When students of insurance were asked todefine life insurance, many defined it as a contract of insurance assigning several legal connotations. But one of them defined it as a settlement of claim as and when it arises, either by way of maturity or death during the term of the policy. He further explained that if the claim is not settled, it defeats the very purpose of taking life insurance that provides succor to the family of the policyholder.
All insurers vie with each other for speedy settlement of claims, be it survival benefit, maturity or death, to ensure their brand image. In many countries, insurance rating agencies use claim settlement operations as a major yardstick for deciding whether a particular insurer is a good service provider or not.
However, despite their best efforts, insurers in India are not able to settle all the admissible death claims because there arise problems of rival claims. Ultimately, all the rival claims end up as civil disputes in a court of law. It causes bitterness both for the nominee under the policy as well as the legal heirs of the deceased policyholder. When a poor widow with young children realizes that she has to fight a prolonged legal battle to claim her husband's insurance money, her horror and sadness know no bounds. A majority of the outstanding death claims among all the insurers in India pertains to this category. |
