Life Insurance Claim Settlement in India (2025) - Part 2: Process, Documents & Timelines

Part 2 - Claim Settlement Process, Documents Required, Timelines (TAT) & Customer Rights

Step-by-Step Life Insurance Claim Settlement Process

The claim settlement process begins when the insurance company receives information about a claim. Under the latest IRDAI regulations, insurers are required to make the claim process simple, transparent, and customer-friendly.

The following steps explain the process in simple language.

Step 1: Intimate the Claim

The nominee, legal heir, assignee, or policyholder (for maturity claims) should inform the insurance company as soon as possible.

Although IRDAI encourages early intimation, a genuine claim should not be rejected merely because there was some delay in informing the insurer if the delay is reasonably explained and the claim is otherwise valid.

Step 2: Register the Claim

Once the insurer receives the claim request, a claim reference number is generated.

Keep this number safely.

Step 3: Submission of Documents

The insurer will provide a list of documents required.

Incomplete documentation is one of the biggest reasons for claim delays.

Step 4: Document Verification

If additional documents are required, the insurer should ask for them at one time, as far as possible, instead of repeatedly asking for documents in stages.

Step 5: Investigation (Only If Required)

Not every claim is investigated.

An investigation does not mean the claim will be rejected. It is simply a verification process.

Step 6: Claim Decision

The insurer should communicate its decision clearly and transparently.

Step 7: Payment of Claim

Once approved, the claim amount is generally credited directly to the claimant's registered bank account.

Documents Required for a Death Claim

Although requirements may vary slightly among insurers, the following are commonly required.

Basic Documents

Additional Documents for Hospital Death

Additional Documents for Accidental Death

Additional Documents for Natural Death at Home

Documents for Maturity Claim

Many insurers now process maturity payments digitally if KYC and bank details are already updated.

Documents for Rider Claims

Depending on the rider:

For Critical Illness

For Disability Rider

For Waiver of Premium

Early Claim vs Non-Early Claim

Early Claim

A death occurring shortly after policy commencement or revival is commonly referred to as an "early claim."

Such claims may receive additional scrutiny to verify disclosures made at the proposal stage.

Investigation does not automatically mean the claim is doubtful.

Non-Early Claim

Claims arising after a longer policy duration are generally processed based on document verification unless there are specific reasons requiring further investigation.

Where Can You Find Claim-Related Information in the Policy Document?

Every policyholder should read the policy document carefully.

Always keep the policy bond and benefit illustration safely.

Turnaround Time (TAT) for Claim Settlement

Under the IRDAI framework, insurers are expected to process claims promptly and fairly.

Acknowledgement

The insurer should acknowledge receipt of the claim and inform the claimant of any additional requirements promptly.

Document Requirement

Where additional documents are needed, insurers should ask for them in one communication, as far as practicable, to avoid unnecessary delays.

Decision on Claim

Once all required documents and clarifications are received, insurers are expected to decide the claim within the timelines prescribed under the applicable IRDAI regulations. If investigation is required, it should be completed without undue delay and within the regulatory time limits.

Delay in Payment

If there is a delay attributable to the insurer after the claim becomes payable, the insurer may be liable to pay interest as provided under the applicable IRDAI regulations.

What Happens During Claim Investigation?

The objective is to establish the facts and ensure the claim is settled correctly.

Customer Rights During Claim Settlement

Every policyholder and nominee has important rights.

These include:

Right to Fair Treatment

Every genuine claim should be handled fairly without discrimination.

Right to Transparent Communication

Right to Timely Settlement

Claims should be processed within the timelines prescribed by IRDAI.

Right to Receive Reasons for Rejection

If a claim is rejected, the insurer should provide the reasons in writing.

Right to Raise a Grievance

if they are dissatisfied.

Right to Interest in Eligible Cases

Where payment is delayed due to reasons attributable to the insurer after the claim has become payable, the applicable IRDAI regulations provide for payment of interest in eligible cases.

Responsibilities of the Nominee

TEISH Finverse Expert Tips

✔ Inform your family about your life insurance policies.

✔ Update nominee details whenever your family situation changes.

✔ Keep Aadhaar, PAN and bank details updated with the insurer.

✔ Do not conceal any medical information while buying the policy.

✔ Preserve all hospital records if the insured is undergoing treatment.

✔ Never submit forged or altered documents.

✔ Keep photocopies or scanned copies of every document submitted.

Coming Up in Part 3