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Make Sure Your Insurance Claim Isn't Rejected

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March 07, 2017
Life insurance aims to provide financial protection for your family in case of your unfortunate demise during the term of the policy.There are insurance buyers who focus on other considerations such as tax savings , premiums or investment returns, and ignore the key objective of financial security

In case the insurance claim is rejected, the entire purpose of buying insurance is defeated. It thus becomes important to know the reasons that can lead to rejection, so that if your loved ones ever file a claim, they don't have to face rejection.

Here are some of the key aspects to consider which would ensure that your claim doesn't get rejected:

A life insurance plan forms a vital constitution of one's financial planning in the following ways:

Most of the insurance buyers consider filling the proposal form as a time consuming task and they mostly ask insurance agents to fill up the form. It's a major mistake. After all, you are buying a life insurance policy to ensure financial security for your loved ones and if the agent does not fill out your details correctly, then in the event of your untimely death, the claim may get rejected, in case the insurance company finds that the information provided in the proposal form is incorrect.

It is thereby advisable to fill the proposal form yourself. You should fill out the correct personal information such as your age, occupation, income,existing policy and medical details. On a cautious note, you can retain a copy of the proposal form and verify the details again. In case you spot any discrepancy, it's wise to notify the insurance company to ensure the discrepancy found is informed and rectified.

Sometimes insurance buyers do not provide correct information about their medical condition intentionally or sometimes unknowingly (since they are not aware about their existing medical condition). Medical conditions such as heart disease, diabetes, asthma, etc.of the life insured and also his family medical history needs to be disclosed, else your death claim may get rejected on the ground of hiding the medical history which is a material fact.

You should be careful with furnishing details regarding your medical condition. If you have any medical history, smoking habits, alcohol consumption or pre-existing disease, make sure that the information you are providing is disclosed and correctly stated.

Life insurance companies may ask the insurance proposer to go through the medical tests to ascertain the present medical condition of the buyer. Some proposers try to avoid medical test, as they think it's just as a waste of time or have a fear that the tests may disclose a medical condition that may cause the insurance company to raise the premium amount or reject the insurance proposal.

It is wise not to avoid medical tests. Probably everything will be fine and in case, any medical condition is identified, it will help you to get the treatment in its early phase. By undergoing all the medical examination as asked by the insurer, the chances for claim rejection on pre-existing medical conditions reduces.

A Claims Settlement ratio is a key metric that determines the number of claims settled by an insurance company during a financial year. It gives you an idea about the probability that your insurance claim will be paid. The higher the claim settlement ratio, chances will be more for settling the claims. It is thus advisable to choose an insurance company with higher and consistent claims settlement ratio.

Choosing an insurer having a high claims settelemtn ratio is considered as a smart move. Focus on the past 3 to 4 years track record in context with claims settlement ratio to scrutinize the consistency of the company.

Insurance companies only pay claims amount for policies that are active. There are people who don't understand that delay in paying premiums beyond the grace period may result in policy lapsation. After the policy has lapsed,the benefit under the policy becomes void. Your family or nominee will not get any sum assured in case of the insured event and the premiums that you have paid will become useless as well.

It is thus recommended to pay the due premium on time and in case, you forget to pay premiums on its scheduled date, you should not miss its payment before the completion of grace period, else your policy will be lapsed. Delaying the premium payments could also attract penalty charges. Moreover, having a clean track record of paying premiums on time will provide one less point to the insurer for negotiating over the settlement of claims.

Another big reason for claims rejection or delay in policy proceeds, is that the beneficiary of your policy is not updated with the insurance company.When you are single and buy a life insurance policy, you may nominate your parents as a nominee and when married, you have the option to nominate your wife, so she can receive the life insurance benefits in the event of your unfortunate demise

When you want to change the nominee details, you need to inform your insurance company and make sure that the nominee details are updated with the insurance company. An updated nominee details at the time of claim just eliminate any chances for claim postponement on the grounds of incorrect or no nominee details.

Life insurance serves the purpose of financial protection for your family , in case of your untimely death. We have discussed the key aspects that one should be attentive about, while buying a life insurance policy and during the policy term, that would ensure an easy claim settlement by the insurance company.

It is also recommended to keep your loved ones informed about the life insurance policies you have bought, contact number of insurance advisor and the claims procedure of the life insurance company. You should also tell them about the list of documents required to file the death claim. In a tough time of your death, at least they don't have to face the financial hardship.

Author's Bio

Harjot Singh Narula, Founder & CEO, www.comparepolicy.com

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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