Every year, lakhs of LIC policies mature, and thousands of policies become due for payment due to death claims. However, in some cases, claimants and nominees do not come forward to claim their rightful money. So, what happens to these funds when they remain unclaimed?
Unclaimed funds held by the Life Insurance Corporation of India (LIC) often become a topic of discussion in Parliament, where members frequently ask the government for data on policyholders’ unclaimed money.
In response to queries in the Lok Sabha in the recently concluded Winter session, the Minister of State in the Ministry of Finance, Pankaj Chaudhary, shed light on this issue and outlined the steps being taken to address it.
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Total unclaimed LIC funds
Over the last five years, LIC has reported significant amounts of unclaimed funds due to non-settlement of maturity and death claims. The details are as follows:
| Total Unclaimed and outstanding Maturity Claims | Total Unclaimed Death Claims | |||
| years | Number | Amount (Cr) | Number | Amount (Cr) |
| 2023-24 | 3,72,282 | 880.93 | 10 | 0.14 |
| 2022-23 | 3,73,329 | 815.04 | 31 | 0.81 |
| 2021-22 | 3,24,813 | 897.1 | 24 | 0.24 |
| 2020-21 | 3,13,117 | 652.95 | 35 | 0.43 |
| 2019-20 | 2,43,790 | 480.78 | 89 | 2.02 |
Reasons for unclaimed LIC funds
A significant number of policyholders or their nominees fail to claim maturity benefits, death benefits or other payouts. This leads to the accumulation of unclaimed funds, which LIC and the government aim to minimise through targeted measures.
Steps taken to address unclaimed funds:
The government and LIC have implemented several initiatives to ensure rightful claims of these funds:
Settlement of outstanding claims:
-Outstanding amounts are settled in favor of claimants upon receipt of valid requests.
-Funds that remain unclaimed for over 10 years are transferred to the Senior Citizens’ Welfare Fund as per the 2016 rules. Claimants can still claim these amounts for up to 25 years after the transfer.
Proactive communication:
-Reminder letters are sent via ordinary or speed post, email, and SMS.
-LIC officials visit policyholders’ residences to assist with requirements and settlement.
Public awareness campaigns:
-Advertisements in print and digital media, as well as radio jingles, encourage policyholders to claim their dues.
-Policy service camps are organized in various residential localities.
Digital facilitation:
-Unclaimed claim data and required documentation are listed on LIC’s website.
-Online registration of NEFT details is available through LIC’s portal.
Simplified claim process:
-Claims can be settled with valid NEFT details, simplifying the process.
-Policyholders can submit requirements at any LIC branch for convenience.
Use of technology:
-Credit bureau agencies help update contact details of policyholders.
Continuous follow-up:
-Agents and Development Officers are tasked with following up to ensure compliance with claim requirements.
Special focus on rural and semi-urban areas
The government has emphasised raising awareness and simplifying the claim process, particularly for policyholders in rural and semi-urban areas. Policy service campaigns and targeted outreach in these regions are part of the broader strategy.
Ensuring policyholders’ rights
These measures highlight the government’s commitment to ensuring that policyholders and their nominees can access their rightful funds without unnecessary delays or complications.