• The death cover is determined when you purchase the policy.
• It can help your family manage daily expenses, loans and future financial needs.
• Natural and accidental deaths may be covered, subject to the policy’s terms and exclusions.
• Certain policies may provide terminal illness benefits or other applicable benefits before death.
• Depending on the policy, the payout may be structured as a lump sum or regular income.
• Your nominee needs to notify the insurer and submit the required claim documents.

For tax purposes, eligible life insurance death proceeds are generally covered by the exemption framework under Section 11 read with Schedule II of the Income Tax Act, 2025, subject to the applicable conditions.

Life insurance death cover is the amount the insurer pays to the nominee or other eligible beneficiary after the death of the life assured, provided the claim meets the policy terms.

The amount of cover is selected when you purchase the policy. Depending on the product, the structure of the payout can differ, so you should check the policy document to understand how the death cover is paid.

For example, if a person has chose Rs. 1 crore of death cover based on their income, liabilities, dependants and future financial needs. The nominee may receive the applicable payout if the insured person dies during the policy term, subject to the policy terms and conditions. The payout can help manage household expenses, repay eligible debts and meet long-term financial goals.

• Financial protection for dependents: The death cover provides a lump sum to the nominee in case of the policyholder’s demise, ensuring financial security.
• Tax-exempt payout: In most cases, life insurance death covers are exempt from income tax under Section 11 of the Income Tax Act, 2025.
• Customisable coverage: Policyholders can enhance death covers with riders or higher sum assured as per life stage and goals.
• Quick claim settlement: Most insurers process death cover claims within a few days, provided all documents are in place.
• Claim payout options: Beneficiaries can receive the payout as a lump sum or regular monthly income, depending on the chosen policy.
• Applicable across all life insurance types: Term, ULIPs, and whole life plans offer life insurance death covers tailored to different financial needs.

Common areas of cover include:

The exact cover depends on the policy selected. A separate accidental death rider may provide additional protection over and above the base death cover where available.

If you want additional protection against accident-related risks, compare plans and check which rider options are available for your profile.

Common areas to check include:

• Suicide: Life insurance policies generally contain a suicide exclusion or specific provision for an applicable period after the policy starts or is revived.
• Specific exclusions: A policy may exclude certain circumstances listed in its terms.
• Non-disclosure or misrepresentation: Incorrect or suppressed material information given during application can affect a claim.

Section 45 of the Insurance Act, 1938 sets rules on when a life insurance policy can be questioned for misstatement or suppression of material facts. The current law provides a three-year period from the relevant date specified in the Act for such action.

Always check the policy document for the exact exclusions and conditions applicable to your cover.

You get tax benefits on term insurance premiums and death covers, subject to the applicable tax laws and conditions. 

Eligible death cover payouts may qualify for tax exemption under Section 11, read with Schedule II of the Income Tax Act, 2025, subject to applicable conditions. This provision replaces Section 10(10D) of the Income Tax Act, 1961.

Tax laws are subject to change. BFL does not provide tax or investment advisory services. Please consult your advisers.

• Inform the insurer: Notify the insurer about the death of the life insured.
• Complete the claim form: Provide the required information accurately.
• Submit documents: Common documents can include the policy document, death certificate, claimant identity proof and bank details.
• Provide additional information: The insurer may request further documents depending on the circumstances of death.
• Cooperate with the assessment: Provide any clarification or documents requested by the insurer.
• Receive the payout: If the claim is approved, the applicable death cover is paid to the eligible nominee or claimant.

IRDAI's life insurance claim framework requires insurers to process claims without delay and sets requirements around requesting documents and settling or disputing claims. The exact processing time can depend on the claim and whether an investigation is required.

The life insurance death cover is generally paid to the nominee named in the policy if the insured person dies during the policy term, subject to the policy terms and conditions. The nominee is the person designated to receive the applicable payout from the insurer.

After receiving and verifying the required claim documents, the insurer processes the claim and pays the approved amount through the applicable payment method. The nominee may use the payout to manage household expenses, repay eligible debts or meet other financial needs.

The nominee named in the life insurance policy is generally eligible to receive the death cover if the insured person dies during the policy term, subject to the policy terms and applicable conditions. The nominee must submit the required documents to initiate the claim.

The insurer reviews the claim and verifies the submitted documents before processing the applicable payout. The claim amount is paid to the eligible nominee through the insurer’s applicable payment process.

Death cover can help your family manage financial responsibilities after the death of the life insured. Here are the key benefit of life insurance death cover:

The usefulness of the cover depends on the amount selected and your family's financial needs. Reviewing your life cover as your income, loans and dependants change can help keep the protection relevant.

You pay premiums to keep the life insurance policy active for the selected policy term. If the life insured dies during the covered period, the insurer assesses the claim and pays the applicable death cover to the nominee, subject to the policy terms.

The amount of death cover you choose should reflect your income, outstanding liabilities, dependants, existing savings and future financial goals. A higher cover generally requires a higher premium.

When comparing plans, check the policy term, death cover amount, premium, exclusions and available payout options. You can get a quote to estimate the premium for the level of cover you need.

Riders are optional benefits that can provide additional protection alongside the base life insurance policy. Their availability and cost depend on the policy.

These riders make your life insurance death covers more comprehensive and aligned with real-life scenarios.

Life insurance death cover is a crucial component of any life insurance policy, offering financial protection and peace of mind to the insured's family or dependents. Understanding what is covered, what is not covered, and how the death cover works is essential for making informed decisions when purchasing life insurance. By ensuring adequate coverage and timely claim processing, you can rest assured that your loved ones will be taken care of financially, even in your absence.