After the death of the policyholder, the family need not pay any future premiums, while the policy still continues, with its benefits intact.
With old policies that were bought long ago, policyholders are seen to have either forgotten about the policy or didn't understand the policy, and hence, didn't feel the need to inform the family about it.
Insurance penetration has always been low in our country. However, the current pandemic has led to higher awareness as well as averseness towards risk, because of which people are opting for insurance covers, especially health plans. Having said that, life insurance policies have always been opted by people more than health insurance.
Life insurance gives financial security to the policyholder’s family in case something happens to the policyholder. Even though many people opt for life insurance plans, there have been various cases where the family of the policyholders was not informed of such policies. Experts say this is usually seen with old policies that were bought long ago and policyholders have either forgotten about the policy or didn’t understand the policy, and hence, didn’t feel the need to inform the family about it. With such cases, even if the family faces a financial crisis after the death of the policyholder, they do not get any financial help.
Kamlesh Rao, MD, and CEO, Aditya Birla Sun Life Insurance, says, “It is thereby important for individuals to keep a trusted family member informed regarding one’s insurance covers.” If you find any policy document years after the death of the policyholder, there is still a chance to get the claim settlement.
Rao adds, “Firstly, one should immediately intimate the insurance company and raise the claim.” While raising a claim, you will also have to provide documents such as – the original policy document of the insurance policy, copy of the death certificate, the filled-up claim settlement form along with the KYC documents, establishing the relationship of the life assured, and the beneficiary.
You will also have to provide a copy of the canceled cheque. Additionally, ensure that you have the original KYC and the death certificate of the policyholder handy for verification. Then the insurance companies further evaluate the documents and process the claim.
Usually, after the death of a policyholder, the family receives the death benefit, to help them fulfill their future financial needs. If the policyholder dies during the premium paying term, the nominee gets the death benefit, which is the basic sum assured along with bonuses, if any. These payouts are carried for as long as mentioned in the policy. In case the policyholder dies after the premium paying period, the nominee receives the sum assured and the lump sum of payout of whatever is left in the policyholder’s account.
After the death of the policyholder, the family need not pay any future premiums, while the policy still continues, with its benefits intact. As no more premium is required to be paid, the family, if not aware of the policy, doesn’t come to know about it.