Claiming Term Insurance for Missing Policyholders

In general, the process of claiming a term insurance policy is simple. In the event of the policyholder’s demise, you must submit a death certificate and other necessary forms to the insurance company. The insurer will first examine the claim, and if everything is in order, they will pay the sum assured to you.

But what would you do if you the term insurance policyholder is missing? Such a situation can be both traumatizing and financially taxing. Can you make a claim on a missing person’s term plan? And what is the process to initiate such a claim? We will answer all these questions in this article.

Is it Possible to Claim if the Policyholder is Missing?

Yes, it is possible to claim the term insurance payout or sum assured even if the policyholder is missing. But making a claim in this case is different and more complicated. Here's what you need to know:

Legal Presumption of Death:

A term insurance policyholder cannot be presumed dead as long as they are missing. As a general rule, a missing person can only be declared legally dead after a waiting period of up to seven years by law. This means that insurance benefits cannot be claimed during this time.

Court Proceedings:

Before filing an insurance claim, you will have to start a court proceeding to acquire a presumption of death certificate. This is a necessary legal document to settle an insurance claim in the case of a missing policyholder. The court system will require you to provide all the gathered evidence and testimonies of witnesses to prove that it was impossible to find the missing person.

Insurance Policy Terms:

Review the specific terms and conditions of the insurance policy. Some policies may have specific clauses related to missing persons and the claim process. It's important to understand these details to ensure that you meet all the requirements set by the insurer.

The Claim Process if the Policyholder is Missing

When a policyholder is missing, claiming the term insurance involves several critical steps:

File a Missing Person Report:

The first step is to file a missing person report with the local police. This report is essential as it officially documents the disappearance.

Obtain a Court Declaration:

In any event, if the policyholder continues to be missing for an unusually long amount of time, typically seven years, or a period as stated by Section 108 of the Indian Evidence Act, 1872, you can petition the court to declare the missing person as “presumably dead.” After such a petition, the court will issue a “presumption of death certificate,” if you have provided all the necessary documents and proof. Proof of a person’s disappearance include newspaper reports detailing the case and attempts to discover the location of the missing individual.

Submit Required Documents to the Insurance Company:

Once you have the presumption of death certificate, you need to submit it to the insurance company. You should also submit the missing person's report and other documents such as the original policy document and your ID proof.

Claim Verification:

The insurance company will verify your documents. They may conduct their own investigation to ensure there is no foul play involved. This step is crucial to prevent fraudulent claims.

Claim Disbursement:

After your claim has been successfully verified, the insurance company will pay out the policy’s sum assured to you.

Important Things to Know if the Policyholder is Missing

There are several crucial points to keep in mind when dealing with a missing policyholder situation:

Paying Insurance Premiums on Behalf of Missing Policyholder:

It is essential to continue paying the insurance premiums even if the policyholder is missing. This ensures that the policy remains active and the claim is not rejected due to non-payment of premiums.

Find and Keep Original Policy Documents Organized:

Keeping the original policy documents and related paperwork organized is crucial. These documents will be required when filing the claim and during legal proceedings.

Comply with the Proper Legal Procedures:

Compliance with legal procedures is key when it comes to claiming your life insurance policy. The insurer may reject your claim if they find any issues with your documentation. This is especially true in the case of a missing policyholder. So, be sure that your legal papers are in order before making an insurance claim.

You May Need Legal Help to File the Claim Properly:

Navigating the legal process can be complex and daunting. Seeking legal assistance can help you meet all the legal requirements, thereby increasing the chances of a successful claim.

Conclusion

Dealing with the disappearance of a loved one is challenging, and managing their term insurance claim adds to the complexity of the whole situation. However, by understanding the process and following the necessary legal steps, you can ensure that the policy benefits are accessible when needed. The core takeaway here is that term life insurance is crucial as it provides financial security to your family in times of uncertainty. Choosing a reliable term insurance policy can give you peace of mind, knowing that your loved ones will eventually be taken care of, even in unforeseen circumstances.

 

Aastha Mestry - Portfolio Manager 

An Author and a Full-Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest in traveling, Aastha also loves to blog in her free time.