Insurers Have Rs 21,718 Crore Unclaimed Insurance Funds; Here What You Can Do To Claim Yours

Have you ever wondered what happens to insurance funds that go unclaimed by policyholders (or their nominees)? Data from the Insurance Regulatory and Development Authority of India (Irdai) reveals that insurance companies in India are currently sitting on a huge Rs 21,718 crore as unclaimed insurance funds.

In answer to Lok Sabha queries by Vijayakumar alias Vijay Vasanth and Manickam Tagore B, Finance Minister Nirmala Sitharaman revealed that the unclaimed funds with insurers have slightly declined from Rs 23,699 crore in 2023. However, it seems that a significant number of policyholders and their families are still unaware that they might be entitled to a share of this sum.

Let’s first understand why such funds remain unclaimed.

These funds get accumulated when policyholders or their nominees fail (or forget) to claim the benefits. This can be because of reasons like lack of awareness, miscommunication, lost documents, or the unfortunate passing of policyholder without them informing their families about the policy (or how they can claim the sum insured).

In her reply, FM Sitharaman quoted Irdai’s acknowledgement that the regulatory body does not maintain data on the number of unclaimed policies or the amounts claimed by the beneficiaries.

Is the government doing anything to address this issue?

Yes, the finance minister replies. As per the official release, to prevent any further accumulation of unclaimed funds and ensure the timely claim settlement, Irdai has introduced various measures. These include setting up;

1) Committees To Overlook Matter: A dedicated Policyholder Protection, Grievance Redressal, and Claims Monitoring Committee and a Board Level Committee at insurance companies have been mandated to review the settlement of unclaimed amounts on a quarterly basis. This includes reviewing the number and amounts of claims and the steps taken by the company to identify policyholders or beneficiaries.

2) Bima Bharosa: The insurance regulatory body’s Bima Bharosa portal provides access to website links of all insurers where details of unclaimed amounts held by them are displayed.

3) Pre-requisites: Other than the above two, Irdai has mandated that nominee details such as name, mobile no., email ID, and address are obtained at the time of policy issuance to ensure that accumulation of unclaimed funds with the insurers is reduced.

How To Check If You Have Unclaimed Insurance Funds?

If you think that you or a family member may have some unclaimed insurance money, this is what you can do;

1) Visit the insurer’s website. Most insurance companies have an ‘Unclaimed Amount’ option on their website, which you can access to get the information.

Informs Shilpa Arora, COO and co-founder of Insurance Samadhan, an insurance grievance redressal company, “The nominee can visit the insurer’s website and navigate to the "Unclaimed Amount" section, usually located at the bottom of the homepage. By entering essential details such as name and date of birth, they can check if there are any unclaimed amounts under their name.”

2) Use Bima Bharosa Portal: This portal provides an aggregated view of unclaimed funds across different insurers. “Individuals can also visit the Irdai’s Bima Bharosa portal, where this option is prominently available. After selecting the insurance company and entering the required details like name and date of birth, they can verify if any unclaimed amounts are due,” Arora states.

3) If both of the above don’t work, you can try contacting the insurer directly and ask them for help to clarify your entitlement.

How To Ensure Your Insurance Funds Don’t Go Unclaimed

Arora suggests some best practices that policyholders can do to ensure that their funds don’t go unclaimed;

- First, policyholders can digitise their policies and store them securely in a depository. This helps you with keeping a record that you (or your family member) can re-visit at the time of need.

- Second, policyholders must also assign a nominee to simplify tracking and claim processing.

- Third, sharing policy details with family members is crucial, as insurance is not an investment but a protection tool for the family's financial security.

What Happens If Your Claim Is Delayed?

Suppose you filed a claim on your unclaimed fund (whether as a policyholder or nominee) and it gets delayed. As per Irdai, insurers are supposed to settle claims within a specific timeline. In case of any delay, the insurer is required to pay an interest of bank rate +2% to the claimant.

The best approach for the claimant is to follow up persistently and, if needed, escalate the issue through the insurance ombudsman or consumer forums.