Unit Linked Insurance Plans (ULIPs) are a popular financial instrument in India, offering both investment opportunities and life insurance coverage. In the unfortunate event of the policyholder’s demise, the ULIP death cover ensures financial security for the nominee or legal heir. Understanding how to claim ULIP death covers is essential to ensure a smooth and hassle-free process. This article provides a comprehensive guide on ULIP death covers, eligibility for claims, the step-by-step claim process, required documents, and the time frame for claim settlement.
Understanding ULIP death covers
ULIP death covers provide financial protection to the nominee in case of the policyholder’s untimely death. Here are some key aspects:
Dual benefit: ULIPs offer both an investment component and a
life insurance cover.
Sum assured or fund value: The nominee receives either the sum assured or the fund value, whichever is higher.
Additional riders: Some ULIPs offer accidental death or critical illness riders that provide extra benefits.
Premium waiver: In some plans, future premiums are waived, and the fund continues to grow until maturity.
Tax-free benefits: Death covers under ULIPs are exempt from tax under Section 10(10D) of the Income Tax Act.
Who can claim ULIP death covers?
The claim process is designed to ensure that the rightful beneficiary receives the financial benefits. Eligible claimants include:
Nominee: The person appointed by the policyholder in the policy document.
Legal heirs: If no nominee is assigned, the legal heirs of the policyholder can claim the amount.
Assignee: If the ULIP has been assigned to a lender or financial institution, they may claim the sum assured.
Trustee: In cases where the policyholder has created a trust, the trustee can file the claim on behalf of the beneficiaries.
Court-appointed representative: If disputes arise, the court may designate an individual to claim the death cover.
Step-by-step process to claim ULIP death covers
Filing a claim for ULIP death covers involves a structured process. Here are the key steps:
Inform the insurer: Notify the insurance provider about the policyholder’s death at the earliest.
Obtain claim form: Collect the death claim form from the insurer’s branch office or website.
Gather required documents: Prepare necessary documents, including the death certificate, policy document, and nominee’s ID proof.
Submit documents: Fill out the claim form and submit it along with supporting documents.
Verification process: The insurer will review and verify the details before processing the claim.
Claim settlement: Upon successful verification, the insurer disburses the death cover to the nominee’s bank account.
Documents required for ULIP death claim
Providing the right documents ensures a smooth claim settlement process. Here are the essential documents:
Original policy document: Proof of the ULIP policy.
Death certificate: Issued by the municipal authority as proof of the policyholder’s death.
Nominee’s ID proof: Aadhar card, PAN card, passport, or voter ID.
Nominee’s bank details: Cancelled cheque or bank statement for fund transfer.
Medical records (if required): In case of death due to illness, medical reports may be needed.
Police report (if applicable): Required in case of accidental or unnatural death.
How long does it take to receive ULIP death covers?
The claim settlement timeline varies depending on the insurer and the completeness of documentation. Here is a general timeframe:
Claim intimation: The nominee should inform the insurer within 30 days of the policyholder’s death.
Document verification: Typically takes 7-15 working days.
Claim approval and settlement: Once verified, the insurer processes the payout within 30 days.
Delay in complex cases: If additional investigation is required, settlement may take up to 90 days.
Regulatory guidelines: As per IRDAI regulations, insurers must settle valid claims within 30 days of document submission.
Conclusion
ULIP death covers provide crucial financial support to beneficiaries, ensuring financial stability in difficult times. Understanding the claim process, eligibility, required documents, and settlement timelines helps nominees efficiently secure the benefits without delays. By following the proper procedures, nominees can receive the death cover smoothly and use it effectively for future financial planning.
