CLAIM MANAGEMENT AND CLAIM SETTLEMENT

Presented to: Presented by:

Mr. Abhishek Parikh Ushas Gopinathan (53)

Priyanka Patel (75)

Sweety Paul (87)

Divya Vyas (97)

Introduction

Settlement of claims is the culmination of a

contract of life insurance.

Claim settlement occupies an important place in the

total operations of an insurance company.

IRDA has issued instructions to all insurance

companies to settle claims within a period of 30

days.

Types of claims

1. Maturity claims

2. Death claims

3. Accident and disability claims

Settlement of claims under insurance policy depend

upon the nature of the claim, eligibilities to policy

money, proof of the happening of the event insured

against, proof of title etc.

Maturity claims

The payment to the life assured/assignee at the

end of the stipulated term of the policy is called

maturity claim.

Payment of maturity claims is the easiest to

manage:

1. There is no need on the part of the policyholder

to prove the happening of the event.

Contd…

2. The policy holder is alive so proof of title does not

pose any problem.

3. The insurance company need not wait any claim

from the policyholder and take initiative to settle

the claims expeditiously.

Contd…Procedures/practices to make pmt. of maturity claim

(LIC):

1. Branch offices – servicing and accounting centers.

2. A list of policies is generated.

3. These lists are of two types – one in respect of

maturities and the other in respect of survival

benefits under money back type of policies.

4. Action is initiated about three months in advance of

their due dates.

Contd…

Reasons to initiate action in advance:

1. To build up the image.

2. Policy holders – happy and satisfied.

3. A great boost to the field force.

4. From accounting point of view, it is a good and

prudent practice.

Contd…

In view of these reasons, all branch offices try

excellent performance in respect of two ‘key result

areas’ viz.

1. ‘zero’ ratio of outstanding maturity claims.

2. A very high ‘speed ratio’.

Contd…

To claim a maturity benefit the requirements are

following:

1. A discharge voucher to be sent in advance

2. Policy document

3. Any deed of assignment, if the same was executed on a

separate stamp paper.

4. Age proof (if not submitted)

5. Identity proof

Contd…

In case of misplacement of documents the

corporation settles maturity claims on the basis of

an indemnity bond to be executed on a non-judicial

stamp paper of the value of Rs. 100 by the policy

holder along with a surety of sound financial

standing.

Death Claims

Great importance in the total operations of any life

insurance company.

Unlike in maturity claims, the policy holder is not

alive.

Problems in settlement of death claims:-

1. Obtaining satisfactory proof of death

2. Obtaining satisfactory proof of title

Contd…

Letter of intimation should contain the following

particulars:-

1. Policy number and the name of the policy

assured. These two should match otherwise the

policy no. must be wrong.

2. Date of death, on which depends the status of

the policy and the amount payable.

3. Name and address of the claimant as

requirements are to be called from them.

Contd…

In considering a death claim, it becomes necessary to

verify the duration of the policy.

In some cases alternative proofs are also considered:-

1. Death in air crash – records of passengers

2. Disappearance on board a ship – logbook

3. Presumption of death – date of death as declared by

court

Contd…

To claim a death benefit the requirements are as

follows:-

1. Policy document

2. Assignment deed

3. Age proof (if not submitted)

4. Certificate of death

5. Legal evidence of title

6. Discharge voucher

Accident and disability benefit

Settlement of accident benefit:-

1. Death should be due to accident

2. Death should take place within a specified period

of time after the accident.

3. Proof satisfactory to the insurance company

should be submitted.

Contd…

4. The policy must be in full force at the time of death.

5. There are also exclusions in considering granting

accident benefit.

- Liquor

- Drug

- Breach of law

- War like operations

- Police or police like operations

- Suicide

- Hazardous sports

Contd…

Settlement of disability benefit:-

o Types of disability benefits

1. Waiver of premium

2. Payment of the income to the life assured

Requirements for the disability benefit:-

1. First information report of the police

Contd…

2. Records of the hospital where the treatment was

given.

3. Statement of the extent of disability

Reference“Life Insurance”, volume – 1, a

journal of ICFAI.