Your health or life insurance document enumerates the terms and conditions of the policy contract. Strictly adhere to these to avoid any claim rejection
By B R Singh
We buy insurance expecting claims to be paid when some unfortunate and unexpected incident takes place. However, when a claim is rejected, it is frustrating, expensive and disappointing. Let us examine why some claims get rejected.
Life insurance aims to provide financial protection for the bereaved family in case of an insured person’s unfortunate demise during the term of the policy. Here are some of the key aspects to keep in mind in order to ensure that your claim doesn’t get rejected.
Fill the application form yourself: At the time of purchasing insurance, always fill in the proposal or application form yourself. You should ensure that your insurance provider know all the material facts about you. Disclose all the facts without hiding anything.
Avoid delay in filing claims: It may not be uppermost in your mind in a medical emergency, but it would be advisable to give a trusted friend or relative your insurance information to call and inform the insurance company if you are not able to send an intimation yourself. As per the insurance contract, the insurance company needs to be kept informed about the occurrences for which a claim may be reported to them.
Medical examinations:Insurance companies may sponsor medical tests to get a better understanding of the medical condition of a prospective buyer. These tests may also help the insured detect diseases early and treat them accordingly.
Examine policy document carefully:Always read your policy document to check whether it is in line with your needs. There may be a possibility that the insurance company has incorporated a wrong detail by mistake and hence it would be prudent to check the policy document thoroughly immediately on receipt.
Avoid wrong disclosure of facts: You should fill in important details such as age, income, occupation, lifestyle (smoking/ drinking), details of previous/other existing policies, claims taken if any, and other information in the proposal form correctly. Any incorrect information is considered “material misrepresentation”. According to insurance contracts only material misrepresentations (those facts that influence underwriting decision) can result in a policy cancellation. However, many insurance companies have a tendency to deny a valid claim even if a misrepresentation/non-disclosure in the proposal form is not material.
Pay premium timely: Insurance companies often use non-payment of premium as a reason to deny a claim. Insured or beneficiary has the right to know whether the insurance company sent ‘premium-due notices’ to the correct address and whether the notice clearly warned the insured of the impending lapse.
Ensure that beneficiary/nominee is mentioned: On the death of the assured, the benefits are paid to the nominee or the beneficiary. It is, therefore, in the interest of the insured to keep the insurance provider updated about the details (address, contact number, etc.). When a beneficiary is not named, claims may result in inordinate delays or rejection.
The policy holder should take the following precautions to avoid rejection of health insurance claims.
Furnish correct information in proposal form: Any wrong information like age, annual income, lifestyle, medical history, etc., may lead to rejection of the claim and also termination of the policy. Most insurers do not cover pre-existing diseases and hence asking for a claim in respect of PED will be a waste of time and effort.
Ensure timely renewal of policy: It is important to renew the policy annually before the deadline. Even if an insured is admitted in the hospital only a day later (after the date of expiry), he/she is not entitled to claim.
Intimate insurer within stipulated time: Most health insurance policies clearly mention that the insurer must be intimated within 24 (or in some cases 48) hours of hospitalisation, if a claim is to be registered. It is always prudent to take the policy from an insurer who is readily accessible 24×7 to the policy holders and so that insured can comply with this condition.
Be aware of exclusion list: Exclusion list mentions all the cases and situation not covered under policy. Before making a claim under a health insurance policy, it is advisable to go through the list carefully.
The writer is assistant professor, Amity School of Insurance, Banking and Actuarial Science