Insurance being an important risk cover to protect your life and your family’s needs in your absence, is useful only if you are able to have an easy and hassle free claim settlement process. However, there are many cases when claims are not settled by insurance companies, which add to the distress and agony you or your family may already be suffering. Let’s look at some cases when your insurance claim may be rejected by the insurance company and what should be done to avoid this:
Incorrect information in the application form: This is one of the most common reasons why an insurance claim may be rejected. Any kind of insurance policy is issued based on the information you provide about yourself in the application form. As the premium you pay is also dependent on this, it becomes an even more critical factor in determining your claims status. As a policyholder, it is your duty to be honest and transparent in all declarations – be it age, income, occupation, lifestyle habits, details of other policies you hold, etc. Information is usually misrepresented either because of fraudulent intentions or due to the difficulty in gathering the facts. Remember to always be truthful and give accurate details, as hiding this can be a potential reason for claim rejections later.
Getting the agent to fill in the application form: Sometimes, incorrect information is given in the form because you do not have the patience to fill it yourself and ask you agent to do so. Remember that the agent is not interested if you will receive the claim benefits at a later date. As a result, he will not take the trouble to ask you details of your family or your medical history. He is only concerned with selling the policy to you and earning his commission. When you trust your agent blindly, you may end up purchasing inappropriate policies or giving incorrect information by mistake. You must therefore remember to read the policy details carefully before purchasing it and also fill in your application form yourself carefully, to avoid claim rejection shocks at a later date.
Medical reasons: Although most insurance policies stress the need for a medical test, many policies do not make this mandatory. A policyholder also usually does not insist on taking a medical test, to avoid hassles and purchase the policy fast. However, it is always better to get a test done by the company’s doctor before buying a policy, in order to rule out pre-existing medical reasons for rejection. Further, there are many medical conditions which do not come up in the routine tests conducted. You must always declare your medical history and also your family’s history, if it is a family floater policy. This includes disclosing your alcohol and tobacco consumption details. This also becomes important as the premium amount is dependent on such declarations. Declaring this upfront will avoid claim rejections at a later date.
Incorrect nominee information: Updating correct nominee details is very important in an insurance policy. When an unmarried person takes a policy, he usually names his parent as the nominee of the policy. After marriage, most people forget to update the spouse’s name as the nominee. This can be risky, as there are chances that on the death of the insured, the parent may also be deceased. Another situation is that if the original nominee dies before the death of the policy holder, another person must be named as the nominee immediately. Although these are simple things to be done, they are often ignored by most people. When you do not update your nominee information correctly and on time, it may be extremely difficult, if not impossible to follow up, complete the legal formalities and get the claim passed in favour of the actual beneficiary.
Lapse of policy: Usually, for all policies, a grace period is granted by the insurance company after the premium due date to pay the premium due. Some people may forget to pay the premium even within the grace period, resulting in a policy lapse. If in such a case, the policy holder dies after the grace period, the claim gets rejected and the beneficiary does not receive the claim benefits. Therefore, remember to pay your premium promptly and avoid claim rejection due to a lapse of policy.
The above are some very common reasons why an insurance claim can get rejected. Remember to act proactively to protect yourself and your family in times of need.
#gettingyourich
Smitha Hari
Team GettingYouRich.com
Incorrect information in the application form: This is one of the most common reasons why an insurance claim may be rejected. Any kind of insurance policy is issued based on the information you provide about yourself in the application form. As the premium you pay is also dependent on this, it becomes an even more critical factor in determining your claims status. As a policyholder, it is your duty to be honest and transparent in all declarations – be it age, income, occupation, lifestyle habits, details of other policies you hold, etc. Information is usually misrepresented either because of fraudulent intentions or due to the difficulty in gathering the facts. Remember to always be truthful and give accurate details, as hiding this can be a potential reason for claim rejections later.
Getting the agent to fill in the application form: Sometimes, incorrect information is given in the form because you do not have the patience to fill it yourself and ask you agent to do so. Remember that the agent is not interested if you will receive the claim benefits at a later date. As a result, he will not take the trouble to ask you details of your family or your medical history. He is only concerned with selling the policy to you and earning his commission. When you trust your agent blindly, you may end up purchasing inappropriate policies or giving incorrect information by mistake. You must therefore remember to read the policy details carefully before purchasing it and also fill in your application form yourself carefully, to avoid claim rejection shocks at a later date.
Medical reasons: Although most insurance policies stress the need for a medical test, many policies do not make this mandatory. A policyholder also usually does not insist on taking a medical test, to avoid hassles and purchase the policy fast. However, it is always better to get a test done by the company’s doctor before buying a policy, in order to rule out pre-existing medical reasons for rejection. Further, there are many medical conditions which do not come up in the routine tests conducted. You must always declare your medical history and also your family’s history, if it is a family floater policy. This includes disclosing your alcohol and tobacco consumption details. This also becomes important as the premium amount is dependent on such declarations. Declaring this upfront will avoid claim rejections at a later date.
Incorrect nominee information: Updating correct nominee details is very important in an insurance policy. When an unmarried person takes a policy, he usually names his parent as the nominee of the policy. After marriage, most people forget to update the spouse’s name as the nominee. This can be risky, as there are chances that on the death of the insured, the parent may also be deceased. Another situation is that if the original nominee dies before the death of the policy holder, another person must be named as the nominee immediately. Although these are simple things to be done, they are often ignored by most people. When you do not update your nominee information correctly and on time, it may be extremely difficult, if not impossible to follow up, complete the legal formalities and get the claim passed in favour of the actual beneficiary.
Lapse of policy: Usually, for all policies, a grace period is granted by the insurance company after the premium due date to pay the premium due. Some people may forget to pay the premium even within the grace period, resulting in a policy lapse. If in such a case, the policy holder dies after the grace period, the claim gets rejected and the beneficiary does not receive the claim benefits. Therefore, remember to pay your premium promptly and avoid claim rejection due to a lapse of policy.
The above are some very common reasons why an insurance claim can get rejected. Remember to act proactively to protect yourself and your family in times of need.
#gettingyourich
Smitha Hari
Team GettingYouRich.com
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