How Can You Avoid Life Insurance Claim Rejection?

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Many times claims for life insurance policies can also get rejected that can cause your family great trouble in times of emotional crisis. Incidents of accidents and natural disasters have made people realize the need for a life insurance policy. Therefore if a claim for a life insurance policy is rejected the purpose of supporting a family in the absence of the breadwinner is defeated. However, the claims are mostly rejected on reasonable grounds. Whereas having proper knowledge about the terms and conditions may help you to avoid rejection. Here are some of the top reasons why planes are rejected generally:

  1. Incomplete information in the proposal forms: A lot of life insurance policyholders make the common mistake of allowing their agents to fill up the form on their behalf. They do this because they feel that the form filling process is time-consuming and complicated. However, it is highly advisable for you to diligently fill the form by yourself. A life insurance policy is issued on the basis of the information you provide in the proposal form. If the life insurance company finds that you have failed to provide complete information or hide any kind of important fact. They might reject you on the grounds of nondisclosure of accurate facts. Depending upon the agents to fill a proposal form leaves you with high chances of incorrect information to be submitted just to meet their target. Also as a fact, the agents may not be aware of all the details about your medical history that need to be provided.
  2. Hiding Information: All the information that you provide while filling up the proposal form is important as the insurance companies use this information to fix your premium. The information that is vital for this is your age, occupation, smoking habits, alcohol consumption, pre-existing diseases, family history, details of all other policies you hold etc. You must in no way try to conceal any of the information as it may give legitimate grounds to your company for rejecting your claim.
  3. Pre-existing diseases: The claims that are designed on the basis of Pre-existing ailments may get rejected by the company in case they are not revealed beforehand in the proposal form. The insurance regulation defines preexisting disease as any kind of symptom or diagnosis or treatment for a medical condition that a policyholder goes through 48 months prior to the issuance of the policy. If you have any kind of Pre-existing disease then it should be declared and not concealed. If you fail to do so then your life insurance company may reject your claim. It is also important to properly read and understand the terms and conditions of the company regarding claim and coverage of the policy or rider of pre-existing illnesses.
  4. Do not let your policy lapse: Claim settlement is processed only on Active policies. So it is very important that you pay your premiums on time. An insurance company will not be able to settle any claims if your policy lapses because of the non-payment of premiums. If by chance you miss paying the premiums on time make sure that you make the payment within the grace period to avoid a policy lapse. Your claim might get rejected by the company even if you are a day late from the end of your grace period.
  5. Update your nominee: It is very important to update the information about your nominee. For example, if you have made your parents as nominee while you were single then it would be a wise decision to include your spouse as a nominee after your marriage. It may so occur that your spouse in the end will be the one in most need of the money to support your family and secure your children’s future in your absence.
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Also, keep in mind that any undue delay for the claim may raise doubts and further complicate the whole procedure of claim settlement. To ensure a smooth process most of the companies provide a claim settlement officer. So remember to inform your nominees and family about your policy and provide them with the required contact numbers of your agent and Company. Keep them updated and aware of documents and related procedures.

Shailesh Kumar

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