One of the most frequently asked questions by insurance clients is when they should claim on their endowments policies. Often, this question is asked with hopes of getting reassurance from insurers that they will indeed get their benefits once their policies reach maturity or, in case of death, their benefits will go to their rightful beneficiaries. Endowment policies are essentially life policy contracts designed to pay out a lump sum either on death or on maturity at the end of the policy term. A good example of these are child education policies and other similar savings related policies.
Ever wondered what really happens when your life insurance policy matures? We dive into the details of what a life insurance policy is, what you need to know when your policy matures, and how to make death and maturity claims.
A life insurance policy is designed to protect the insured person and his/her beneficiaries financially during unforeseen circumstances such as death of the insured policyholder. A life insurance policy responds on maturity when the specified amount of time agreed upon in the policy expires typically 5, 10, 15 and 20 years after the policy was purchased and the sum assured is paid to you. In addition to this, when the policyholder dies, usually an already declared beneficiary receives a death benefit.
Filing a maturity claim is rather simple since you are filing the claim on your policy. Usually, your insurer will inform you that your policy is due for maturity before the actual maturity date and they will go ahead to ask for the necessary documents which may include your; National identity card, a policy discharge form, original policy document and your bank details. It is important to note that at the time of maturity, you should not have any outstanding premiums. The insurance company will only pay you if your premiums were fully settled.
Fortunately, the odds of the insured surviving until their policy maturity are increasing and clients are getting to see their benefits reach maturity. If the insured person lives up to the maturity date, the lump-sum amount is paid to him/her or this can be paid inform of annuity if this is what was agreed earlier with the insurer. This amount includes the agreed sum assured and, in some cases, bonuses are included. This payment is known as the maturity value which is guaranteed in the event of a without profit endowment or a combination of the sum assured and bonuses if it is a with profit endowment.
With a death claim, the nominee or claimant should inform the insurance company about the occurrence. The insurer will request you to provide documents such as; a death claim form, death certificate issued by NIRA, the original policy document, the nominee ‘s bank account details, and the national identity card of the nominee. Your insurer may ask you to provide additional documents depending on actual cause of death. for example, in the event of an accident, you may provide a police report or post-mortem report and in the case of death due to health-related conditions, you may be required to provide a physician ‘s statement.
As a policy holder, it is important to inform your declared next of kin about your policy such that in the event of sudden death, your beneficiaries have a starting point. Similarly, you need to keep track of the status of your policy and also ensure that your premiums are paid on time. Always update your insurer about any changes that need to be made to your existing policy like change of physical address, marital status, additional family members among others.
In conclusion, the settlement of a maturity claim is a simple process provided you have all documents in place.
By Sheeba Ddungu
Market Development Officer
Insurance Regulatory Authority of Uganda