OBJECTIVES

At the end of this lesson,the student should have understood

.The procedures follwed for settlement of claims under line insurence policies

.Therationa;e behind such procedures

.The risks and necessary safeguards to be aplied while settling claims

INTRODUCTION

1 A claim is the demand that the insurer shouldredeem the promise made in the contract i.e. settle the claim,after satisfying himself that all the condition and requirement for settlement of claim have been complied with. Inparticular he should check

. Whether insured event has taken place.

. What are the obligations assumed under the contract, which arerequired to be performed. These may be payment of bonus,payment of sum assured in instalments, waiver of future premiums,etc.

. Whether the policyholder has perfomed his part. The policystatus with regard to premium position, age admission, outstanding loan & interest, survival benefits if any, legal requirement such as under MWP Act, Foregn Exchange Regulations, report of investigation,police reports,etc.

. Who are the persons entitled to demand performence. Nomination,assignment,income tax prohibitory orders,official assignee"s notice - are all relevant.

MATURITY CLAIMS

2 Under Endowment type of policies,the SA is to be paid when the term of the policy is over. The date on which the term is complete,is the date os maturity and the settlement of the SA on that date is the maturity claim. The amount payable on maturity is the SA, less any debts, if any, would be added, if it if a with-profit policy.

3 Action on maturity claims is normally,initiated, based the records showing the policies tht will mature every month. The insurer normally sends advance intimations to the insured. Before making the payment, the insuer has to satisfy thet

.there are no assignments

.the age stands admitted.

.the premiums ate all paid (this is not required for a paid-up policy)

.the original policy is handed in

.the discharge voucher is duly completed

4 the insurer is expected to make payment on the maturity date. Postdated cheques ate normally sent a few days in advance of the maturity date, provided the discharge form is received duly signed. Ifthre policyholder dies before the date of maturity,the post dated maturity claim cheque will be cancelled and a claim by death will be processed.