Claims and Policy Servicing
What this domain tests
Claims and servicing questions cover what is payable, when, and on what proof - death claims, maturity and survival benefits, plus alterations such as loan, surrender, revival, nomination and assignment.
Core rules
- Death claim documents - claim form, original policy, death certificate, nominee's KYC and bank details; for accidental death, the police report and post-mortem report. Early claims (within three years of commencement or revival) attract routine investigation; claims after three years are protected by Section 45 unless fraud is proved.
- Payment timelines - a claim needing no investigation should be settled within 15 days of the last required document, and within 45 days where investigation is needed; delay beyond this attracts interest.
- Revival - a lapsed policy can be revived within five years of the first unpaid premium on payment of arrears with interest and a declaration of health; later revival is not normally allowed.
- Policy loan - available once the policy acquires surrender value, generally up to 90% of that value, with interest payable half-yearly and unpaid interest capitalised.
- Paid-up and surrender - a regular-premium policy with at least two years' premiums becomes a proportionate paid-up sum assured on lapse and can be surrendered for a guaranteed surrender value that excludes the first year's premium.
- Nomination (Section 39) and assignment (Section 38) - the nominee receives the money as a trustee for the legal heirs; assignment transfers rights.
Worked example
Sum assured ₹5,00,000, term 20 years, eight years of premiums paid, then lapse. Paid-up sum assured = 5,00,000 × 8/20 = ₹2,00,000, plus vested bonuses, payable on death or at maturity. No further premiums are due.
Traps
Calling the nominee the owner of the policy; forgetting that a surrendered policy pays no bonus; treating a lapsed policy as revived without interest; missing that early-claim investigation applies from revival date, not only commencement.