Page 48 - Insurance Times August 2020

recently due to the cyclone in West Bengal. Deaths due to Nominees have first right over life insur-
coronavirus are also covered.
ance claims, not legal heirs
Deaths due to pre-existing health conditions As you deal with the trauma of losing a loved one, making
Before you buy a life insurance policy, you need to disclose a life insurance claim may become daunting if you don’t
all material information such as pre-existing diseases and know how to go about it. One of the most important as-
whether you smoke or drink or not. If the death occurs pects to consider is the difference between the nominee
because of a pre-existing health condition, then the claim and heir when it comes to insurance claims.
is not honoured by most companies. Besides, sexually trans-
mitted diseases like HIV or AIDS are also not covered. Insurance policy is treated as an estate of the deceased
policyholder. Legal heirs have a right over the policy as long
Deaths due to accidents as the assets of the deceased policyholder devolve upon her.
Although deaths due to all accidents are covered by insur- However, in life insurance, there is a concept known as
ance, there are some exceptions. Accidental death under beneficial nominee. This provision was introduced in the
the influence of intoxication or drugs or if the insured is Insurance Laws (Amendment) Act, 2015. If an immediate
involved in criminal activity is not entitled to any payouts. family member (parents, or spouse, or children) is made the
"All life insurance policies that offer death benefits do cover nominee, then the proceeds will go to the intended per-
death due to an accident. You don't need to buy a rider for son. Legal heirs will not have any claim on the money. “If
the purpose. But, if you do buy an accidental death rider, it the nominee is not survived by the insured, the proceeds
enhances risk cover of base life insurance plans at a small will go to the legal heirs," said Mukesh Jain, corporate law-
additional cost," says Samit Upadhyay, Chief Financial Of- yer and founder of Mukesh Jain and Associates, a Mumbai-
ficer and Head Product, Tata AIA Life. based law firm.
Deaths outside the country In the absence of a nominee, the legal heir can claim the
Life insurance policies are universal. So, all policies will cover insurance proceeds. “Apart from the claim intimation let-
deaths outside the country if you submit valid proofs. The ter and other requisite documentation like death certifi-
only exception, however, is if you are a frequent traveler cate, ID proof of the beneficiary, policy papers, discharge
to countries categorised as danger zones countries such as form (if any), post mortem report and hospital records (in
those in Africa and the Gulf and do not disclose this infor- case of unnatural death), the legal heir needs to submit the
mation while buying the policy, and unfortunately die there, succession certificate issued by a competent court which
then the insurance companies will not settle the death establishes the right of the legal heir over the assets of the
claim. deceased policyholder, including the insurance proceeds,"
"If a death happens in these countries then the insured said Vatsala Sameer, company secretary, Canara HSBC Ori-
travel record is checked. In case, the client had a previous ental Bank of Commerce Life Insurance.
travel record then the claim will be repudiated on grounds If there are multiple legal heirs and only one is claiming the
of hiding the material fact. Please note that Proposal Form proceeds, then all other legal heirs need to agree and ex-
asks for travel record of last two years and if you do have a press their consent to the insurer for that. “The affidavit-
record of travel in danger zones then insurance is not al- cum-indemnity signed by all the legal heirs protects the
lowed," Kumar of Insurance Samadhan points out. insurer from similar and separate claims under the policy,"
Deaths due to pregnancy or childbirth said a spokesperson from PNB Metlife Insurance Co. Ltd.
If the death occurs during childbirth or due to complications The legal heir can make a claim when there is no nomina-
in pregnancy, then it is not covered by a life insurance policy. tion any time before the maturity of the policy, or if the
insured has not requested a fresh nomination in case of the
Life insurance policy is meant to support your family finan-
cially if you are not around. So, just buying the policy death of the nominee or in case of death of the nominee
doesn't suffice the purpose. You need to be well aware of after the claim is filed but before its settlement.
all policy exclusions so that if an eventuality happens, your In case the deceased has more than one child and has not
nominee doesn't face the death claim rejection. "It is im- nominated all of them, a claim can be lodged only by the
portant to note that exclusions may differ from product to nominated child and the insurer shall pay the proceeds to
product. Exclusion clauses are mentioned in the policy docu- the nominee only. Other children can stake claim to their
ment, so do read the proposal form carefully," says Anil shares by moving a competent court of law, said the PNB
Kumar Singh, Chief Actuarial Officer, Aditya Birla Sun Life Metlife spokesperson. So get clarity on your situation and
Insurance. act accordingly.

48 The Insurance Times, August 2020