Biggest Reasons Behind Life Insurance Claim Denials

Jan 31, 2018 by

A pre-requisite of the life insurance companies while settling claims is the transparency of procedures. These companies advertise about insurance being a hassle-free affair, which shall stand by you in your times of need. But we all know how much the reality differs from this utopian scenario. Rejection of insurance claims is one of the biggest problems which an already troubled person can face. Sometimes it happens because of the error of the insurance company whereas in other cases this is because of ignorance of the policyholder. Filing a claim does not guarantee that you shall be paid on time. The insurance company can sight a wide array of reasons for the non-payment of the claim. Thus, you need to be extra cautious about claim rejection causes before filing claim papers. The most common causes behind the rejection of claims are mentioned below:

  • Non-Disclosure Of Old Policies

Most of the people purchasing more than one insurance policies are not aware of the policy declaration rule and end up unintentionally hiding facts regarding their previous policies from the insurance company. Thus, it is imperative to disclose past policies irrespective of the sum assured as hiding the same could lead to claims rejection.

  • Non-Disclosure Of Medical History

Your overall health graph has a big role to play in the final acceptance or rejection of your claim. Thus, it is of foremost importance to fill in the medical history details with complete transparency and caution. The insurer will make use of the medical statistics to determine the amount of premium and decide whether or not the policy can be issued. Habits such as tobacco and alcohol consumption which are known to have a big role to play in determining your longevity should also be disclosed.

  • Avoidance Of Medical Tests

The underwriter shall assess the risk based on the information supplied and finally issue the policy. It becomes mandatory to undergo certain medical examinations if you opt for a hefty sum assured. The chances of claim rejection heighten if you ignore these tests.

  • Policy Lapse

Filing a claim in regards to a lapsed policy won’t be of any help. You need to pay yearly premiums for maintaining your Term plan. Insurance companies do offer a grace period of a few days, but that should not be taken as an excuse for delaying the premium payment. If the policy does not get renewed within the grace period, the claim shall not be paid by the insurance company.

  • Validity Of Information

You should reveal all the important information pertaining to age, weight, height, income, occupation, etc. to the insurers as hiding the same is bound to get your claim rejected in due course. Certain jobs such as that of a teacher or painter do not bring along life risks. However, working as a firefighter or in a mine may be highly risky in nature. If the insurer is not informed about the same initially, he might reject the claim eventually.

Imagine the grief of losing someone special coupled with the building up stress of upcoming financial liabilities! We bet you don’t want to traverse a route filled with such adversities. So be careful while dealing with your insurance policy and in case if you suspect any foul play on the part of the insurer, seek immediate help of personal injury attorney Henderson.

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