For any life insurance company, a death claim is the moment of truth. The insurance regulator has put in place rules for fair and prompt settlement of claims:
* The policy will mention the primary documents required to be submitted by a claimant in support of a claim.
* The claim will have to be paid or disputed, giving all reasons, within 30 days from date of receipt of documents or clarifications sought by the insurer.
* If investigation is required by insurer on the death claim, it has to be complet-ed within six months of lodging claim.
* Where a claim is ready for payment but payment cannot be made due to improper identification of the payee, it will be paid with interest at the rate applicable to a savings bank account.
* If insurer delays in processing a claim, it will have to pay interest at a rate which is 2% above the savings bank rate.
* A contestable claim refers to a life insurance policy that is less than three years old from the date of issuance or commencement of risk or revival of the policy or rider to the policy, whichever is late, when the insured person dies.
* A non-contestable claim cannot be contested by the insurer because the policy has been in force for three years.
However, non-contestable does not imply the claim will be paid immediately.
* For repudiation of policy on ground of misstatement or suppression of mater-ial fact, and not on ground of fraud, premiums collected on the policy till date of repudiation will be paid to the legal representatives.
* If fraud is established, insurer has to communicate in writing to the legal rep-resentatives or nominees or assignees of the insured within a period of 90 days from the date of such repudiation.