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How can one arrive at the claim amount on the LIC policy?

Subject to claim concessions, the net amount payable under a policy in settlement of its claim depends upon its status as on date of death.

In case of a reduced paid-up policy which has not been specifically enclosed for paid-up conversion, LIC will pay the claim for the full sum assured instead of the paid up value provided certain conditions are satisfied:

  • The life assured died within 6 months from the due date of the first unpaid premium.
  • Premiums under the policy have been paid for a minimum period of 3 full years.

    Claims concession is not available on certain policies during the deferment period in case of Children's Deferred Endowment Assurance, Temporary Assurance and Convertible Term Assurance. Extended claims concession is an extension of the regular claims concession. Here, the claim for the full sum assured is payable under a reduced paid-up policy provided two conditions that:

  • The life assured died within one year from the due date of the first unpaid premium five years after the deferred date in case of CDA policies.
  • Premiums under the policy have been paid for a minimum of 5 years. However the claims concession is subject to the deduction of:
  • The premium or premiums unpaid with interest thereon up to the date of death. Unpaid premiums falling due before the next anniversary of the policy (except in Fixed-Term (Marriage) Endowment and Educational Annuity plans).

  • Who should sign the Discharge Voucher of LIC under varying circumstances?

    This table shows who should sign the form of discharge in respect of a maturity claim under different circumstances:

    Circumstances Who should sign the Discharge Form
    Policy on own life which has not been assigned The life assured
    Joint Life policy which has not been assigned Both the lives assured
    Policy which has been conditionally assigned Both the assignor and the conditional assignee
    Policy which has been absolutely assigned The absolute assignee

    How can you stay protected with LIC policies if the key person important to your business dies?

    Every business organisation has a few key members who are vital towards its functioning and its success. Key people are not necessarily among the top management, which runs the company but even high-performing salesmen or production engineers or administrative heads.

    In case of the death of one of these individuals, the organisation will suffer a definitely monetary loss in terms of its financial performance as well its creditworthiness. The loss will take some time to recoup before others can be trained and inducted to take their place. Besides the time and money invested in the training can make it an unnecessarily expensive proposition.

    If the firm opts to take life insurance policies like the Keyman insurance policy on the lives of such individuals, it would definitely protect the firm from any loss of profits or earnings that would result from the death of any of its key employees. The chaos that might result subsequent to the death of the firm's key employees will also require the expert services and consultations with legal luminaries and experts before the situation can be rectified. Needless to say, lump sum payments for services rendered are not an attractive option considering the fact that a bulk of such payments would be classified as taxes for the receiving individual.

    It is advantageous for the firm to buy an Immediate Annuity policy or a Deferred Annuity policy that will provide payment through fixed timely amounts over a number of years. Thus the tax assessment for the outside expert will be charged over a longer period of time instead of the total amount in one and the same year.

    What procedure should one follow to obtain a duplicate copy if the original LIC policy is lost?

    In case, a policy document is irrecoverably lost, destroyed or damaged, you can obtain a simple copy of the policy by making the payment of Re.1/- only to LIC. Such a copy will serve the purpose of your obtaining details of the data pertaining to a lost policy, such as the sum assured, the insurance plan, date of maturity, etc. When the policy matures, the claim amount can be obtained on the basis of an indemnity bond. Similarly, you can also surrender a policy even if the original policy document has been lost.

    However, if you need a loan against your policy, then a proper duplicate policy is necessary against the one that has been lost.

    How should one notify LIC in the change in address?

    Whenever you shift from one place to another, make sure to notify the change in your address to the relevant office, branch office, which directs your policy so that all your premium notices, receipts, etc will be sent to your new address.

    On the other hand, transferring of policies creates a lot of confusion and dislocation within the insurer's offices. Your best bet is to let it remain at a branch office where your agent resides so that in case of any difficulty, his services can be utilised without having to bother yourself unnecessarily.

    How to maintain all the premium receipts of LIC?

    It is extremely important to safely retain all your premium receipts intact. You may be paying your premium on time but there are chances that the insuring companies' ledgers are not entered with your payment details. At times like this, the insuring company may write to the policyholder asking him to produce the premium receipts and vouch for the payments made. If the payments made are very old, then it may be difficult for the policyholder that is you to prove them without the premium receipts.

    Needless to say, it is extremely cumbersome to preserve all the premium receipts. So the next best alternative is to periodically get a certificate from your insuring company confirming that all your premium payments are up-to-date. It is easier for you to preserve such certificates instead of individual premium receipts. The certificate can be obtained from the relevant branch office of LIC that services your policy and accepts the payment of premiums.

    What are the requirements to settle the death claims of LIC policies?

    In event of the death of a policyholder, the claimant - the nominee, the assignee or the next of kin should immediately convey certain information to the insurance branch office where the policy is serviced.

  • A statement that the policyholder is dead.
  • The date of death
  • The cause of death
  • The place of death
  • The policy number (s)
  • The claimant's relationship with the deceased policyholder

    As soon as the insuring company receives these details, the concerned branch office sends the necessary claim forms for completion along with specific instructions regarding the procedure to be followed by the claimant. If you have an agent, he should easily be able to procure the needful for you.

  • When can a nomination be done?

    To begin with, 'nomination' is the process of identifying a person to receive the policy amount in the event of death of the policyholder. The nomination can be done at the start of the policy by providing details of the nominee in the proposal form. However, if the nomination is not given at the beginning, it can be done at a later date. This nomination has to be effected by giving notice in a prescribed form to LIC and getting it endorsed on the Policy Bond.

    The policyholder can change the nomination at any time during the term of the policy and for end number of times. For this, the policyholder has to give a notice in a prescribed form to LIC. Further, nomination can be removed any time by the policyholder without giving prior notice to the nominee.

    Under nomination, the nominee gets only the right to receive the policy amount in the event of the death of the policyholder; nomination does not pass on the property in the policy. If nominee dies when the policyholder is still surviving then the nomination would be ineffective. If nominee dies after the death of the policyholder but before receiving policy amount, then again the nomination becomes ineffective and only the legal heirs of the policyholder can claim money.

    How do I surrender my policy?

    If premiums are paid for at least three consecutive years, the Policy acquires a Surrender Value. The Policy, which has acquired a Surrender Value, can be surrendered for payment in cash. Once the Policy is surrendered the contract is terminated. In the case of ICICI Pru Single Premium Bond the policy can be surrendered after the first year.

    How do I revive my policy that has lapsed?

    If your policy has lapsed on account of non-payment of premium within the specified due date, you can re-apply to reinstate it, if:

    You apply within 5 years from the date of the first unpaid premium and before the maturity date

    You pay all the required premiums and interest

    You give us satisfactory evidence of health at your own expense The reinstatement will take effect only if we accept your application. We will notify our acceptance to you.

    What is nomination of the policy?

    Section 39 of the Indian Insurance Act 1938 provides for nomination of a person who would receive the benefits of the claim on the death of the life assured. Nomination establishes a clear title to the policy. This prevents dispute and also prevents delay in settlement of a death claim. In the case where nomination has not been given at the time of proposal, nomination can be made at any time during the term of the policy. Nomination can also be changed, at any time during the tenure of the policy, by intimating respective insurance company

    Can I change my nomination?

    Yes. You can change your nomination at any time till the maturity date. All you need to do is to inform us about the change through a specified form.

    How do I notify my change in address?

    You can call our customer service center or notify us through a letter about the change of address. We shall confirm the change to you.

    What if I forget to make payment?

    We offer you a grace period for non-payment on due date. This grace period is 30 days from the due date in case premium payments are made on quarterly, half-yearly or yearly basis. It is 15 days from the due date for monthly payments. During this period the policy remains in full force and no interest is charged. If you fail to pay a premium even during the grace period, your policy automatically:

    Lapses if there is no surrender value

    Converts to a paid up policy if there is enough surrender value

    What If I lose my policy?

    You can apply for a duplicate policy document. To get this document, you will have to send us a letter stating the circumstances under which the policy was lost.

    Can I assign a policy?

    The policy can be assigned. To assign the policy you have to notify us regarding the assignment.

    How do I make a maturity claim?

    You must send us the:

    • Completed claim form
    • Policy of Life assurance
    • Proof of age, if not submitted earlier

    To whom is my death claim amount paid ?

    The death claim is paid to:

    • The nominee, as declared by you in the proposal form
    • The legal heirs, in case you have not specified the nominee
    • The appointee named by you, in cases where the nominee is a minor at the time of claim

    How does the nominee/legal heir make a death claim ?

    The claimant (Nominee/Legal heirs) must send us:

    • An intimation of the death of the life assured
    • Death certificate
    • Completed claim forms and other forms as required by the company
    • Policy of Life assurance
    • Identification that the person is entitled to receive the payment

    What additional requirements are there for an accident claim?

    In addition to the requirements for a death claim, the claimant should submit all the reports (police, hospital etc) pertaining to the accident as required by the company.

    What additional requirements are there for a disability claim?

    You must send us within 6 months of the disability date

    Written notification of your disability arising out of the accident

    Proof of your disability

    You will have to undergo one or more medical examinations conducted by medical practitioner/s appointed by us, if required.

    What conditions apply to a policy loan?

    A loan is given only if you have an ICICI Pru Save'n'Protect policy.

    If your policy has a surrender value, you can apply for a policy loan upto 80% of the surrender value. This loan will carry an interest rate as decided by the company from time to time. The interest will be charged starting from the date of the loan. You can repay the interest and the loan at any time.

    If the total outstanding amount owed to us under your policy exceeds the surrender value, your policy terminate immediately. The outstanding loan and interest will be deducted from the claim amount at the time of settlement.

    How do I surrender my policy?

    If premiums are paid for at least three consecutive years, the Policy acquires a Surrender Value. The Policy, which has acquired a Surrender Value, can be surrendered for payment in cash. Once the Policy is surrendered the contract is terminated. In the case of ICICI Pru Single Premium Bond the policy can be surrendered after the first year.

    What is Nomination ?

    When you make a nomination within your life insurance policy, as the policyholder you still continue to be the owner. However after your death, the nominee who did not have any right under the policy while you were alive becomes the rightful recipient who will receive the policy monies. He or she may not be the rightful heir in which case the legal heir can implement his rights and claim the monies from the nominee.

    What is an Annuity?

    An Annuity is an investment you make, either in a single lump sum or through installments paid over a certain number of years, in return for which you receive a specific sum every year, or every month either for life or a fixed number of years. Upon the death of the annuitant, or at the expiry of the period fixed for annuity payments, the invested annuity fund is refunded usually along with a small bonus.

    Annuities differ from all other forms of life insurance in one fundamental way - They do not provide any insurance cover but offer a guaranteed income for a certain period or for life. Typically annuities are bought to generate income during one's retired life, which is why they are also called Pension Plans.

    Annuities are an investment that offers you an income that you cannot outlive and provides a solution to the biggest financial insecurity of old age that you will outlive your income.

    What is the Unit-Linked Insurance Plan (ULIP)?

    The Unit Trust of India (UTI) operates a Unit-Linked Insurance Plan (ULIP) in collaboration with LIC and the General Insurance Corporation (GIC) of India.

    ULIP is a contractual savings-cum-insurance plan that offers the following features:

    • High returns
    • Maturity bonus
    • Life insurance cover
    • Free accident cover
    • Safety of capital
    • Tax rebate

    It is open to any resident of India who is above 18 years of age. Individuals less than 55 years and 6 months of age can join the plan for 10 years and those less than 50 years and 6 months for 15 years contributing 1/10th and 1/15th of the target amount every year, respectively.

    Is there any other benefit of buying insurance other than the risk cover?

    There are several benefits of buying insurance. Other than the risk cover the most important you receive Income Tax Relief under Section 88 of the Income Tax Act, which means premiums paid by you, reduces your tax liability. Such exemptions are also available for premiums paid on health covers.

    Besides it helps you build up compulsory savings.

    Also through a valid assignment the beneficiaries of the policy are protected from claims of creditors. Life insurance policies can also be a great source of help as a security while availing of loans. One could also surrender his policy in case of emergencies.

    For a policy taken under the MWP Act 1874, (Married Women's Property Act), a trust is created for wife and children as beneficiaries.

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