All You Need to Know About Different Types of Term Insurance Claims
Updated On Oct 03, 2021
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A term insurance plan offers various types of benefits to its policyholders. However, all of these benefits serve different objectives, therefore, the claim for each of them is different. Generally, there are 3 kinds of claims that are common to all the term insurance plans available in the insurance industry. These claims are:
- Death Benefit Claim
- Maturity Benefit Claim
- Rider Benefit Claim
Let us talk about each of them in detail.
Death Benefit Claim
The main objective of purchasing a term insurance plan is to offer financial safety to your family members after your untimely demise during the plan tenure. Thus, a death benefit under a term insurance plan is the amount of sum assured that the family members of the life assured is entitled to receive after the demise of the policyholder before the maturity of the plan.
Generally, the death benefit involves sum assured on death under any term insurance plan. The family members are eligible to get the whole sum of death benefit after filing for the claim. They can opt to receive it in lump sum or in portions from time to time. This would depend on the reimbursement method that was selected by the policyholder at the time of purchasing the insurance plan.
Maturity Benefit Claim
Under a death benefit, the compensation is made to the loved ones of the life assured only in the event of death of the policyholder during the plan duration. However, what would happen in case the policyholder survives the plan tenure? In this scenario, the plan would reach its maturity date and the policyholder would not get any maturity benefit even upon making a claim. However, if the term insurance plan bought by the policyholder is ‘Term insurance with return of premium’ type then in this case the policyholder would get back the premium paid.
It should be noted that this benefit can be enjoyed by the policyholder only when they make an insurance claim. Moreover, to get the maturity benefit, it is significant to make payment for all the premiums on time in the past.
Rider Benefit Claim
Riders are the added benefits that can be bought along with your basic term insurance plan in order to extend the coverage offered under the policy. The added benefits can be availed by a policyholder by paying a little extra premium cost in addition to the premium paid towards the basic plan. Always remember that one must choose their insurance riders wisely as including too many of them can result in premium costs going up.
Riders are those extra benefits that can be used by the policyholder at the time when any of the situations mentioned in the policy document under the rider benefit arises in life. These can be claimed during the plan tenure or after the plan tenure. Moreover, rider benefits are completely different from maturity or death benefits. Therefore to acquire it, one needs to make a separate claim from maturity or death benefit. Some of the common term insurance riders are accidental death riders, critical illness riders, waiver of premium riders, etc.
Important Documents Required During Term Insurance Claim
Generally, these are the documents required in order to make any type of term insurance claim:
- Original Insurance Plan
- Death Certificate
- Medical History Copy
- Duly Filled Claim Forms
- Identity Proof (for individual who is filing for claim)
- Address Proof (for individual who is filing for claim)
- Cancelled Cheque
- Other Documents as asked by insurance provider
You may also like to read - Importance Of Critical Illness Rider With Term Insurance Policies
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.