How to Ensure That Your Term Insurance Claims Are Never Rejected?

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How to Ensure That Your Term Insurance Claims Are Never Rejected?

Term Insurance Quote
  • 26th Nov 2021
  • 267

How to Ensure That Your Term Insurance Claims Are Never Rejected?

A life insurance policy is necessary for all as it helps you protect your family’s financial well-being even in your absence. While different types of life insurance plans are available in the market, term policy remains particularly popular. This is because it is one of the most uncomplicated plans and has an affordable premium.

Term insurance is a pure protection policy that only offers death benefits to the policyholder’s family upon their demise during the policy term. However, the claim submitted by your family can get rejected on several grounds, which are easily avoidable.

While buying a policy, many people tend to make amateur mistakes, which leads to claim rejections. While you are gone and your family is grieving your loss, the last thing you would want them to face is not getting the policy benefits.

Fortunately, you can avoid such unpleasant situations befalling your family by being more vigilant during the buying process and avoiding the common mistakes discussed below.

1. Don’t lie or provide incomplete information in the application form

Concealing information’ or ‘non-disclosure of information ‘is one of the most common reasons insurance companies reject the term insurance claim requests. Even a small mistake not mentioning details of your health or any health condition in your application form may have a significant impact later.

So, while filling the insurance application form, make sure that you furnish details about your pre-existing condition and lifestyle habits like smoking or alcohol consumption. Your premiums are decided based on the information you provide, and if there is nothing you have concealed, there is nothing that the insurance company can hold against you and rest assured your claim will be honoured.

2. Pay the premiums diligently on time

The insurance companies honour the term policy claim applications only if the policy is active. Many people who purchase term policy fail to pay the premium on time, resulting in lapsed policies.

The insurance company will neither return the amount paid, nor will you have any legal validity to ensure that your family members get the death benefit. So, to avoid rejection of your term insurance claim, make sure that you pay the premium diligently on time.

3. Provide nominee information

It may be surprising that many term insurance buyers fail to provide nominee details in the application form. Without mentioning the nominee’s name, and relationship, the nominee may not get the sum assured.

If you are single, you can mention either your parent’s name as the nominee or both. You can also define the percentage of the sum assured to be forwarded to each nominee. It can be either in the 50:50 ratio or any ratio as you deem fit.

Whoever you want to choose as the nominee, make sure that you provide details of the same in your insurance application form so that the insurance company pays them the death benefit when the time comes.

4. Avoid delay in claim filing

Another reason why many term insurance claims are rejected is that people delay filing the claim. It is a good idea to instruct your family members about the importance of filing the claim at the earliest after the demise. You can give the responsibility to a trusted friend or a relative to initiate the filing claiming process; all it takes is informing the insurance company about the death and submitting the claim request form.

Timely action can save your family from the hassles of delay in claim settlement or claim rejection.

- A Consumer Education Initiative series by Kotak Life

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