How to Ensure that Your Term Insurance Claims Are Never Rejected: Most individuals buy term insurance plan to financially secure their family’s future. The ‘sum assured’ facility provided by these policies ensures that even after the policyholder’s death, his/her nominee can make financial claims as per the provisions made under the policy. However, instances of claims rejections are not unheard of.
Recently, a case happened, when Mr. Rohit Sharma went to file the claim on his deceased father’s insurance policy. As per the terms of the policy, Mr. Rohit, being the sole nominee, was supposed to get a sum assured of INR 15 lakhs upon the untimely demise of his father during the insurance term. However, his claim was rejected on the basis that his father had failed to disclose his existing heart conditions, which eventually led to his demise.
Now, there are a number of reasons why a term insurance claim can get rejected. Some of them include:
- Incorrect/ false/ misleading information provided in the insurance application form
- Non-disclosure of past medical history
- Failure to update personal/ nominee information
- Non-payment of premium on time leading to the lapse of the term insurance policy
- Non-disclosure of existing policies
- Failure to adhere to any norms/terms and conditions mentioned in the term insurance plan
- Permanent exclusions in insurance policies, such as treatment costs for HIV-Aids, cosmetic surgeries, dental implants, infertility treatments, etc.
Ways to make sure that your term insurance claims never get rejected
1) Do not submit any false information
Perhaps the most ethical way to ensure that your insurance claims do not get rejected is to be upfront and honest with your insurance agent from the start. While applying for an online term plan, make sure you do not provide any false information, whether intentionally or unintentionally.
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2) Make sure you can afford to pay the premium on time
You can only enjoy the term insurance benefits if you pay your premium on time. Thus, at the time of taking an insurance plan, make sure that you have absolute clarity on the premium amount and whether you will be able to afford to pay them over the policy’s tenure. Any delay or failure to pay the term insurance premium may lead to the lapse of the policy or subsequent rejection of the claim upon maturation.
3) Be upfront about your past medical history
Most term insurance benefits include an added critical medical rider for offering a coverage against certain serious medical conditions like cancer, hypertension, stroke, etc. However, to enjoy these medical benefits, you are expected to be upfront of about your past medical history or existing medical conditions. It is also crucial that you disclose any illness or any hereditary conditions in your family. This information is extremely crucial when it comes to calculating your term insurance’s premium, and the resulting sum assured promised to your nominee.
4) Keep your nominee information updated
Upon the policyholder’s death, a sum assured is paid to his/her nominee or beneficiary. This person could be a family member or a close friend. However, if you fail to update this information in your term insurance plan, any claims made by your kith and kin will not get accepted. Also, it is important that you update this information at appropriate times. For instance, suppose your nominee is a minor. You will have to enlist a guardian who will be handling the sum assured on his / her behalf upon your untimely demise. However, if the nominee reaches a legal age during the policy tenure, you can directly make provisions to let the sum assured go to your nominee.
To ensure that your insurance claims never get rejected, make sure that you follow the tips mentioned above. In this way, you can be rest assured about safeguarding the financial security of your near and dear ones and plan for their better future.
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