Is It Fair for a Company to Issue a Claim Cheque to a Deceased Instead of the Mother?

Is it right for a private company to issue the GPA claim cheque in favor of 'DECEASED' when the claim form has been submitted by the Mother of the Deceased? There are no issues with legality or hassle for the Mother to claim the GPA amount. During the processing of the GPA claim, the company did assure verbally that the cheque would be in favor of the Mother and they were in talks with the Insurance Company. Later, without giving any reasonable reason, they released the cheque in favor of the Deceased and are not entertaining the plea of reissuing the cheque in favor of the claimant, i.e., Mother of the Deceased.

Thanks,

Hi Anita, thanks for the note. My issue is with the company where the deceased was working. The insurance company has cleared the GPA claim file and issued the cheque in favor of the insured, which is the company. Thereafter, the company should have issued the cheque in favor of the deceased's mother, as the claim documentation was signed and completed by her. Notwithstanding this, the company seems to have purposely issued the claim cheque favoring the deceased. The company's HR and Finance are turning a deaf ear!

Seeking Authority for Resolution

Is there any authority where I can take this matter up?

Best regards,
Laks

Could you please tell me if the insurance company is private or government-owned? Also, if the concerned person has designated his mother as the nominee, then the cheque should be in the mother's name. I suggest that you go personally to the company and provide them with an affidavit stating that the person claiming the money is legally the nominee of the fund. When you visit them, find out which insurance company covers this policy. You could contact the Ombudsman Center and seek guidance from them.

Most companies play it safe as there have been numerous cases where funds were released to an individual, only to have others come forward to claim the same funds.

Regards,
Anita

Hi Anita, The insurance company is a public sector entity. I would perhaps go with your suggestion of an indemnity bond and will pursue it further. The relevant NOCs have also been provided to the private company, but they are not paying any heed to this.

Thanks,
Laks

First of all, tell us whether:

1. Was the deceased married or not? If yes, and if surviving, what happened to the surviving spouse and any children? They are the ones legally vested with the right to claim.

2. Did the deceased file any nomination papers when alive? If so, in whose favor? If there is a nomination paper, the payment should have been made to the nominee or divided between the immediate surviving family members as per the Act, or upon obtaining NOCs from these family members.

3. There is no meaning in issuing the check in the name of the deceased as he/she is no more, and the claim itself became payable only because of the death of the deceased. It is an irresponsible way of settling a death claim. Who would issue a funeral expenses check in favor of the deceased?

Regards, Kumar.S.

It is rightly said by Mr. Kumar that they are acting very irresponsibly. In fact, it is an insult to the deceased person. Laks, please write a letter stating this and attach the affidavit indicating that the cheque should be issued in the name of the mother as the sole nominee. Attach the issued cheque with the letter. Send it via registered post to obtain an acknowledgment. However, do not include the xerox copy of the cheque and the letter for further reference. Also, request them in writing that they cannot issue the cheque in the name of the nominee.

Once you receive a reply, you can use it as proof and approach the consumer court, as it is a breach of protocol, since no one can do so in the name of the deceased person. I would also like to ask you to provide me with the details of the company and the insurance organization. I can check and let you know if there is any concerned person who can be approached.

Regards,
Anita

Like S Kumar pointed out, there's one very crucial aspect missing in your posting - is the deceased married? When the company agreed verbally that the cheque would be given in the mother's name, why did they change 'unilaterally' later? Also, was any effort put into understanding the reasons for this change of stance by the company?

Apart from the nomination in the insurance papers by the deceased, please confirm if the deceased made any nomination at the bank while opening the account. If yes, in whose name is the nomination?

Regards,
TS

It is not clear whether the death occurred during employment hours or outside of employment hours, if legal heirship documents have been provided and submitted to the company, etc. If the company issued a cheque in the name of the deceased, proper documents might not have been submitted. If the death occurred during employment and if workers' compensation (WC) is applicable, the claim must be settled through the WC commissioner only. Additionally, under the Employees' Provident Fund (EPF), the Employees' Pension Scheme (EPS) pension and Employees' Deposit Linked Insurance (EDLI) amount would become payable to the legal heirs.

Regards,
M. Venkatraghavan

Issues to Consider in GPA Claim Cases

In such a case, the issue that needs to be borne is as follows:

• Who has paid the premium - is it the company or the employee? Do note in case the premium was being recovered from the employee's salary.

• Was there a nominee declared or not?

An ombudsman will not be of much help at this stage or in this case. Often there arises a dispute on the legal heir of the deceased employee, and the employer doesn't want to take the onus of running the risk of litigation. Such cases are common in instances where on one hand you have a spouse and on the other hand, you have parent(s). The companies would then issue the check in favor of the employee and let the family sort out the issue. If this be the case, do write in, and perhaps I can suggest further what you can do.

Regards,
Deepak