Thanks to the woman who narrated her story to me recently.
She lost her husband about three years ago and, unknown to her, the good man had bought a life insurance policy and made her the sole beneficiary. Curiously, he did not disclose this information to his wife prior his death.
Late last year, the woman needed to obtain a certain government permit and was asked to produce some documents about her late husband. In the course of ransacking his Library, she stumbled on the man’s life insurance policy certificate.
She just glanced through and dumped the document back in the folder as she couldn’t understand its importance.
As she watched the debate over the recent Dana Air crash on TV and heard people talk about insurance compensation, her mind went back to what she had seen in her husband’s Library.
She dashed into the room, picked up the document again, read it carefully, and discovered that her loving husband had actually left a fortune for her.
Though she didn’t know what to do with the document and how she would claim the insurance benefit, she was smart enough to trace the insurance company’s address and spoke to them about her husband’s policy.
She was paid.
Well, she didn’t disclose the amount to me but I could smell some millions on her.
In concluding our discussion, the woman stated that, “I think you insurance people need to let the world know more about your services, processes, and procedure. Only God knows how many widows like me are out there sitting on gold in their houses without knowing it.”
She’s right. A great number of people don’t know what to do when it comes to filing life insurance claims.
Lesson number one from this woman’s story has to do with the policyholder/life assured himself – the breadwinner. When you purchase a life insurance policy, you need to let the beneficiary know about it; most especially if she’s is your wife.
Of what use is a life insurance policy to which the beneficiary doesn’t have access or know anything about?
It’s like those days when our papas and mamas would buy shares and keep the certificates in their cupboards; only for us to discover after their death that the companies had closed down, or the certificates had become ordinary tissue paper.
If you belong to the class of people who hold the belief that the named beneficiary may send you to early grave because of your life insurance money, I encourage you to read Life Dialogue to soothe your nerves.
OK. Let’s assume that the policyholder (life assured) has done the right thing. He has educated the beneficiary on the insurance policy, and also disclosed the location of the policy certificate (or actually handed it over).
What, then, should happen in the event of his death? How will the beneficiary file her claim? How does she get paid?
Contrary to what many people think, making a claim under a life insurance policy is very simple. If you follow the simple process required by the insurance company, it would only take a few days for you to get paid. Serious!
I can assure you that claim settlement is one of the key services rendered by life insurance offices and they have an obligation to pay promptly.
The first step is to inform the insurance company of the policyholder’s demise. This can be done through the insurance agent that sold the policy or you can contact the insurance company directly as a claimant.
The agent can actually make the claim process simpler as he would be able to supply you with the claims form, guide you on how to fill it, and explain the supporting documents you need to provide.
Assuming there is no intermediary (agent) on the policy, you can phone, email, or visit the insurance company yourself.
Let’s take a quick look at the three steps involved:
1. Formal Notification
While you could submit a written notification of death of the policyholder (life assured), the insurance company would still ask you to complete a standard “Death Notification Form.”
This form is used to obtain necessary information such as details of the policy, name of the life assured, date of death, cause of death, place of death, name of beneficiary/claimant etc.
It also includes questions about how the claimant/beneficiary would want to be paid (e.g. bank account details).
Death Notification Form is made available online by many insurance companies so you can easily download it for completion.
Having duly completed the Notification Form, you need to submit some simple documents in support of your claim.
These will include the original policy document issued to the policyholder, death certificate, medical certificate of cause of death, and police report (if death was as a result of accident).
Ordinarily, these are the few documents needed to process the claim but circumstances may warrant that an insurance company demands for more if there are some dark clouds on the nature of death, or if the amount involved is huge. This, sadly, is where trouble usually starts with some claimants. But there shouldn’t be any hiccup if the claim is genuine.
With steps 1 and 2 duly fulfilled, the next thing is for the insurance company to pay promptly.
It’s as simple as ABC.
Most insurance regulations all over the world stipulate the period within which insurance companies must settle claims and, of course, many of them settle earlier than the stipulated period to enhance their corporate image.
As far as Nigeria is concerned, section 70 of the Insurance Act 2003 states that claims must be settled “not later than 90 days after the issuance of discharge voucher.”
When it comes to the death of an employee who has a Retirement Savings Account in accordance with the Pension Reform Act 2004, the required standard is even higher. The National Insurance Commission (NAICOM) and National Pension Commission (PenCom) have jointly issued guidelines which state, among others, that:
“Claims must be settled by the insurer within seven (7) working days of receipt of complete documentation and acceptance of liability.”
Does every insurance company in Nigeria comply?
I should think so.