Common Reasons Why Term Insurance Claims Get Rejected
Mumbai, March 25, 2021
You may have come across advertisements related to term plans with a sum assured of INR 1 crore at pocket-friendly rates. You may feel that such a sum is adequate for your family to maintain their standard of living. However, do not invest in it without understating the actual term insurance meaning.
Many of you might have already purchased a term plan without even calculating the sum assured. However, will the life cover be able to cater to your family's financial requirements in your absence? It is a big question that you need to answer. Additionally, you also have to consider the reasons why term insurance claims get rejected.
The purpose of purchasing your term plan will be diminished if your family has to run from pillar to post to get the death benefit. You need to think about how your loved ones will cope with the emotional and financial loss if the insurer denies their claim during your absence. Therefore, before buying an online term policy, find out about the instances wherein your nominee’s claim may get rejected.
Reasons for claim rejection
Here are reasons why the insurer may deny the claim:
When you give them incorrect information
You need to share all the details about yourself accurately to ensure that your nominee has a hassle-free claim procedure. Hiding any information indicates you are not abiding by the norms related to term insurance policies. This can create problems for your family members during the claim settlement process. Make sure to give correct and authentic information regarding age, weight, occupation, and lifestyle habits. Moreover, if you forget to update information about the nominee, problems can occur during your absence.
When you do not disclose your medical history
Not disclosing any information about your pre-existing medical condition may become a big reason for claim rejection. If the insurer finds that your untimely absence happened due to any pre-existing medical condition, which was not disclosed while purchasing the term plan, they can reject your nominee’s claim.
When you ignore medical tests
When you pick the policy with a higher sum assured, a medical test is mandatory. The insurance company itself can perform these tests, or you may be asked to submit the required medical report. If you refrain from doing these tests, your family may face obstacles during the claim settlement process.
When one forgets to pay premiums on time
Policy lapse may lead to a claim rejection. Therefore, the family of the deceased person may not receive any support from the insurance company. So, make sure that you are paying timely premiums before the due date. Do not worry if, due to any reason, you forget to pay on time.
Every insurance company offers a grace period within which you can pay the premiums. While purchasing a term plan you can use the term plan premium calculator to ascertain the premium that you will need to pay throughout the policy tenure.
When the policyholder’s death does not meet the policy’s clauses
If the reason for the policyholder’s demise is against the terms and conditions of a term plan, the insurer may dismiss the claim. For instance, if the policyholder did not die a natural death but was murdered, the insurer will not pay the death benefit to his or her family.
Your family's happiness is everything for you. Currently, you are ready to fulfill their monetary needs. However, life is uncertain, and you cannot foresee the future. So, you should make a well-informed decision to ensure that your family leads a stress-free and peaceful life in your absence.
Now, when you are aware of the term insurance meaning and its importance, it is advisable to invest in an ideal plan without any delay. You can use the term plan premium calculator to compare the costs of different policies and invest in a suitable one.
(Disclaimer: This is branded content. Readers are advised to exercise due diligence and discretion before entering into any correspondence, investment, purchase, business dealings or any other decision on the basis of this content.)