The real test of the benefit of a life insurance comes at the time of filing for claims. Rejection of claim by the insurance company can be a huge hit for the nominee who is filing death benefit claims after passing away of the proposer.
What are the common grounds on which insurance companies reject claims? What percautions should you take to ensure that claims are honoured when you, the policyholder, are not around? And in case of rejection of claims, what are the steps the nominee in the policy should take?
The biggest reason for claims rejection is incorrect or insufficient disclosures by the policyholder at the time of purchasing the policy. “Typically, life insurance claims can be rejected in case the insured fail to make full disclosure at the time of purchasing the policy. In addition to this, insurance companies won’t be liable to pay in case of lapsed insurance policy,” Tarun Mathur, Head of Life Insurance, Policybazaar.com, told FeMoney.
Mathur also suggests taking care filing filing for claims. “While filling up the claims form one should ensure all details are correct, along with all corroborating reports,” He said.
Mahavir Chopra, Director, Health, Life and Strategic Initiatives, Coverfox.com, advises insurance customers to not be casual while buying a life cover. “Ignorance and incorrect declaration of facts while buying/renewing insurance are the two biggest reasons why claims are rejected in general insurance. Customers do not fill their proposal forms themselves or fill them casually without understanding the repercussions of making an incorrect or incomplete declaration. We should not delegate filling of forms to agents, which can be reason for unpleasant surprises later,” Chopra said.
Also, proposer should apply enough diligence at the time of buying the policy and ensure he reads the terms and conditions in detail. “As far as possible, ensure you read and fill the proposal form completely. Strike of all sections that are not applicable, and not leave any field blank. In case there are loose sheets of proposal forms ensure you sign on each page,” says Chopra.