7 Ways To Avoid Life Insurance Claim Rejection

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The objective of purchasing life insurance is to provide financial protection to your loved ones in the unfortunate event of your sudden death. However, if a life insurance death claim is rejected by an insurer, it practically defeats the entire purpose of having a life insurance policy. Claim rejection can happen due to a number of reasons like providing incomplete or incorrect information, non-payment of policy premiums, not disclosing medical facts correctly, etc. Here are some tips which you can keep in mind to avoid having your life insurance claim from getting rejected.

Fill up the proposal form yourself

Many people delegate the job of filling up an insurance application or proposal form to an insurance agent. Now, the agents usually sell insurance policies on set targets in order to earn the maximum commission. It would be foolish to expect the agent to be fully aware of your financial or life situation and can end up providing incorrect or incomplete information on the form. This can prove to be an expensive mistake especially at the time of claim settlement when the insurer will reject your claim due to a discrepancy of information. So, make sure you fill up the application form for an insurance policy yourself to ensure that the information being provided is correct.

Disclose all health-related details

If you have not correctly disclosed your health condition to your insurer, you could stand to lose your claim when the time comes. At the time of applying for the policy, make sure you don’t hold back any health-related details from the insurer, including any pre-existing diseases.

Disclose your family’s medical history

In addition to your own health, you must also ensure to disclose your family’s medical history in order for the insurer to assess the risk associated. This is especially true in the case of a critical or serious illness, which could possibly also affect you in the future. Non-disclosure of this information could lead to the insurer denying not just your claim, but even your application.

Never conceal any information on your proposal form

Your insurance application form, along with your medical test report (wherever required) is the basis on which the insurer will decide your coverage, premiums, and claim. This means that you must provide only correct information regarding various aspects of your life like your income, health status, family’s medical history, pre-existing diseases, lifestyle habits (smoking, alcohol consumption, etc.), existing life insurance policies you hold, etc. At the time of claim settlement, if the insurer finds any discrepancy in the information provided, they will not hesitate to reject your claim.

Never withhold information about pre-existing diseases

Most insurers do not provide cover for pre-existing diseases or provide it on the condition of a waiting period. However, those applicants suffering from a pre-existing medical condition at the time of applying for a policy must clearly state so in the proposal form. If you do not do so, the insurer has enough reason to reject your claim.

Never let your policy lapse

When it comes to insurance claim settlement, companies will not settle claims which have been raised on lapsed policies. To prevent your policy from lapsing, ensure that you make the premium payments on time. If you happen to miss a certain premium payment, make sure that you pay it within the grace period. A lapsed policy is considered null and void, and will effectively not provide any cover.

Update nominee information

When it comes to life insurance, it often happens that nominees can change with time. If you are single and have taken a policy to cover your parents, then it is wise to have your parents as the nominees under the policy. However, when you get married and have to support your spouse and children, then it is wise to have your spouse as the nominee under the policy. This is to ensure that in your absence, your spouse has adequate financial assistance to not only take care of the children but also the other dependent members of the family.

Don’t delay in raising a claim

If a claim has arisen on a life insurance policy, the nominee must make sure to intimate the insurer and file a claim immediately. This is because any delay in filing a claim may cause the insurer to develop a doubt regarding the genuineness of the claim.

These are just a few important, points which one must keep in mind when not only settling a claim but also applying for a policy. Life insurance is one of the most important investments in your financial portfolio which can help secure the future of your loved ones. To ensure that the life insurance policy functions as promised, make sure you take all necessary steps to safeguard your claim.