"Claims Management in Life Insurance is a complex exercise". Explain how does life insurance claim in nature differ from general insurance claim. Sudhakar purchased a Unit Linked Insurance Policy from XYZ Company limited

Claims procedure in respect of a life insurance policy A life insurance policy shall state the primary documents which are normally required to be submitted by a claimant in support of a claim. A life insurance company, upon receiving a claim, shall process the claim without delay. Any queries or requirement of additional documents, to the extent possible, shall be raised all at once and not in a piece-meal manner i.e. within a period of 15 days of the receipt of the claim. A claim under a life policy shall be paid or be disputed giving all the relevant reasons, within 30 days from the date of receipt of all relevant papers and clarifications required. However, where the circumstances of a claim warrant an investigation in the opinion of the insurance company, it shall initiate and complete such investigation at the earliest, in any case not later than 6 months from the time of lodging the claim. Subject to the provisions of section 47 of the Insurance Act, 1938, where a claim is ready for payment but the payment cannot be made due to any reasons of a proper identification of the payee, the life insurer shall hold the amount for the benefit of the payee and such an amount shall earn interest at the rate applicable to a savings bank account with a scheduled bank (effective from 30 days following the submission of all papers and information). Where there is a delay on the part of the insurer in processing a claim for a reason other than the one covered by sub-regulation (4) of Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002, the life insurance company shall pay interest on the claim amount at a rate which is 2% above the bank rate prevalent at the beginning of the financial year in which the claim is reviewed by it. The basic difference in nature between a general insurance claim and life insurance claim is the value of human life which cannot be measured. While general insurance claims are governed by the principle of actual loss amounts, life insurance policies are basically valued on the sum assured and the entire sum assured becomes payable. Secondly, in case of life insurance policies, every policy sold will definitely result in a claim, either death or maturity claim, in case of general insurance, a claim is contingent in nature, i.e. upon the happening of the issues loss event only, then claim is payable. In the above case, the claim under the ULIP policy presents an early death claim, which appear to be suspicious and needs thorough investigation regarding the reasons for death immediately, follow the issuance of the policy. The insurance company is liable to pay at least its existing fund value of ₹18,559 as a full and final settlement of the death claim, if the claim is suspicious. If there is no reason to suspect and death is due to natural and genuine reason, then the insurer would be liable to pay the sum assured of ₹5 lacs which was agreed at the time of the proposal.