Know Why Life Insurance Claims Are Denied
Published On Mar 23, 2022 10:00 AM By InsuranceDekho
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Life insurance plans cover the insurer for any eventuality. In case the need for a payout arises, you need to file a settlement claim with the insurance company. The company verifies all the details and then releases the claim settlement amount. However, there is a chance that the life insurance claim might be rejected.
6 Reasons Why Your Claim Can Be Rejected
Read on to know the five most common reasons why the insurance company might reject your claim-
1. Anything Other Than What Is Covered In The Policy
Insurance companies are often approached with claims other than those that are explicitly stated in the offer document, for example, suicide, death by drug overdose, and accidental death when intoxicated. Such claims are rejected by insurance companies outright as they are invalid.
2. Not Disclosing Or Wrongful Disclosure Of Facts
Withholding or disclosing wrong information might result in rejection of the claim. The premiums are decided based on the age, medical history, profession and health condition of the insurer. Hence, before honoring a claim, the insurance company verifies all the facts to see if they are correct. A mistake might creep in when filling the policy form. There is also a chance that the company might have committed a clerical error. Hence, it is important to verify all the details before you sign on the dotted line.
3. Not Updating Changes
You must immediately bring things like a change in address, an accident, or the death of a nominee to the notice of your insurance company. If you fail to do so, and a claim arises, then the insurance company is likely to reject the death insurance claim.
4. Not Undergoing Medical Tests
Medical records are necessary when opting for insurance. Insurance companies require you to undergo a few medical tests when purchasing an insurance policy. This helps them know your health condition and what illnesses you have or are at risk of. Your premiums are decided based on that. If you do not undergo a medical test or if you have a medical condition and you do not disclose at the time, the insurance company is most likely to hold this against you and reject the death insurance claim.
5. Non-payment Or Irregularity In The Paying Of Premiums
In order to maintain the life insurance policy, you are required to pay premiums on a regular basis. In case you are unable to pay, it lapses automatically. The company also provides you with a grace period. In case of a lapsed policy, any death insurance claim that arises will not be honored by the insurance company unless you have chosen to renew the plan or buy a new one in its place.
6. Delay In Filing A Claim
Every company has a stipulated period within which a claim needs to be filed after the eventuality. This is because some investigations are time-sensitive. The insurance company has a right to reject the life insurance claim if it is not recorded in time.
Now that you know what things can lead to a payout being denied, you need to stay alert and check your insurance documents thoroughly. This will ensure that in case a need arises, the life insurance claim process will go off smoothly.
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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.