6 Reasons Your Term Insurance Claim Can Get Rejected
Ever thought what will happen if your term insurance claim gets rejected The grief of losing a loved one and the stress of coping with finances can bring your familys world upside down
Ever thought what will happen if your term insurance claim gets rejected? The grief of losing a loved one and the stress of coping with finances can bring your family’s world upside down.
Term insurance plans in India are designed to provide a financial safety net to your near and dear ones in your absence. However, not providing correct details in your application form can get your claim denied at a later stage. So, if you wish to prevent such a horrific scenario then, as a policyholder, you should know about the things that can get your claim rejected.
- Carefree Attitude Towards Insurance
Rushing through the insurance purchasing procedure can always cause complications. The process involves the careful reading of the endless details that are present in the application or proposal form. However, to avoid this hassle, a majority of us hand over the responsibility to our insurance agent.
All we do is sign the document and free ourselves of the responsibility. However, this is wrong; there are many minute details that the agent might not remember or he/she might fill some wrong details. These small issues can backfire at the time of claim settlement. So, you must never rush through the process of filling your form and verify every detail.
- Refraining from Medical Tests
Depending on the information that you provide in the proposal form; the insurer assesses the risks and decides your premium amount. When you choose to go for a higher sum assured, it is always better to go for medical tests. If you refrain from it, the chances of your claim getting rejected increase.
Insurance companies have a team of medical experts, who check all the details before the settlement of claims. And if they find that you have hidden some information, no matter how minute it is, you claim will get rejected.
- Not Specifying the Nature of Your Job
Your job nature has a specific impact on your insurance policy. The risks involved in your job should always be communicated with your insurance provider. If you have a job that involves high-risk like, fire-fighting, working in a mine, working at a construction site, then notify your insurer. So, that the insurer does not feel you have hidden any information and your claim will not be denied.
- Not Disclosing Your Medical History
Most of the times, people tend to hide their medical conditions from their insurance provider. This can lead to your claim getting rejected. Based on your medical condition the insurer decides the amount of premiums charged. If you do not fill out the necessary details in the application form, the insurer has every right to reject your claim.
- Lapse of Policy
It is the prime threat to claim settlement. Policy lapse or lapse of policy means that your policy has lost its existence on papers. Therefore, if you file a claim for policy that has been lapsed, you will not get any money.
It is essential to pay necessary premiums for keeping your insurance plan working. Even if you are late on payments, insurance companies provide a few days as grace period so that you can pay your premiums and your policy won’t lapse.
- Not Disclosing Old Insurance Policies
A lot of people who have more than one insurance plans, do not disclose it to the new company they buy a policy from. However, under the mandatory policy declaration rule, if you do not declare information of your existing policy insurer can reject your claim. Declaring your prior insurance policies is necessary. Regardless of how much your policy sum assured is (even if it is Rs. 1 lakh), you must disclose your previous policies before taking a new life insurance policy (This means term plan, ULIPs with insurance cover, Traditional Policies).
While filling your insurance application, you must be extremely transparent. If you are honest with your details, insurers will not have any problem in clearing your claim. Many leading insurers like Future Generali even settle the claim within a week. Therefore, to reap the benefits of term insurance plans in India, you must ensure that you follow the guideline correctly.