How to steer clear of Insurance Claim Rejection
Calamities remind us of the fragility of human life but also the importance of safeguarding ourselves against financial uncertainties. A life insurance policy is one such shield to protect and save us from the wrath of disasters like these. But what happens when at the time of unforeseen calamities, a life insurance claim gets rejected? Leaving the family helpless with no ray of hope, the whole purpose of having a life insurance policy gets defeated.
It is therefore critical to prevent your claim from getting rejected so that financial protection for your loved ones in need of the hour is delivered.
Get involved in filling your own life insurance policy proposal form at inception
Buddha quoted and it fits perfectly in this case “work on your own and don’t depend on others”. As one decides to opt for a policy, the first basic step towards it is filing their form. The problem arises when consumers allow their agents to fill their form and while doing so, do not even take the effort of reviewing the final document before it reaches to the life insurance company. While dependency on the agent is common, one must make sure to personally get involved in the form filling process because if wrong information goes into proposal form, which may result in rejection of the claim, the very purpose of buying life insurance to provide protection to the loved ones may get defeated.
Avoid concealment of information
Life insurance policies get issued basis the details you provide while filling the proposal form and policyholders sometimes fail to provide key information when applying for a fresh policy. The three most important things a customer must declare correctly are his financial condition – source of income, his habits/ health condition and any existing life insurance policies to enable the life insurer to decide on the issuance of the policy basis these inputs.
If the life insurer finds that you simply haven’t provided complete information or withheld any information, it may repudiate your claim on the ground of non-disclosure of material facts.
Be mindful of detailing pre-existing ailments
Pre-existing ailments are defined as any ailments that the customer had either as symptoms or was diagnosed and received medical treatment for the same throughout the 48 months prior to the first policy issued by an insurance company. Any kind of pre-existing diseases or any other conditions must be declared upfront and not withheld. If found later, it may restrict you from getting the claim proceeds. You should make sure that you do not conceal any information because it may provide reasons for life insurers to repudiate your claims.
Update nominee details correctly
While incorrect nominee details will not result in a repudiation of the claim, there is a possibility that it may result in a prolonged legal battle between the nominee and heir in case of acrimonious relationship between them. Depending upon changing the life stage you may opt to change your life insurance nominees. For instance, in your singlehood you would have named your parents as nominees but after marriage chances are you may want to make your spouse or children the nominee. It is, therefore, necessary to update the information regarding the nominee from time to time.
Make sure your policy doesn’t lapse
If the premiums are not paid on due dates, the policy may lapse. Life insurers also provide a grace period for the policyholders who fail to pay the premiums by the due date. The life insure may not consider any claim payout under the policy if the customer fails to pay the due premiums by the grace period. Hence it is essential to adhere to the premium payment schedule to avoid repudiation of claims on this ground.
Life insurance is not just a tax-saving tool, it’s a serious financial product which, if used correctly, can be a saving grace for your family and dependents. To ensure a smooth claims process, while most companies provide the help of claims officer who are well-trained, it is equally important to inform your loved ones about the life insurance policies you have bought, contact details of the agent advisor and life insurer and the documents which will be needed to file the claim.
-Written by V Viswanand, Deputy Managing Director, Max Life Insurance
