When does a life assurance company generally pay out a claim?

A life assurance company typically pays out a claim upon the death of the policyholder. This is the primary purpose of life insurance: to provide financial support to beneficiaries when the insured individual passes away. The death benefit can help cover various expenses, such as funeral costs, outstanding debts, or provide ongoing financial support to dependents.

The claim is processed only when the insurer receives the necessary documentation, such as a death certificate and information about the policy. The payout amount is predetermined by the policy and does not depend on when the policy was purchased, as long as the policy was active and premiums were paid up to the time of the policyholder’s death.

Other options, such as policy maturity or cancellation, represent different scenarios that do not pertain to the death of the insured. In particular, the maturity date of a policy usually refers to a whole life or endowment policy reaching its end, at which point the company pays the policyholder or beneficiaries according to the terms of the policy. However, this typically occurs only for specific types of life insurance policies designed to pay out at a set age or term, rather than upon the insured’s death. Similarly, a cancellation of a policy or a lapse in payments results in no payout unless specified conditions are met