Term policy or term insurance plans form an integral part of a working-class Indian’s financial portfolio. Contrary to popular beliefs, a term plan isn’t just a simple one-layered policy. There are different types of term policies available in the market today. So, it’s better to have solid knowledge before you think about opting for one.
But first, let’s delve deep into what exactly a term plan is all about.
What is a Term Insurance Policy?
If you are the sole breadwinner of your family, you are always worried about what will happen to your family in your absence. And a term plan can help you keep all your financial worries at bay! How? Well, with a term policy, you can keep paying premiums every month of a fixed amount and be assured that your beneficiaries will be able to avail the benefits of the sum assured in case of your accidental demise before the end of the policy tenure.
Every term plan comes with certain benefits. In India, you will find several reputed insurers offering term insurances like the Tata AIA term insurance. Hence, it’s better to do your due diligence before opting for one.
What Are the Different Types of Term Policy Claims?
Term plans can offer the policyholders and their beneficiaries several benefits. However, each one of them serves different purposes. Typically, there are three types of term policy claims available in India –
- Death Benefit Claim
The death benefit claim is crucial for the beneficiaries or family members of the policyholder in case of their death during the tenure of the term plan. This benefit is the amount of the sum assured by an insurer that the beneficiaries are entitled to receive if/when the policyholder passes away before the end of the term plan.
The family of the deceased policyholder can claim for the entire amount of the death benefit as a lump sum amount or in equal parts from time to time.
- Term Insurance with Return of Premium (TROP)/Maturity Benefit Claim
This is the maturity benefit claim which means, the policyholder’s beneficiaries can claim the sum assured only if the policyholder dies before the end of the tenure. However, if the policyholder survives through the policy tenure, the plan would be treated as a matured one, and hence, the policyholder will not receive any benefit upon claiming the term insurance.
This one’s also termed Term Insurance with Return of Premium (TROP), which means that the policyholder is entitled to claim their premiums as maturity benefits if they survive the term policy tenure.
- Rider Benefit Claim
The policyholder can avail rider benefits in addition to the term insurance plan. These benefits are focused on particular areas. Hence, if you opt for a rider benefit, your premium cost will go up. The insurance companies in India offer several rider benefits like accidental death claims, premium waiver claims, critical ailment claims, etc. And hence, if you can choose them well, they can prove beneficial in times of need.
As mentioned above, as rider benefits are additional benefits related to specific situations, you can only claim these when such situations will arise. You can claim your rider benefits during the term policy tenure or after that. However, the rider benefits are different from the maturity and death benefits and should be claimed separately.
Term Insurance Claim Rejection Reasons
Here are some of the common reasons for your term plan claim getting rejected by the insurer:
- If the policyholder fails to submit all the necessary documents.
- If the person putting the claim produces all wrong information in the claim form intentionally or unintentionally.
- The beneficiary isn’t aware of the terms & conditions and claims assured if the death happens after completing the policy tenure.
- Lack of transparency between the policyholder/beneficiaries and the insurer.
- If the claim is made fraudulently just to receive the claim amount.
If you are now well aware of the types of term insurance plans available, you can opt for one according to your requirements. First, however, consider the reasons for your term insurance claim ratio rejection before applying for one. It will help you from any further surprises if your claim gets rejected in the future.