I Found Two Old Life Insurance Policies. How Can We Collect?

When Shailaja’s aged father passed away, she and her husband decided to sell the old family home. Her mother had died several years earlier. While sorting through some personal papers, they found an old life insurance policy held by Shailaja’s deceased mother, which had never been claimed. Would it be possible for them to collect now? Sometimes ‘Unclaimed Policies’ policies hurt us a lot because it shows our carelessness.

According to a news report published in 2018, more than Rs 15,000 crores of policy holders’ money was lying unclaimed with 23 insurance companies in India. In this current climate of economic distress and job-market uncertainty, an unexpected windfall could be a life-saver for many.

What Are ‘Unclaimed Policies’?

These are amounts to be paid to the policy-holder or named beneficiaries as a death claim, maturity claim, survivor benefit, refund due of premium, or similar amount that has not been claimed beyond six months of the date designated for settlement.

In July 2017, the IRDAI mandated that all insurers holding unclaimed amounts for more than ten years must transfer them to the Senior Citizens’ Welfare Fund by 2018. It has also advised insurers to display information about unclaimed amounts larger than Rs 1000 on their websites once in six months.

Though it may seem like a contradiction in terms, many people fail to make a claim after the demise of a loved one. There are several reasons for this.

Why are Life Insurance ‘Unclaimed Policies’?

In many cases, grown-up children who are married and living independently are unaware of their parent’s insurance policies. They would fail to make a claim, and the funds would remain with the insurance company.

Alternatively, the insurance company may not be aware of the policy holder’s demise because it’s only when a claim is made that the insurer can know that the conditions for a payout are met.

Even if the policy-holder stops paying premiums, the company doesn’t automatically assume that they are dead.

The company may not have the right address of the policy-holder if they have moved house and not updated their mailing address with the insurance company.

In rare cases, the insurance company may not locate the beneficiaries if their current address, PAN, or Aadhar details have not been updated on the policy.

Beneficiaries may be unable to locate the insurance company if it has been bought over, acquired, or merged with another company and changed the original name.

If the payout was made by cheque, the policy-holder or beneficiaries might have misplaced/lost the cheque, becoming time-barred. That is why it’s important to enroll for payment through electronic transfer of funds.

Unclaimed amounts are not just maturity sums. They could include surrender values of foreclosed policies if the original policy-holder realized at some point that they could not pay a premium for the full term. Payments may also have been held up due to litigation.

How To Collect

• Check websites of major insurance companies where a search facility is provided
• Key in certain basic details of policyholder such as name, date of birth, PAN number
• If you find a match, the policy number and details will be displayed
• You will have to submit bank account details of the insured or proposer along with relevant documents
• This may be easier because, as a nominee/legal heir, your details would already be available on the policy
• Beneficiary has to provide proof of bank account
• The amount will be transferred via NEFT, RTGS, or IMPS to the beneficiary’s bank account

Conclusion

Look, it is important for you to claim and avail the benefits of missed insurance, but there is a saying that ‘sleeping person always loses’ and not to claim on time has emerged as a big problem for you. If the facts are to be believed, there are many such families who are facing the punishment for the mistake of not being able to claim in time. Life insurance policy, pay on the demise of the insured person and if you will not claim, then the insurance company will pay you.