Premature claim
It is a premature claim if the death has occurred within two years from the commencement of the policy or the date of last revival, or medical examination. The insurer takes certain precautions before making payment under such a premature claim.
It wants to satisfy itself that it is a genuine case i.e., the correct policyholder has died and that the cause of death does not go back to a date prior to the commencement of the policy. The duration of last illness is of vital importance to eliminate any fraudulent intention. Last medical attendants’ certificate, hospital report, burial certificate, employees’ leave record, if he was an employee in a reputed firm etc, are the different records examined and normally a senior officer is deputed by the insurer to make on the spot investigation, through neighbours, colleagues or doctor of the locality.
As the revival of the policy is a de novo contract of insurance, the insurer would like to verify whether the statement contained in the declaration of good health given at the time of revival is correct.
If such a statement is proved fraudulent relating to a material fact, the claim, may be rejected. Life insurance is a contract of utmost good faith and good faith has to be observed, not only at the time of the proposal, but also at the time of the revival of the policy whenever it is done.
In case there is a rival claimant to the insurance money, the insurer can get a valid discharge by paying to the nominee. The rival claimant can approach a court of law which may order to stop the payment till the case is finally disposed of.
However if there is no nomination under the policy, the insurer shall await a valid title through either a will or a probate as a letter of administration or a succession certificate. It may take quite sometime to get such certificate from the court and in the meantime the family may suffer.
A good agent therefore shall ensure that there is a valid nomination or assignment. If there is an assignment, the policy money is paid to the assignee. If there is a reassignment of the policy, it is necessary that a fresh nomination is done, as assignment invalidates the existing nomination.
However, if there is a nomination in favour of the insurer for taking any loan, the nomination is said to be unaffected subject to the claim of the insurer.
If the premature death has been due to an accident, it is necessary to get a police inquiry report in lieu of the attending physician certificate. Suicide, if it has taken place within one year of the beginning of the risk, exempts the insurer from the liability of the payment of the claim. The propensity to commit suicide is a moral hazard and is not expected to continue beyond one year.
If the policyholder disappears and he has not been heard of for 7 years by those who would naturally have heard of him, if he had been alive, he is presumed dead as per Sec 108 of the Indian–Evidence Act, 1872. However, it is necessary to keep the policy in force during this period by payment of the due premiums on the due dates.
It wants to satisfy itself that it is a genuine case i.e., the correct policyholder has died and that the cause of death does not go back to a date prior to the commencement of the policy. The duration of last illness is of vital importance to eliminate any fraudulent intention. Last medical attendants’ certificate, hospital report, burial certificate, employees’ leave record, if he was an employee in a reputed firm etc, are the different records examined and normally a senior officer is deputed by the insurer to make on the spot investigation, through neighbours, colleagues or doctor of the locality.
As the revival of the policy is a de novo contract of insurance, the insurer would like to verify whether the statement contained in the declaration of good health given at the time of revival is correct.
If such a statement is proved fraudulent relating to a material fact, the claim, may be rejected. Life insurance is a contract of utmost good faith and good faith has to be observed, not only at the time of the proposal, but also at the time of the revival of the policy whenever it is done.
In case there is a rival claimant to the insurance money, the insurer can get a valid discharge by paying to the nominee. The rival claimant can approach a court of law which may order to stop the payment till the case is finally disposed of.
However if there is no nomination under the policy, the insurer shall await a valid title through either a will or a probate as a letter of administration or a succession certificate. It may take quite sometime to get such certificate from the court and in the meantime the family may suffer.
A good agent therefore shall ensure that there is a valid nomination or assignment. If there is an assignment, the policy money is paid to the assignee. If there is a reassignment of the policy, it is necessary that a fresh nomination is done, as assignment invalidates the existing nomination.
However, if there is a nomination in favour of the insurer for taking any loan, the nomination is said to be unaffected subject to the claim of the insurer.
If the premature death has been due to an accident, it is necessary to get a police inquiry report in lieu of the attending physician certificate. Suicide, if it has taken place within one year of the beginning of the risk, exempts the insurer from the liability of the payment of the claim. The propensity to commit suicide is a moral hazard and is not expected to continue beyond one year.
If the policyholder disappears and he has not been heard of for 7 years by those who would naturally have heard of him, if he had been alive, he is presumed dead as per Sec 108 of the Indian–Evidence Act, 1872. However, it is necessary to keep the policy in force during this period by payment of the due premiums on the due dates.