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All You Need to Know About Types of Term Insurance Claims

Updated On Nov 04, 2021

A policyholder purchases a term cover for a specific time period and makes premium payment for that so that the plan benefits can be used by their loved ones after their demise during the policy tenure. However, the question arises, how would one receive these benefits? These benefits can be acquired via different kinds of term insurance claims.

Different Kinds of Term Insurance Claims

A term insurance cover provides several types of benefits to a policyholder. However, these benefits serve distinct purposes, thus, the claim towards each of these benefits is different. Generally, there are 3 kinds of term claims that are commonly available under the term plans:

  • Death Benefit
  • Rider Benefit Claim
  • Maturity Benefit Claim (available only in case of term cover with TROP)

Let us study about each of these claims in detail:

Must Read: Common Term Insurance Terminologies Explained

  • Death Benefit Claim

The main purpose of a term insurance plan is to offer security financially to the family members of the policyholder after his/her demise during the plan duration. Thus, a death benefit in a term plan is the sum assured amount that the family members or nominee assigned by the policyholder is entitled to receive after the demise of the policyholder before the plan duration gets completed.
A dependent can receive the death benefit either in lump sum after filing for the death claim or in fragments from time to time. This would be based on the method of reimbursement opted by the policyholder at the time of purchasing the plan.

  • Rider Benefit Claim

Riders are the added benefits that can be bought alongside the basic insurance plan. These are the significant benefits that have their focus on specific areas. There are several types of insurance riders offered by an insurance provider, however, including as many can result in a sharp increase in the amount of payable premium. Therefore, although they are beneficial yet they must be opted wisely depending on your requirements.

As rider benefits focus on specific areas in life,these can be claimed only when such situations arise. These can be claimed during the plan term or after the plan term. One must make a note that these riders are entirely different from maturity or death benefits. Hence, in order to acquire it, one needs to separately make a claim from maturity or death benefit.

  • Maturity Benefit Claim

Under a term insurance plan, the death benefit is paid only after the policyholder’s demise during the plan duration. However, what in case the policyholder outlives the plan duration? In such a case, the plan reaches maturity and the policyholder would not get any kind of maturity benefit upon claiming the insurance plan.

But, if the policyholder has opted for a term insurance cover with TROP( Term Plan with Return of Premium) feature, then they are entitled to claim the paid premiums in the form of maturity benefits in case they live through the plan duration.

It must be noted that, the benefit under this claim can be acquired only if they make a claim. Also, it is mandatory for the policyholder to have paid all the premiums on time in the past to stand eligible for the claim.

Documents for Making Term Insurance Claim

You need the following type of documents for making the term insurance claim:

  • Original insurance policy
  • Medical history copy
  • Identity Proof of Individual making claim
  • Address Proof of Nominee
  • Duly filled claim forms
  • Cancelled Cheque
  • Death certificate of policyholder

Also Read: Term Insurance: Exploring the Features

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.

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