Sometimes when a legal heir of a diseased life assured approaches the life insurer for payment of death claim in a particular policy, they are asked to bring the succession certificate to make the payment due to open title in policy.
Open title is absence of valid nomination or assignment in life insurance policy. Open title in a life insurance policy may arrise due:
Open title majority of time delays the payment of death claim to legal heirs. Due to absence of valid nomination and assignment, insurer is unable to make claim payment. And merely by making claim in policy does not make someone actual beneficiary in the policy. To make payment to actual legal heir of life assured, a insurer require a valid document of succession or will made by the life assured mentioning policy details. In absence of any will, succession certificate is issued by court mentioning legal heir of life assured, issuance of succession certificate is a time taking process. So until a succession certificate is issued and submitted to insurer, insurer do not make payment in policy having open title thus delays the payment. In case of absence of Class I legal heir (As per The Hindu Succession Act, 1956) or dispute among the legal heir may further delays the payment of death claim.
As I have discussed above how a policy may result into open title and its effects on claim payment, a policy holder must remember following things during policy term or while taking policy:
Keeping these things in mind will help your rightful nominee to get the claim payment on time. To know more about Nomination please Click Here