How do I read my life insurance policy document — sum assured, nominee and riders?

Find four things first: the benefits and the events on which they are paid, the nominee recorded on the policy, the riders attached, and the key dates — commencement of risk, maturity and any revival. A life policy has to state each of these. The dates matter beyond the payout: the three years in which an insurer can question a life policy run from the latest of the date of issue, the start of risk, any revival or a rider's date.

A life policy document is mostly a list of promises and the conditions attached to them. It does not reimburse a cost; it pays the amounts it promises when a stated event happens. Reading it well is about finding the events, the people and the dates. Sum insured vs sum assured explains why that difference matters.

What the policy must tell you

IRDAI lists the matters a life insurance policy must clearly state. The ones to find first are these:^[1]

• Benefits: the benefits payable, the contingencies on which they are payable, and the other terms of the contract^[1]
• Nominee: the name, age and relationship of each nominee, and the guardian's name where a nominee is a minor^[1]
• Riders: the details of every rider attached, and the contingencies excluded for both the main policy and the riders^[1]
• Dates: the date of commencement of risk, the maturity date and any dates on which survival benefits are payable^[1]
• Revival: the revival schemes for a lapsed policy and what you must submit to revive it^[1]
• Claims: the list of documents a claimant must submit^[1]

Sum assured and benefits

IRDAI's product regulations define the sum assured on death as an absolute amount of benefit guaranteed to become payable on the death of the life assured, under the policy's terms. Find the benefits clause and read the event exactly: a rider for accidental death, for instance, depends on that rider's own definition of an accidental death, which is why accidental death benefit disputes turn on wording. Maturity, survival and annuity payments are due on their due date, and a surrender request must be paid within 7 days of receipt.^{[2, 3]}

The nominee, and what can change it

The nominee is the person you name to receive the money if you die. A life insurer cannot accept a proposal without a nomination, and you can name or change a nominee at any time before the policy matures. A change or cancellation binds the insurer only once it has written notice; until then it is protected if it pays, in good faith, the nominee on its records.^{[4, 5]}

The insurer must acknowledge a registered nomination or change in writing, and a nomination recorded in the schedule, or in an endorsement accepting a change, counts as that acknowledgement. If you have assigned the policy — to a lender, say — the assignment affects the nomination; nominee, appointee and assignee explains each role.^{[5, 4]}

Why the dates matter

Under Section 45 of the Insurance Act, a life policy cannot be called in question on any ground once three years have passed. The three years run from the latest of the date of issue, the date risk commenced, the date of revival or the date of a rider. So a revival, or a rider added later, starts the three years again.^[5]

Within those three years, an insurer that questions the policy must tell you, or your nominee, in writing the grounds and the material it relied on. Separately, the insurer may call for proof of age at any time if it is entitled to, and adjusting the policy's terms on later proof of a wrongly stated age does not count as calling the policy in question. Proposal forms and material facts explains what can be questioned.^[5]

If the policy is new, also note the free-look period: a life policy with a term of a year or more has 30 days from receipt of the policy document in which, if you have made no claim, you can return it, stating your reasons — see the free-look period. And keep the policy where your nominee can find it.^[4]

ClaimAssure is an independent private platform. It is not an insurer, IRDAI, Bima Bharosa or the Insurance Ombudsman, it never files anything on your behalf, and it cannot promise any outcome. What it does is read your documents and show you what they say.

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