A large number of people are affected by natural calamities such as floods, storms, and earthquakes. In disasters like the 2014 floods in Jammu and Kashmir, 2016 cyclone in Chennai, or the Malaysian Airline Flight MH370 that went missing in 2014, a large number of people lost their loved ones.

When a loved one is found missing, it is a huge trauma. Although the loss is not compensable, a certain kind of financial compensation may be helpful. If the missing person is covered under a life insurance plan, the process to file a claim is not as complex as it may seem.

Here is how the claim settlement procedure of life insurance for a missing person works:

Presumption of death

In case of natural death, you need to submit a copy of the death certificate issued by the local authority to the insurer. However, providing a death certificate for a missing person is not possible. As per the Indian Evidence Act, you need to wait for at least seven years from the date of filing the missing complaint. At the end of this period, the presumption of death may be done through a court order.

Making the claim

After you receive the court order, you need to submit the same to the insurance company. The insurer will then process the life insurance claim of a missing person. However, you need to remember that the claim will be processed only if the beneficiaries or family members have continued paying the premium during the seven-year waiting period.

Exceptions of making a claim

The question is whether the insurer may process the life insurance claim before the seven-year period arises. Here are two situations when such an exception may be made: 

1. Where reasonable proof of loss is available

Proof of loss is an insurance-related term, which means a clear reason or circumstance that leads to the belief of the death of the missing person. If such a proof of loss is available, the insurer may process the claim before the seven-year waiting period. However, if the amount is high or the claim is filed during the first few years of purchasing the policy, the insurer does a detailed inquiry and a thorough discussion prior to sanctioning the claim. In most cases, getting claims cleared before seven years for people who go missing due to a natural calamity is very difficult primarily, as there is no circumstantial proof of loss.

If the claim is settled before seven years, you may need to sign an indemnity bond. This bond states that the claim money will be reimbursed if the missing person is found alive after the claim is settled.

1. In the case of natural disasters or terrorist acts

If the government releases a list of missing people presumed dead due to a natural calamity, terrorist act, or plane crash, the insurer may consider the same. In such cases, the seven years may be overridden.

Things to keep in mind

In most cases, you need to wait for seven years before the claim for a missing person is settled. Moreover, the premium must be paid during this period. If a claim is settled before seven years, you need to provide an indemnity bond.