5 Obvious Reasons Why Your Life Insurance Claim Gets Rejected

People purchase a life insurance policy with the hope to provide financial security to their family in an unfortunate event. However, sometimes the insurance providers reject the claims made by the beneficiary after the demise of the life assured. The purpose of the life insurance policy gets defeated in such situations, leaving your family with a financial burden that becomes more prominent if you were the family's sole breadwinner. Hence, it is essential not to neglect little details which can lead to the claim rejection. Read on to know about some common reasons which can lead to claim denial. 

5 Obvious Reasons Why Your Life Insurance Claim Gets Rejected

Here is the list consisting of 5 obvious reasons behind your insurance claim rejection by the insurance provider. 

1. Disclosing False Information

The most eminent reason behind a life insurance claim rejection is filing false details and personal information by the life assured during the policy inception. This is because the sum assured and the payable premium amount are based on age, annual income, health status, or any family history of diseases of the life assured. Hence, you must fill in all the details correctly to get the most suitable plan to meet your needs and requirements. Moreover, it is essential to maintain the trust and sanctity of the contract between you and your insurer by revealing correct information in your policy application form.

2. Unpaid Premium Instalments

Life insurance is a contract between the life assured and the insurer whose functionality and validity is ensured by regular premium payment. Thus, you must pay all the premium instalments on time. Even if you fail to pay the amount within a specific duration, many insurers provide a grace period of extra 15-30 days according to the policy to help the policyholder pay the pending premium amount. However, if the policyholder still fails to pay premium instalments, the policy gets discontinued, and all the benefits are terminated.

3. No Proper Beneficiary

The beneficiary or the nominee is the individual who gets the death benefits after the death of the life assured. Many people appoint their parents as the nominee when they buy a life insurance policy at a young age. However, they forget to update their nomination when the parents pass away or when the life assured gets married and have children. Therefore, it is crucial to update your nomination by appointing a proper nominee like your parents, spouse or children at different phases of your life to get the direct benefits of the policy after your demise. 

4. Avoiding Medical Examination

The life assured has to undergo a medical examination before the issuance of the life insurance policy. The results help the underwriter in risk evaluation and decide if the application should be approved or not. Moreover, if the person has a history of pre-existing illness, a plan can be designed to meet his/her specific needs and future requirements. Hence, it is advisable to undergo the test to improve your chances of getting the right policy while avoiding chances of claim rejection based on non-disclosure of any critical illness, which can eventually lead to death. 

5. Policy Exclusions

The terms and conditions of the insurance policy must be thoroughly read and understood to evaluate its capability to meet your requirements. The death-related situations under the policy exclusion list consist of death due to war, terrorist attack, suicide or childbirth, etc. These should be considered while purchasing a policy as ignorance can lead to claim rejection after the death of the life assured. 

Conclusion 

It is advisable to carefully fill your application form for the life insurance policy to understand the terms and conditions better.  Moreover, a careful comparison between different policies offered by various insurers must be made before choosing the most suitable one for yourself. You can even consult an entrusted insurance agent or a credible financial advisor to help determine the right life insurance policy at affordable prices. 

Also read:-

• Steps To Be Followed In The Claim Settlement Process of A Term Plan
• Types of Deaths Covered And Not Covered By Term Insurance

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.