, friends, or relatives can act as trustees, enabling legal heirs to claim the money in the future based on the policy in question. In cases where legal heirs seek to claim the proceeds according to Hindu law, they must provide a legal heirship or succession certificate issued by the court.
Also Read: Why Should Legal Heirs File Income Tax Returns For The Deceased Person?
Disbursement of policy proceeds
It is important to note that insurance companies disburse the policy proceeds to the nominee, regardless of the legal heir. However, if the legal heir wishes to claim the money based on Hindu Law, they must approach the court to establish the appropriate distribution.
Before the amendment, nominees were not considered beneficiaries of life insurance policies. They served as mere recipients of the insurance proceeds on behalf of the policyholder's legal heirs. However, when legal heirs are receiving the claim proceeds, additional documentation, such as a succession certificate issued by a competent court, is required.
Life Insurance Corporation (LIC) claim process
Taking the example of Life Insurance Corporation (LIC), India's largest insurance company, the claimant must submit a statement with details about the deceased and themselves, along with a certified extract from the death register.
In cases where the policy does not have a nominee, it becomes necessary to provide proof of the policyholder's age, the original policy document, and ownership documents. If the policyholder's demise occurs within three years of the first premium payment or policy revival, a medical attendant's certificate is also required.
Additional documents, such as Claim Form B1 (for hospital-treated life assured) and Claim Form B2 (to be completed by the attending medical practitioner), along with certificates of identity, burial, or cremation, need to be furnished. In the event of an unnatural death, the first information report, post-mortem report, and police investigation report should be submitted.
If a claim is rejected, claimants have the opportunity to make a representation for reconsideration by the review committees of the zonal office and the central office.
Understanding the intricacies of insurance laws, policies, and the claim process is essential for both nominees and legal heirs to ensure a smooth and rightful settlement of life insurance proceeds by the applicable regulations in India. By adhering to these guidelines, individuals can navigate the insurance landscape with clarity and confidence.
Find the latest articles on My Family here.
