In LIC Policy death claim where there is no nominee the waiving of Legal evidence of title plays very important role. In the realm of life insurance, a peculiar scenario arises when the policyholder, also known as the life assured, passes away either before the policy’s maturity date or after it but prior to receiving the maturity payout. This situation becomes even more intricate when no nominee, assignee, or trustee is designated under the policy. In such cases, the title to the policy funds becomes open, awaiting rightful claimants. In strict legal terms, the funds are payable to the individual who can furnish proof of legal ownership, typically in the form of a succession certificate or a probate of the will in their favor.
However, the insurance industry acknowledges the potential hardship this may impose on claimants. As a response, the Life Insurance Corporation (LIC) has instituted a practice to waive the requirement of strict legal evidence of title. This serves as a pragmatic measure to alleviate the burden on those making a legitimate claim.
Mitigating Hardship with Waiver of Legal Evidence
In instances where the claimant provides the court-sanctioned probate of the life assured’s will or a letter of administration, the need for a certified copy of the schedule of assets is obviated. This means that the policy funds need not be scrutinized to determine whether they have been included in the assets.
However, it’s important to note that the initiative for invoking the waiver should come from the claimant, and not from a mere suggestion by the Corporation. Claimants are encouraged to exhaust all possible avenues of obtaining and submitting the required proof of title to the policy funds. Only when these efforts have been thoroughly pursued and exhausted, should a specific written request for waiver of legal evidence of title be submitted to the Corporation.
Conditions for Waiver of Legal Evidence of Title
When claimants encounter authentic challenges, LIC provides a procedure to exempt them from the rigorous demand for proof of title. The criteria for obtaining this exemption are outlined below:
Form F.NO. 3806: Nearest heir of the deceased life assured can complete an application to dispense with legal evidence of title, provided that the net payable claim amount under all policies does not exceed Rs. 40,000.
Download Form No. 3806
Form F.NO. 3806-A: For cases where the net claim amount surpasses Rs. 40,000, an affidavit on a stamp paper worth Rs. 100 or as per the prevailing stamp value declared by the State Government must be submitted.
Download Form No. 3806A
Form F.NO. 3807: When the net claim payable exceeds Rs. 1 lakh, a consent letter from a surety is required. Relaxation is granted when LET is to be waived, and the net payable amount is up to 1 lakh, wherein surety can be waived. In such cases, an indemnity letter from all legal heirs, duly notarized as a self-surety, should be obtained.
Download Form No. 3807
Form F.NO. 3805: An indemnity bond on a stamp paper worth Rs. 200 or of the requisite value as per rates declared by the state government should be executed jointly by class I legal heirs and surety. This is applicable when the net claim payable exceeds 1 lakh under all policies. If both evidence of title and guardianship certificate require waiver, a single indemnity bond can serve both purposes.
Download Form No. 3805
In Conclusion
The waiver of legal evidence of title is a compassionate and practical approach employed by the Life Insurance Corporation to ease the burdens faced by claimants who find themselves entangled in legalities following the demise of the policyholder. By allowing flexibility in the documentation process, LIC acknowledges the challenges faced by beneficiaries and ensures a smoother claims settlement procedure.
Frequently Asked Questions (FAQs)
What is the purpose of waiving legal evidence of title?
This waiver is designed to ease the burden on claimants who might face challenges in providing strict legal proof of ownership when claiming policy funds.
Is the waiver process automatic?
No, claimants must initiate the waiver request in writing after attempting to obtain the required proof of title through legal channels.
Are there specific forms for waiver requests?
Yes, LIC provides Form F.NO. 3806, Form F.NO. 3806-A, Form F.NO. 3807, and Form F.NO. 3805 for different scenarios of waiver.
Download Form No. 3806
Download Form No. 3806A
Download Form No. 3807
Download Form No. 3805
What if the claim amount is below Rs. 40,000?
In such cases, claimants can complete Form F.NO. 3806 to apply for waiver of legal evidence of title.
How does the Corporation address cases with a net claim amount above 1 lakh?
The Corporation requires an indemnity bond, as outlined in Form F.NO. 3805, along with other necessary documents.