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Common Reasons Why Your Endowment Policy Claim Can Be Rejected

Published On Jan 13, 2022 10:00 AM By InsuranceDekho

If there is even the tiniest inconsistency in the information provided by the policyholder, the assurer has the authority to deny any claim made under the policy.

In general, insurance is a contract between an assurer and an assured party that is founded on a set of principles. One of these principles states that both contracting parties must operate in good faith. To put it another way, while submitting information to the assurer, the policyholder must be completely honest and accurate, and the assurer must be equally honest and transparent in their service to the policyholder.

Common Reasons Why Your Endowment Policy Claim Can Be Rejected

Common Reasons Why Your Endowment Policy Claim Can Be Rejected

Here are some things to know about common reasons why your Endowment Policy claim can be rejected:

  • Delay In Filing A Claim

Every business has a deadline within which a claim must be lodged following an occurrence. Because some investigations are time-sensitive, this is the case. If a life insurance claim is not filed on time, the insurance company has the ability to reject it.

  • Non-Payment Or Irregularity In Premium Payment

You must pay premiums on a regular basis in order to keep your life insurance policy active. It will immediately lapse if you are unable to pay. You will also be given a grace period by the company. Any death insurance claims that emerge due to an expired policy will not be honored by the insurance company unless you choose to renew the policy or purchase a new one in its stead.

  • Not Being Subjected To Medical Examinations

When applying for insurance, medical records are required. When acquiring an insurance policy, insurance companies ask you to take a few medical examinations. This allows them to learn more about your health and the ailments you have or are at risk of. Your insurance premiums are based on this. If you refuse to take a medical test or if you have a medical condition that you do not reveal at the time of application, the insurance company is likely to hold it against you and deny your death insurance claim.

  • Facts Not Being Disclosed

The claim may be rejected if the information is withheld or disclosed incorrectly. The rates are determined by the assurer's age, medical history, profession, and health status. As a result, before honoring a claim, the insurance company double-checks all of the facts to ensure that they are accurate. When filling out the policy form, it's possible that you'll make a mistake. There's also the possibility that the corporation made a clerical error. As a result, it's critical to double-check all of the details before signing on the dotted line.

  • Not Updating Changes

Things like a change of address, an accident, or the death of a nominee must be reported to your insurance company right away. If you do not do so and a claim is filed, the insurance company is likely to deny the claim.

  • Anything That Isn't Covered By The Insurance

Insurance companies are frequently approached with claims that are not specifically indicated in the offer document, such as suicide, drug overdose death, and accidental death while intoxicated. Insurance companies will reject such claims outright since they are invalid.

  • Policy Lapse

The existence of an active policy is the primary criterion for having your claim granted. To keep your coverage active, you must always pay your premiums on schedule. If your coverage has lapsed owing to non-payment of premiums, your claim will be denied. If you miss your premium payment due to unavoidable circumstances, you should make up the difference during the grace period. The insurance company will deny a claim if it is filed even a day after the policy has expired.

  • Unentitled Nominee

A nominee is someone who is entitled to all of the policy benefits according to the policyholder's wishes. If no nominee is updated and a legal heir cannot be determined to the satisfaction of the insurance provider, the claim may be rejected.


An insurance company will request documents to verify the line of succession if there is no nominee. This is a convoluted system that causes delays in getting the claim money cleared. When a term plan is purchased at a young age, the nominees are often the person's parents. Claim rejection can also occur if the nominee fails to update their nomination after their death. When purchasing a term insurance policy, a nomination is so crucial. Always double-check the details and make sure they're up to date.

Do read - Is It Safe To Purchase An Endowment Policy Online?

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.

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