Why Term Insurance Claims Get Rejected?

Why Term Insurance Claims Get Rejected?PolicybazaarAverage Rating / 5 ( reviews)
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Have you ever thought about what will happen if you face rejection while filing a term insurance claim? There would be the emotional grief of losing a family member along with the additional financial burden. You certainly do not want your family members to go through an additional burden in already stressful times. Therefore, as a policyholder, as important as it is to choose a provider with the best claim ratio in term insurance, you should also keep a few points in mind in order to avoid any kind of rejection towards your claim.

Reasons for Claim Rejection

The following points will help you understand the reasons behind a claim being rejected:

Callous Attitude towards Insurance

Often, most of us rush through the insurance buying process. This is due to the lengthy reading procedure and the filling of endless details. Some of us also prefer to get it done through insurance agents in order to minimize our involvement to as little as a signature. However, it is not always ideal to trust the agent with filling all the details perfectly, as they may be missing out on some information.

It is important to make it a point to fill your application form by yourself. You should also keep a copy of it at all times and verify all the details printed. In case of any discrepancy, you should contact the insurance provider at the soonest.

Giving False Information on Your Application

It should be your biggest responsibility to disclose all the relevant information to the insurance provider. If you do not maintain complete transparency and try to hide some information, your claims are exposed to the risk of getting rejected. It is important to give true information on your application form for a smooth term insurance claim settlement.

Nature of Your Job

There are many jobs that do not carry any kind of risk. However, there are also jobs that are high-risk in nature. The nature of your job must be disclosed to the insurance provider before buying the policy so that you do not have any complications in the future while settling your term insurance claim.

Hiding Medical History

The part of your form asking about your medical history holds huge importance when it comes to your claim being accepted or rejected. This is the most important part of the proposal on the basis of which the premium charges are decided.

Avoiding Medical Tests

When you opt for a higher sum assurance, it is compulsory to go undergo certain medical tests. If you avoid these tests, the risk of your term insurance claim being rejected is high.

Policy Lapse

This means that your policy has stopped existing on papers. If you file for a claim for a lapsed policy, your claims will be rejected. It is important to consider the factors that can cause a policy lapse, and avoid them.

Not Disclosing Old Policies

People who hold more than one policy either forget to disclose the old policies or purposely hide it from the provider. Insurance providers are very particular about such declarations.

Conclusion

It is always better to be safe than sorry. It is always the best option to be completely transparent and honest while applying for term insurance, especially at the time of filling your application form. You could get yourself in big trouble if you do not come clear at the time of filling your form. It is not an ideal scenario to let your money and efforts go into waste.

Always remember to give out as much as detail possible while applying for any term insurance so that you do not face any difficulty during the settlement of your term insurance claim.

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