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Insurance Documents & Claim Process

Note

Student Note: Questions on "Procedure for Claim Settlement" or "Importance of Proposal Form" are common in exams. Focus on the definitions and sequence of steps.

1. Key Insurance Documents

Insurance is a contract involving paperwork. Understanding these documents is vital.

A. Proposal Form

  • Definition: The application form filled by the insured to request insurance.
  • Importance: It is the basis of the contract. The doctrine of "Uberrimae Fidei" (Utmost Good Faith) applies here.
  • Contents: Personal details, Medical history, Occupation, Nominee details.
  • Warning: Misrepresentation (Lying) in this form is the #1 reason for claim rejection.

B. First Premium Receipt (FPR)

  • Definition: Proof that the contract has begun.
  • Significance: Risk cover usually starts from the date of the FPR.

C. Policy Bond (The Contract)

  • Definition: The detailed legal document containing all terms and conditions.
  • Components:
    1. Preamble: Introduction.
    2. Operative Clause: What is covered.
    3. Schedule: Specific details (Name, Sum Assured, Date).
    4. Exclusions: What is NOT covered (e.g., Suicide in 1st year).

D. Endorsement

  • Definition: A document recording changes made to the policy after issuance.
  • Examples: Change of Address, Change of Nominee, Correction in Name.

2. Notification of Claim

When the event (Death/Accident/Illness) occurs, the insurer must be notified immediately.

  • Life Insurance: Notify usually within 90 days of death (sooner is better).
  • Health/Motor: Notify within 24-48 hours.
  • Why? Delay raises suspicion of fraud.

3. The Claim Settlement Process (Step-by-Step)

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4. Required Documents for Claims

A. Death Claim (Life Insurance)

  1. Original Policy Bond.
  2. Death Certificate (Municipal Authority).
  3. Claim Forms (filled by Nominee).
  4. Medical Cause of Death Certificate (Doctor).
  5. FIR / Post Mortem Report (If accidental/unnatural death).
  6. Bank Passbook (Cancel Cheque for transfer).

B. Health Insurance Reimbursement

  1. Discharge Summary (Hospital).
  2. Final Hospital Bill (Original).
  3. Prescriptions & Lab Reports.
  4. Pharmacy Bills.

C. Motor Claim (Theft/Accident)

  1. Copy of Driving License & RC Book.
  2. FIR (Mandatory for Theft/Third Party injury).
  3. Garage Estimate (For repairs).

5. Common Reasons for Rejection

  • Non-Disclosure: Hiding pre-existing disease or smoking habit.
  • Lapse of Policy: Premium was not paid.
  • Exclusions: Claiming for Suicide (within 1 year) or Drunken Driving.
  • Fraud: Staging an accident or fake death.

Case Study: "Utmost Good Faith"

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Summary

  • Proposal Form: The most critical document. Fill it yourself, don't let the agent do it blindly.
  • Policy Bond: Keep it safe. It is needed for discharge.
  • Intimation: Speed matters. Inform insurer immediately.
  • Documents: Original bills/certificates are mandatory for verification.

Quiz Time! 🎯

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Next Unit: Retirement Planning! 👴

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