Unclaimed insurance money is the amount due to the policyholders or beneficiaries but has not been claimed for more than 6 months after the settlement date. The claim amount can be in the form of death claim, maturity claim, and premium refunds (including accrued interest).
According to the Insurance Regulatory and Development Authority (IRDAI) data, as much as Rs 15,167 Crores, which is policyholder’s money, is lying unclaimed with 23 life insurers.
Out of the total unclaimed amounts as on March 31st 2018, Life Insurance Corporation (LIC) is sitting on Rs 10,509 Crores, while the 22 private sector insurers account for the remaining Rs 4,657.45 Crores.
Among private insurers, ICICI Prudential Life Insurance has Rs 807.4 Crores of unclaimed amounts of policyholders, followed by Reliance Nippon Life Insurance at Rs 696.12 Crores, SBI Life Insurance Co at Rs 678.59 Crores and HDFC Standard Life Insurance Co at Rs 659.3 Crores.
The unclaimed insurance money of policyholders has been increasing. In the year 2012-13, the unclaimed amount for the entire industry was Rs 4,865.81 Crores. There has been a 25% increase year-on-year over the past five years.
See Also: How To Complain Against Your Insurer?
The IRDAI has asked insurers to take proper steps to identify the policyholders or beneficiaries and disburse the claims.
All the life insurers have been asked by IRDAI to provide a search facility on their websites to permit policyholders or dependents to identify, if there are any unclaimed amounts due to them, lying with these insurers.
There will be a separate window on the website of the insurer to find out unclaimed amounts. Policyholders or dependents should enter details such as policy number, the name of the policyholder, PAN of the policyholder, date of birth or Aadhaar number of the policyholder, to find the unclaimed amounts. The information pertaining to unclaimed amounts on websites of insurers should be updated on a half-yearly basis.
The main reason why most of the amounts go unclaimed is because nominees are not aware of the policy availed by the policyholder. In some cases, nominees won't be having policy documents to make a claim. To avoid such situations, it is advisable to let nominees know about the insurance policy availed and also where the policy documents are stored.
If the claim amount is paid via cheque, the change in the address of the policyholder or claimants may lead to delays in the process. To avoid this headache, you should update the address in the insurer's records.
Misplacement of the cheque can lead to a delay in receiving the claim. Now many insurers settle claims through electronic transfer of funds. So, it is advisable for all the policyholders to opt for electronic transfer of funds. For the policies issued after 2014, insurers insist on electronic transfer of funds.