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Term Insurance Claims – Make Sure Your Claims Are Never Rejected

Term insurance plans in India are very helpful. However, how to prevent your insurance claim from being turned down? Learn more here.

  • 3,278 Views | Updated on: May 31, 2024

    Key takeaways

    Ensure That Your Term Insurance Claims Are Never Rejected

  • Don’t lie or provide incomplete information in the application form
  • Pay the premiums diligently on time
  • Provide nominee information
  • Avoid delay in claim filing
  • Fill out the insurance application form yourself
  • Thoroughly read the policy’s fine print

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 befall 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 of not mentioning details of your health or any health condition in your application form may have a significant impact later.

While filling out the insurance application form, ensure 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 rest assured, your claim will be honored.

2. Pay the premiums diligently on time

The insurance companies honor the term policy claim applications only if the policy is active. Many people who purchase term policies 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.

5. Fill out the insurance application form yourself

You should always complete the insurance application form. Although insurance brokers may offer to fill out your information for you, it is advisable to do this yourself since it allows you to verify that the correct information has been provided to the insurer.

The fact that the information on file with the insurer does not match the accurate information regarding the policyholder’s health or even specifics about the dependant nominees is a major factor in insurance claims being denied. Due to online applications that provide improved convenience for policyholders, it is now much simpler to fill out the insurance details yourself.

6. Understand the claim process

Don’t waste time

Call the insurer as soon as you can to alert them of the situation and submit the claim. If you have an online term plan, ask the support desk for help with the necessary paperwork.

Inform the agent of the circumstance and ask for assistance when filing a claim if you purchased the policy from an agent.

Get the documents in order

You will be asked to produce specific papers as you inform the insurance so that the claim may be processed. You will be provided with a list of the papers. Documents include:

1.The record of death

2.Original docs for a term plan

3.Candidate IDs

4.Bank information

5.Proof of address, etc

Original documentation must be provided to submit your claim.

Payout

The organization will require up to 90 days to process the paperwork and resolve the claim when the formalities are finished.

Looking at the claim settlement ratio is one method for assessing an insurer’s quality. The insurer is better if the number is higher.

Your family can avoid the inconveniences of claim denial or delay by taking prompt action.

Conclusion

Term life insurance policies offer a variety of advantages and ought to be taken into account depending on personal needs. High claim settlement ratio insurers guarantee quality service and ongoing association advantages. Starting with some of the above-mentioned procedures will help you have a pleasant claim settlement process. This guarantees that the procedure runs smoothly when necessary and that the payout can be rapidly distributed, making it easily usable.

FAQ

1

Are you buying a term plan with a return of premium?

If the policyholder survives the term of the policy, they will be eligible for a return of the premium amounts under a term plan with a return of premium option. In the event of the policyholder’s passing, TROP also provides death benefits to their designated beneficiary.

2

How to save money on tax if you pay for the term life insurance plan?

Unlike permanent life insurance policies, such as whole life insurance or universal life insurance, term life insurance policies do not build cash value over time. Instead, they are pure insurance policies that provide coverage for a specific period of time. If the insured person outlives the policy term, the policy will expire, and no benefits will be paid out.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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