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Term Life insurance provides coverage for a fixed period of time at a fixed premium rate.
The beneficiary of the policy files a term insurance claim to the insurance company to receive the death benefits in case of the policyholder's unfortunate demise.
Most insurance companies offer a hassle-free claim settlement process so that the beneficiary can avail of the benefits seamlessly.
Maturity Claim: Under this type of claim, the money is payable at the time of maturity of the policy. In this, a specific amount is paid to the policyholder if they survive the policy term. You can receive a maturity benefit only if you pay all your premiums on time. To avail of the benefit, you must file a complete discharge form.The discharge is not liable for any taxes under the Income Tax Act, 1961.
Death Benefit: In this claim, the nominee of the policy raises a request to receive the benefits of the policy in case of the unfortunate death of the policyholder. The sum assured is paid to the nominee/beneficiary of the policy upon the policyholder's death. To receive the benefits without any hassles, the insurer must be informed about the policyholder's death and other information like the policy number, death date, policy tenure, etc. The death benefits are tax-free under Section 10 (10D) of the Income Tax Act, 1961.
Rider Claim: Term insurance riders are the added benefits that the policyholder purchases when buying the policy to increase the scope of coverage. The common term insurance riders include Waiver of Premium rider, Critical illness rider, etc. In case of an emergency, the policyholder can raise a claim for any of the riders, and the insurance company will provide the benefits stated under the rider. The claim settlement ratio is defined as the number of claims settled by the insurance company against the number of claims filed in a financial year. Simply put, it is the number of claims paid against the number of claims made in a financial year. For example, if a company has a CSR of 92%, it has settled 92 claims for every 100 claims made. CSR is also one of the aspects that you need to research before you buy a policy. The CSR does not stay constant and varies every year.