INTRODUCTION
An Insurance Death Claim is a request for payment from an insurance company following the death of a policyholder. The claim is typically filled by the policy's beneficiary. Still, it can also be filled by a legal heir if there is no beneficiary or the beneficiary is unwilling to file the claim. To file an insurance death claim, the beneficiary will need to provide the insurance company with the policyholder’s name and date of death, its policy number, the beneficiary’s information like name and contact, and a copy of the death certificate of the policyholder. Following this, the insurance company investigates the claim to decide whether to approve or deny the claim. Not all kinds of deaths are allowed to be claimed under the Insurance Policy, accidental deaths and deaths due to Covid-19 viruses can be claimed. As per Section 39(11) of the Insurance Act, 1938 Provisions, where a policyholder dies after the maturity of the policy but the proceeds and benefits of his policy have not been made to him because of his death, in such a case, his nominee shall be entitled to the proceeds and benefits of his policy.
However, a Legal heir or a beneficiary is not always necessary to be arrayed as a complainant in an insurance death claim before the consumer forum because if there is a Nominee who is willing and able to claim the insurance proceeds. The Nominee is the person who is designated by the policyholder to receive the insurance proceeds in the event of the policyholder’s death. If the nominee is willing and able to claim the proceeds, then there is no need for the legal heirs to be made parties to the complaint.
CASE STUDY
Sulbha Prakash Motegaonkar & Ors. Vs Life Insurance Corporation of India
The case of Sulbha Prakash Motegaonkar & Ors. Vs Life Insurance Corporation of India is a landmark case in Indian Insurance Law. In this case, the Supreme Court of India held that it is not necessary for all the legal heirs of a deceased policyholder to be made parties to an insurance death claim before the consumer forum if the nominee is willing and able to claim insurance proceeds, or if all the legal heirs agree on who should receive the insurance proceeds.
In this case, a policyholder named his wife as the beneficiary of his life insurance policy, and he passed away. The insured was hiding a pre-existing medical problem; thus, the insurance company rejected the claim. The wife complained to the consumer forum, but the insurance company countered that the complaint should be made available to all of the policyholder's surviving legal heirs. The Consumer Forum has the authority to determine whether or not all of a policyholder's legal heirs must be included as parties to an insurance death claim. The Court also stated that if the nominee is willing and able to claim the insurance money, or if all the legal heirs agree on who should get the insurance proceeds, then it is not essential for all of the heirs to be declared parties to the claim.
The Court reasoned that the Consumer Protection Act of 1986 had the purpose of giving customers prompt and efficient remedies. The Court held that requiring all of a deceased policyholder's legal heirs to be parties to an insurance death claim would be against the Act's intent, particularly in situations where the nominee is willing and able to claim the proceeds or where all of the legal heirs concur on who should receive them.
In some cases, all the legal heirs may agree on who should receive the insurance, of all the legal heirs agree on who should receive insurance proceeds, then one or more of the legal heirs can file a complaint with the consumer forum on behalf of all the legal heirs. The other legal heirs do not need to be made parties to the complaint. One or more of the legal heirs have already received insurance benefits from the insurance firm. One or more legal heirs cannot register a complaint with the consumer forum against the insurance company if the insurance company has already paid them the insurance proceeds. The consumer forum is where the other legitimate heirs can complain if they haven't received the insurance proceeds.
CONCLUSION
It's not required for an insurance death claim to involve every one of a policyholder's legitimate heirs as a party before the consumer forum.
Whether or whether all legal heirs must be added as parties to the claim is at the discretion of the Consumer Forum. It is not required for all legal heirs to be included as parties to the claim if the nominee is ready and able to collect the insurance money, or if all heirs concur on who should get the proceeds.