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Errors Which Can Lead To Rejection Of Term Insurance Plans Claims

Errors Which Can Lead To Rejection Of Term Insurance Plans Claims

A term insurance policy is meant to cover your loved ones financial when you are not there. An unfortunate death can lead to a disastrous situation for your family if the insurance provider rejects a claim.  Though in some cases of death, the claims can be denied depending on the insurance company but there are certain errors which you always avoid so that claim rejection doesn’t happen in a normal scenario.

As a consumer few mistakes and errors which you should always avoid are:

  1. Hiding information: The information furnished by you on the proposal form is the basis upon which your insurer underwrites the policy or rather saying assesses the risk associated with insuring you. Concealing important information necessary for risk assessment like pre-existing health condition, family history, details of other insurance plans which you might have earlier taken , information relating to your lifestyle patterns like smoking and drinking habits can prove fatal in long term. When you buy term insurance policy the insurance company generally considers the information provided by the consumer as genuine and evaluates the risk based upon it but in case a claim arises it does all possible checks to evaluate the claim and in case the insurer finds any information provided by the policyholder is wrong, the insurer holds the full rights to reject your claim.

Read Related Article: Is There Any Right Age To Buy A Term Insurance Plan? 

  1. Misrepresentation of information:   The state of misrepresentation arises when the information disclosed at the time of taking the plan was not fully given by the policyholder. You might have shared the information that you smoke but wrongly shared the information about your smoking habits. At times the misrepresentation also happens because we are not able to understand what is being exactly asked for so it is advised to talk to your insurance company or your insurance advisor to get clarity. If you are buy the insurance plan online every website has live customer support to help you in this case.
  2. Policy is lisped status:  This is one of the major reasons behind claim rejection. You should be aware that the time you miss out a premium the benefits associated with your term plan also vanishes. In every year when the policy premium becomes due the insurance company notifies you about the same and even given a grace period of 30 days under which you have to pay the premium. If you still miss the opportunity the policy stands lapsed and so do the benefits associated. Anyways in case of a lapsed policy the claims are sure to get rejected.
  3. Incomplete nomination details:  This is a case where the claim would not get rejected but the family might have to face the legal hassle to get the term insurance claim accepted. Once you mention the right details of the person who is your legal nominee the insurance company processes the claim faster and they don’t face any unwanted irritation.
  4. Cause of death: In some cases of death the claims are ought to get rejected which are already written in your insurance document. Some of the common reasons under which the claim can get rejected are death due to drug overdose, death due to intoxication ,suicidal death or death due to addiction of unprescribed drugs, so it is always advised go through the policy terms and condition is  detail before you buy a policy to avoid rejection of claims in such cases.

One should very much clear about the error mentioned above as these are some of the common mistakes which we generally make. If don’t put your family into the unwanted hassles then we always try avoiding these errors