Term insurance is known to offer financial security to your family, especially in your absence. But what if the claims made on the policy for the compensation are rejected? It is quite scary to think that you have done everything right to protect your loved ones financially after your death, and they end up losing the benefits due to claim rejection.
So, what do you think might go wrong? In this section, we will be discussing the reasons for term insurance claim rejection in detail, along with the ways to avoid it. Let us begin.
Claiming for things that your policy does not cover is one of the most common reasons for claim rejection. Hence, it is essential to be well versed with the term insurance exclusions before buying the policy and when making a claim on it.
Some of the most common term insurance exclusions are as follows –
Apart from claiming for things not covered under your term insurance plans, there are a few other reasons for claim rejection as well. Here, take a look –
At times, people forget or provide inaccurate information when buying term insurance plans in India. This practice has proven to be detrimental to claims made on the policy in the near future. Details such as age, income, professional details, qualifications, lifestyle habits, etc. need to be mentioned correctly.
These factors help the insurer determine your policy premiums. Any inaccuracy in the information provided can constitute fraud and lead to losing the policy benefits in times of need.
It is mandatory to undergo a medical examination when applying for term insurance in India. Failing to disclose any previous/existing health conditions can cause issues in the future. Here, it is also mandatory to mention lifestyle habits such as smoking and drinking. Having these details mentioned in the policy application will help make the claim process easier in the end.
In term insurance, the death benefits are paid to the beneficiaries of the policy. Hence, it is necessary to enlist nominee details such as their name, address, contact information, etc. when buying the policy. Having no beneficiaries mentioned in the policy can cause trouble during the payout and can lead to claim rejections as well.
Note that term insurance claims are settled for active policies only. No benefits are received in case the policy matures. Similarly, if you skipped paying the premiums (even after the grace period), the policy lapses. In such a situation, the previously paid premiums go to waste, and no benefits are received. Hence, it is wise to pay premiums on time so that the policy does not lapse. However, to understand the process of reviving the lapsed term policy, get in touch with your insurer.
When buying any life insurance product, it is best to reveal all the existing insurance policy details. At times, people forget to mention these details or conceal facts only to realise that it can result in claim rejection in the future.
The following are the list of things you can do to avoid getting your claims rejected-
You should not be afraid of claim rejections in term insurance, especially if you have provided accurate information to the insurer. Also, know that term insurance offers more than just financial security to your loved ones upon your death. You can enhance the scope of the policy with rider benefits such as critical illness cover, return of premium cover, accidental death cover, and more.
Are you looking for a term insurance plan in India?
Consider buying Term Insurance at Finserv MARKETS online. You can benefit from features such as affordable premiums, bespoke plans to suit your needs, extensive coverage, hassle-free claim settlements, rider benefits, and so much more.
So, secure the financial future of your loved ones with term plans at Finserv MARKETS, right away!