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Life Insurance Claim Rejection the Shield Shattered

Updated On Apr 26, 2021

Life Insurance is one of the best ways to protect the financial security of the family members of the insured. There are chances for the life insurance claims to get rejected and this could be the scariest thing that can happen to the family of the insured. Thus it is important to take all caution while filling the insurance form to prevent claims rejection. 

Also Read: How To Make Quick Online Life Insurance Claims?

Common Rejection Reasons For Life Insurance Claims 

A life insurance plan can be an important financial product for the family members of the insured after their demise. But a few mistakes made while procuring the policy can affect the claims settlement and it is important to prevent them to maintain the shield intact. Some good reasons why the claims get rejected are as follows.

1. Delay in Filing a Claim

Any delay or carelessness in submitting the claim application is the primitive reason for claims rejection. In the event of sudden demise of the policy holder, the insurance company should be informed at the earliest. 

2. Correct Information About the Nominee

The claims form should have the correct name and detailed address of the nominee at the time of claiming the policy. The nominee should furnish proof for the details furnished. If the details are found to be manipulated by the nominee, then the claims will get rejected.

3. Prompt Payment of Premiums

The premiums for the life insurance plan should be paid on time. Any non-payment of the premium can result in the lapse of the policy and a lapsed policy will not be considered for claims settlement.

4. False Information in the Application

Policyholders should not have furnished any fake information to the company, at the time of procuring the policy. If they are found to have furnished false information, then the policy will be canceled and legal action will be taken against the policy holder.

5. Exclusions in the Policy

Before making claims, it is important to learn about the exclusions in the policy. In some policies death due to terrorist attacks, drunk driving, and natural calamities may not be included, creating difficulties in making a claim.

6. Failure to Update Details About Nominees

A majority of people opt for a life insurance policy at the beginning of their careers, as their ultimate aim would have been tax saving. They would have appointed their parents as nominees and as they get married and grow financially they would have failed to update the nominee information. It is important to update the information of the nominee at the earliest as the insurance company will pay the sum insured only to the nominees. 

Must Read: How to Process Life Insurance Claims?

Reasons for Life Insurance Claim Rejection

Bottom Line

It is important to disclose all important information to the insurance company at the time of submitting the policy documents. If any documents are missed or information is altered, it should be brought to the notice of the insurance company at the earliest. If in case, the claim is rejected, it has to be brought to the notice of the concerned authorities at the earliest. The representative from the company will be always ready to help people with the claims settlement. 

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