Suspect a loved one had bought a policy? Search life insurers' websites

Unclaimed amounts with life insurers declined by Rs 1,018 crore but still stood at a staggering Rs 20,062 crore at the end of 2023–24, according to the Insurance Regulatory and Development Authority of India’s (Irdai) annual report. If a breadwinner passes away without informing their family about existing life insurance policies, it can have dire consequences, including loss of home if a mortgage remains unpaid. 

Why money remains unclaimed 

Unclaimed amounts often result from outdated customer details, making it difficult for insurers to trace policyholders or their nominees. “Many customers shift addresses, even move abroad, without updating their new address with the insurance company,” says Lalitha Bhatia, chief operating officer, Ageas Federal Life. Outdated phone numbers and email addresses add to the problem.

 

Sometimes, families of policyholders are in the dark. “Family members are unaware that a policy was purchased and hence are unable to make the claim,” says Amish Banker, chief operations officer, ICICI Prudential Life Insurance. 

People at times even forget about policies. “In many policies, premiums are payable for 10 years, with the policy maturing after another 10 years. People often forget about such policies once they stop paying the premium,” says Harsh Roongta, head, Fee Only Investment Advisors, a Securities and Exchange Board of India (Sebi)-registered investment advisor. He adds that lapsed policies with surrender or paid-up value also tend to be overlooked. 

How to prevent this? 

Update your bank account, address, email, and mobile number whenever they change. “If you close a salary account (shared with the insurer) on changing jobs, or move house, update the insurance company,” says Bhatia. 

Inform close family members and nominees about the policies you hold. If you buy a policy on another person’s life, the latter must be informed. Keep all policy documents at the same place where you keep share certificates, bank statements, and other financial documents. 

Opening an e-insurance account can help. “When the relatives or nominees open the CDSL or NSDL statements of their loved one, they will get information about the insurance policy,” says Bhatia. 

Currently, e-insurance is mandatory only for new policies. “It should also apply to existing policies,” says Roongta. 

If you suspect there’s a policy 

If you suspect a loved one bought a policy but lack the details, search online. “Every life insurer is mandated to disclose any unclaimed amount of Rs 1,000 and above on their website. A nominee or beneficiary can search for the policy by providing a few details, such as the policyholder’s date of birth, along with their Aadhaar number or registered mobile number,” says Banker.

Currently, nominees must search each insurer’s website. “The regulator should create a universal searchable database that will make searching easy,” says Roongta. Checking the policyholder’s bank account statements for premium payments can offer clues. 

Making the claim 

To claim a deceased relative’s policy that is found, nominees must submit a claim form, policy document, death certificate, and bank details. For accidental deaths, a police report may be required. For death due to illness, hospital records might be needed. Roongta says claimants must also prove their entitlement to the money. 

Open an e-insurance account

E-insurance, an electronic insurance account, is a digital repository that allows policyholders to store and manage all their insurance policies (life, health, motor, etc.) in a secure electronic format (akin to a demat account for securities) via a single account

  E-insurance account can be opened with one of the approved insurance repositories: NSDL, CDSL, Karvy, or CAMS

  All policies are stored in one place, making it easier for policyholders and their nominees to locate them

  Family members or nominees can access policy details through the e-insurance account in case of the policy­holder’s demise, provided they have the required credentials or identifiers