Q1. What is the claim settlement process for life insurance policies? What are the documents required for the policy holders to submit to insurers and how long does the process take? Does the nominee get tax benefits after the death of the subscriber?

Ans. A nominee can initiate a death claim online or by visiting the life insurer’s branch. Most insurers detail the claim settlement process requirements on their respective websites.

The documents that are mostly required include the following:

• A death claim form
• The claimant’s passport size photograph
• A death certificate issued by the local authority
• A personalised cancelled cheque or bank passbook, with printed account number, IFSC and the name of the account holder
• The claimant’s valid identity proof
• Claimant’s valid address proof
• The applicant’s PAN card or Form 60 if the PAN card is not available
• The employer’s certificate (Form) for life assured, if employed. Note that it is not required for pension and annuity plans
• The original policy document; not necessary in case of a dematerialised policy document

Some additional documents required are as follows:

• Medical cause of death
• Medical records for all the treatments taken in the past. (Admission notes, history/progress sheet, discharge/death summary, test reports, etc.)

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In case the death is due to an accident, the claimants must submit the following documents:

• Postmortem report
• Police FIR (First Information Report) or Panchnama and a police final report

As per the current regulations of the Insurance and Regulatory Development Authority of India (IRDAI), the life insurer has to pay or reject a claim within 30 days of receiving all the required documents and clarifications. However, if the life insurer decides to investigate the claim, the same has to be concluded in 90 days and the decision to pay or reject the claim has to be taken within 30 days from completion of investigation. Most of the claims are decided much earlier than the maximum turnaround time allowed by the regulator.

The death claim proceeds paid to the nominee are exempt from Income Tax under section 10(10D) except in a few cases, like Employer-Employee, Hindu Undivided Family (HUF), etc.

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The author is the head of products and segments at HDFC Life.