Too often, people are unaware of insurance covers held by their parents, loved ones and therefore fail to claim them after the policyholder passes away. Since no claim is made on the death of the policyholder, the funds remain with the insurance company.
Unclaimed amount includes any amount payable to policy holder such as death claim, maturity claim, survival benefit, premium due for refund and so on. It is essentially the amount that has remained unclaimed beyond six months from the due date for settlement of the claim amount.
As per the latest data by the Lok Sabha, the approximate unclaimed amount with life insurers was Rs.10,527 crore as on March 31, 2016. In case of non-life insurance, the unclaimed amount stood at Rs. 1,198 crore in March 2016.
Currently, insurance companies display unclaimed amounts of over Rs.1,000 on their respective websites.
Experts believe advisors and agents can use this opportunity to grow their business. Nirmal Rewaria, Co-founder & CEO, FinPeace Technologies, a firm that helps people claim unclaimed amount lying with various financial institution told Cafemutual that close to Rs. 64,000 crore of unclaimed money is lying in suspense accounts with various financial institutions in India.
Sharing how his company helps people, Rewaria said, “All that the clients have to do is download the FinPeace mobile app and upload investment documents. In case of an unfortunate event, dependents will have to call us. We will help them with the procedure and documentation required to claim the coverage amount,” he added.
His company also works with IFAs to help their clients claim unclaimed amount.
However, he advised IFAs to encourage their clients to keep policy documents safely and accessible for family members. He also recommended them to encourage their clients to have financial conversations with their family members once they buy insurance policies.