Types of Claims in Life Insurance (India) – An Expert’s Guide

Life insurance is a promise: pay regular premiums, and the insurer will deliver certain benefits when specific events happen (death, maturity, survival etc.). However, the “claim” is the moment that promise is invoked. Knowing the types of claims, when they are payable, what documentation is needed, and what regulations govern them is crucial for policyholders, nominees, agents, and insurers alike.

This guide explains the different types of claims in life insurance, their features, regulatory rules in India, common hurdles, and how to ensure smooth settlement.

What is a Life Insurance Claim?

A claim in life insurance is a formal request by the insured person (or nominee / beneficiary) asking the insurer to pay the benefits stipulated under the policy when a triggering event occurs. The triggering event could be the death of the life assured, survival to the end of the term, or other events defined in the policy (for example, critical illness, disability, surrender etc.).

Under Indian regulations, insurers are obligated to settle valid claims in a prescribed time and manner; failure to do so attracts regulatory penalties and erodes trust. The Protection of Policyholders’ Interests Regulations, 2017 (by IRDAI) lays down timelines for different claim types.

Major Types of Life Insurance Claims in India

Broadly, life insurance claims in India fall into two high-level categories:

• Death Claims
• Survival Claims

And under “survival claims” there are several sub-types. Let us examine these in detail.

Death Claims (Death Benefit Claims)

What is a Death Claim?

A death claim is payable when the life insured dies during the policy term (for term, endowment, whole life, unit-linked or other plans that have death benefit). The nominee or legal heir of the deceased is entitled to claim the sum assured (plus any bonuses, additional benefits, or riders if applicable).

Situations & Variants

• Within 2 years (“early death”) versus after 2 years: Some policies have enhanced scrutiny or exclusion periods in early years. For example, if the death occurs within a certain period (often first 1-2 years) from policy issuance, non-disclosure or misstatements are more carefully examined.
• Natural vs Unnatural death: If death is accidental, homicide, or due to unnatural causes, extra documentation (post-mortem, FIR, police report) might be required.
• Rider linked death claims: If an accidental death or accidental death benefit rider is attached, the nominee may claim separately under that rider, which may have enhanced sum assured or additional payout.

Process & Time Limits

• The nominee must intimate the insurer after death with required documentation (death certificate, original policy document, identity proof, etc.).
• Under IRDAI regulations:
  • Insurer must call for all documents needed within 15 days of receipt of death intimation.
  • After receipt of all relevant papers / clarifications, insurer must settle, reject, or repudiate the claim within 30 days.
  • If further investigation is required, that investigation should be completed within 90 days of intimation; thereafter, claim settlement (if valid) should be done within 30 days.

Survival Claims (Claims While Insured is Alive)

These are claims payable to the policyholder while still alive, under specified events. They do not terminate the contract necessarily (unless policy matures, is surrendered etc.). Key types include:

4.1 Maturity Claim

• Definition: If the policyholder survives until the end of the policy term, the policy “matures” and the insurer pays the maturity benefit (sum assured plus bonuses or declared benefits). Common in endowment, money back, whole life, and traditional retirement / pension plans.
• Pre-conditions: All premiums paid up to date; no lapses; policy in force till maturity. Bank account / payee details updated. Original policy document etc. needed.

4.2 Survival Benefit Claim (Money-Back / Periodic Survival Instalments)

• In money-back or periodic payment type policies, policy provides survival benefits (partial benefit instalments) at certain intervals during the policy term, if the insured is alive at those points. These are sometimes called periodic survival claims or “instalments of survival benefit.”
• For example: You have a 20-year money back plan; it provides payouts after 5, 10, 15 years, then at maturity. At those interval years, if alive, you get portions of sum assured.

4.3 Surrender Value Claim

• Definition: If for some reason the policyholder does not want to continue with paying premiums (or continuing policy), he/she may surrender the policy (terminate contract early) and receive a surrender value, which is the amount payable under the policy for early exit, subject to policy terms. Often available only after a minimum number of years (e.g. 3 years).
• Surrender reduces future benefits. If the policy has cash value or accumulated bonuses or fund value (in ULIPs), the surrender claim will be accordingly.

4.4 Rider Claims (Survival / Other Contingency Benefits)

• Riders are add-on benefits one purchases for extra premium. Some riders trigger payouts while insured is alive — e.g., critical illness, disability, permanent total disability, sometimes hospitalization benefit, waiver of premium etc. If the event covered under the rider occurs, then the insured (or nominee) can file a claim under the rider. These are survival/contingent claims.

4.5 Annuity / Pension Claims

• If the policy includes an annuity or pension plan, once the policyholder reaches the date when annuity payments begin (deferred), regular payments begin (monthly, quarterly, yearly etc.) as per contract. These payments are “claims” of sorts (benefits) once the policyholder qualifies. These are survival benefit claims.

Other / Specific / Special Claim Types

Beyond the basic death & survival claims, there are special or hybrid claims:

• Partial maturity / instalment maturities: As noted in money back plans or some child education plans, partial payments are made at milestones.
• Early death / suicide exclusion matters: If death occurs by suicide within specified period (often first 12 or 24 months), policy may not pay full sum assured, or may refund premium paid (minus expenses), depending on policy wording. Technically part of death claim but special rules.
• Unnatural / accidental death benefits: When extra cover exists (accidental death rider), may pay additional sum.
• Nominee disputes / legal heir claims: Where nominee is not clearly designated or there are legal disputes, claim process may involve proving legal entitlement.
• Claim under assignment: If policy has been assigned (say to a bank as collateral for loan), claims may need co-operation of assignee.

Regulatory / Procedural Rules in India

It is not enough to know claim types; knowing the rules that protect policyholders is equally essential.

6.1 IRDAI Regulations (Protection of Policyholders’ Interests Regulations, 2017)

• Death claims: Insurers must send request for all requirements within 15 days of receiving intimation.
• Then, once all documents are in order, settle or reject within 30 days.
• If additional investigations are needed, the insurer has up to 90 days from intimation, and then additional 30 days after investigation to settle if claim is valid.
• Maturity, survival, annuity claims: Insurer should initiate claim payment (advance intimation, send payment or cheque or electronic mode) by the due date.

6.2 Documents Commonly Required

Depending on type of claim, typical documents include:

• Original policy document / policy bond
• Claim form / death claim intimation form or survival claim form
• Death certificate (for death claims) – from municipal body or competent authority
• Medical records / cause of death, in cases of accidental/unusual deaths
• Proof of identity / address of claimant (nominee/beneficiary)
• KYC documents
• Bank account details / nomination proof
• For surrender or maturity – proof of premium payments, policy continuity

6.3 Timelines & Interest / Penalties

• If payment is delayed beyond required period owing to insurer, interest may be payable under certain IRDAI norms.
• If claim is repudiated, insurer must give written reasons.

Common Hurdles and How to Overcome Them

Even when everything seems in order, claim’s settlement may be delayed or denied. Here are common challenges:

Practical Examples

Example 1: Death Claim under a Term Policy

Mr. Ravi has a 20-year term insurance policy with LIC. After 8 years, he unfortunately passes away due to natural causes. The nominee (his spouse) intimates LIC with death certificate, the policy document, identity documents. Since death is after early exclusion period, claim is processed under death claim. Insurer requests all documents within 15 days of intimation, receives them, and settles the claim within next 30 days.

Example 2: Maturity Claim under an Endowment Plan

Ms. Kavita buys an endowment plan of 15 years. She pays premiums regularly. On completion of 15 years, being alive, she applies (or insurer initiates) for maturity claim. She submits policy bond, survival proof, identity documents, bank account details; insurer pays maturity amount (sum assured + bonuses) on or before due date.

Example 3: Critical Illness Rider Claim

Mr. Anil has a basic life policy with additional rider for critical illnesses. After 5 years, he is diagnosed with one of the illnesses listed in the rider (say cancer). He claims under the rider. He needs medical reports, diagnosis proof, policy documents and submits claim for the defined benefit under rider. This does not terminate the base policy (unless policy terms require). He continues policy; rider benefit is paid.

Ensuring Smooth Claim Settlement: Best Practices for Policyholders

To avoid delays and disputes, policyholders and nominees can follow these tips:

1. Understand all policy terms clearly: Know the death benefit, maturity sum, survival benefits, rider benefits, exclusions (suicide, waiting periods etc.).
2. Maintain policy documents safely: Original bond, premium receipts, copies of any declarations etc.
3. Update nomination and beneficiary info whenever there is life change (marriage, birth, divorce).
4. Pay premiums on time: Avoid lapse; use grace periods; revive if lapsed.
5. During claim, respond quickly: Submit all required documents at once; don’t wait for insurer to call repeatedly; maintain copies of everything submitted.
6. Keep medical history disclosures accurate: No hiding past illnesses or risk factors.
7. Follow up on claim status: Many insurers have online tracking; use these, and escalate to grievance redressal or Ombudsman if needed.

Why Knowing the Different Claim Types Matters

• For financial planning: You can choose a policy type with benefits that fit your needs (e.g. someone wanting survival benefits vs pure protection).
• For selecting riders or hybrids: Knowing what claims are possible (death, maturity, riders) helps choose add-ons wisely.
• For avoiding surprises at claim time: Unexpected clauses, exclusions, or delays can be distressing in grief; being prepared reduces friction.
• For evaluating insurer credibility: Claim settlement ratio, past inverted cases, responsiveness are good indicators.

Summary

Below is a concise summary of the major claim types in life insurance in India:

Regulatory Safeguards & Recent Changes

• IRDAI’s Protection of Policyholders’ Interests Regulations, 2017 ensures time limits, clarity, fairness in claim settlement.
• Many life insurers publish Claim Settlement Ratios (CSRs) to show how many claims they approve vs receive. Policyholders often consider this while choosing insurer.
• IRDAI has made it mandatory for life insurers to initiate payments (for maturity, survival or annuity) by electronic means or post-dated cheques so that claim amounts are available on time.

Conclusion

Claims are the moment of truth in life insurance. Types include death claims, maturity/survival claims (money-back, surrender, annuity), and riders. Each type has its trigger, conditions, documentation, regulatory timelines. For policyholders and nominees in India, understanding these types ensures you select the right policy, maintain documents and premiums properly, and expect your benefits without unnecessary delay or dispute.