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7 Ways to Avoid Life Insurance Claim Rejection

A small mistake from your end can end in the insurance company refusing to pay the nominee the claim. Hence, know the seven ways which you can follow in order to ensure that your loved ones do not see their claim getting rejected.
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More often than not, getting claims honoured by life insurance companies is an uphill battle. There are so many clauses, conditions and exceptions in insurance policies today that people are expected to fall ill by contracting a specific disease under specific conditions at a specific time in the day and inform the insurer at a specific time through a specific channel, and only if you’re under a specific insurance plan. Failure to meet any of these conditions would result in no insurance benefit being paid out, and the company being legally allowed to tell your dependants to take a hike.

Most often, insurers rely on legal loopholes and clauses in their policy documents to avoid making payments of sums assured, but a surprisingly large number of times, the fault and blame belongs to the customers themselves.

Here are seven things you as a customer can do to ensure that you always get paid what’s due to you by your life insurance provider.

  1. Don’t conceal information.

    Literally any bit of information you don’t (or forget to) tell the life insurance company which can have an impact on your health, or result in any medical condition that requires hospitalization or the payment of death benefit is considered as “concealment of information”. Any disease or ailment requiring you to make a life insurance claim will be tracked back and traced to anything in your application form that indicates that this disease or ailment was a possibility. Any pre-existing disease or condition or smoking/drinking habits or anything that can be linked as being a cause to your hospitalization or death will be investigated and, if you haven’t told the company about it, sum assured and other benefits will not be given to you or your dependants. Your premiums are decided on this information, so be clear and open while furnishing it. If there is nothing that you’ve concealed, there’s nothing that can be held against you and the insurer will have to pay your sum assured.

  2. Pay your premiums on time.

    Insurers will only settle claims on active insurance policies. There are an astonishing number of people who do not understand that delaying premium payments result in lapsed policies. Once your policy lapses, you are no longer covered and all your premiums paid that far will be rendered useless. The premiums will neither be returned to you nor will they have any legal validity to ensure that you or your dependants get your sum assured or death benefit from the company. In some cases, delaying your payments could also lead to penalty charges and reinstatement charges. Also, if you have a clean track history of making premium payments, the insurer will have one less point to haggle over when it comes time for a settlement.

  3. Update nominee information.

    Your named nominee is the person who will receive any and all benefits that come out of your insurance policy, when the time comes. If you’re single, naming your parents as nominees would be the sensible way to go. Once you’re married, name your spouse and children. Whatever your present relationship status is, always keep a nominee named so that some benefit will go to some dependant of yours somewhere. Nominees are generally those whose livelihoods are directly dependant on you being alive and well.

  4. Don’t delay in filing insurance claims.

    It may be the last thing on your mind in a medical emergency, but a quick call to your insurance company could spell the difference between having or losing insurance cover. It’s a good idea to give a trusted friend, colleague or relative your emergency insurance information to call and intimate the insurance company in case you are unable to do so yourself. Basically, the life insurance company needs to be kept posted about the events for which they will be held financially liable later. The sooner you intimate the company about whatever has happened that requires medical attention, the easier your claim processing will be. Insurers also consider delays in intimation of hospitalization as indicators of potential fraud. Timely intimation can also keep you clear of this accusation.

  5. Fill out your insurance application form yourself.

    Do not trust that well dressed, constantly smiling, and question-avoiding insurance agent with the responsibility of filling out your forms. Insurers decide your premium payment amount, overall coverage, and even some exclusions based on what’s filled out in your forms. Merely telling the insurance agent everything about your medical history will not qualify him to understand and explain on the form the more difficult intricacies of your medical history. You will need to take the time out of your day and get your records in order and truthfully fill out all the details in the forms by yourself. No one knows you better than you, and you need to make sure the insurance provider knows, too. Withholding tobacco and alcohol consumption habits will be a problem if the reason you’re hospitalized can be traced back to alcohol or tobacco consumption. Agents fill forms fast to meet sales targets, and couldn’t care less what becomes of you in the future. Is that a person you want to trust with potentially huge amounts of money that could become due to your dependants in their most dire times of need?

  6. Accept medical examinations.

    Insurance companies sponsor your medical tests and examinations to get a better understanding of your medical condition. The more they know, the less they can say was withheld as a reason to avoid giving you your sum assured that’s due. These tests may also help you detect diseases early, and treat them accordingly. This is most common for health insurance policies, but can be important for life insurance policies also, giving the hospitals and life insurance companies a good idea of your present health condition, to see where it may go in the future.

  7. Thoroughly scrutinize the policy document:

    One of the primary reasons the policy document even exists is to release the company from any legal and financial liability that could arise out of signing a contract with you. If you contract an illness, randomly drop dead, or require an insurance claim because of any of the reasons in the “exceptions” list, you can say goodbye to your hopes of receiving any kind of benefit from the insurance company. Clauses such as the exceptions list that indemnifies the insurer from any kind of liability towards you exist all over your policy document. It is important to diligently and thoroughly dissect your policy document to ensure that none of the clauses mentioned therein are a possibility. And if they are, you can probably re-negotiate your policy document with your insurer. If your insurer doesn’t budge on clauses and conditions, there is no shortage of insurance companies out there that would love to have you as a customer. It is important to note that most insurers will not budge on exceptions, but may allow wiggle room on certain conditions.

Keep yourself informed and abreast of all developments with your insurer. Keep yourself informed about the details in your policy document. Stay diligent and well informed about the conditions under which you will be eligible for a claim. Life insurance is not just a tax saving tool, it’s a serious financial product which, if used correctly, can be a saving grace for your family and dependants.

7 Ways to Avoid Life Insurance Claim Rejection Reviews

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  • LIC Life Insurance
    "Must policy for every Indian"
    0.5 5.0/5 "Blown Away!"
    LIC is a very good policy in India. I cannot compared the LIC company with any other company in terms of best services and the claim ratio. After the maturity, in the same day the amount will be credited in my account and i don't need to contact anyone. They are providing all of kind of policy which suits for all kind of aged people thats the beauty of LIC.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Jan 18, 2019
  • LIC Life Insurance
    "Good benefit"
    0.5 5.0/5 "Blown Away!"
    My life insurance policy was taken with LIC. The payment option is very good. I can make the payment through online banking, credit card, cash and cheque. In 2017, i have purchased this policy. Total term period of the policy is 21 years. I'm satisfied with the sum assured amount. Since its a reputed company and claim process is easy hence i have selected Life Insurance Corporation of India.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
  • Aegon Life Life Insurance
    "Good Guidance in their office"
    0.5 5.0/5 "Blown Away!"
    I went to their regional office and i have purchased my term insurance. I have selected the Aegon company because their claim ratio is really good and they have explained the term and conditions properly. I'm satisfied with the coverage value.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 03, 2019
  • LIC Life Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I took this Life insurance Money back policy from Lic insurance company mainly , Its been always safer side as this insurance company belongs to govt . I make the payment through online banking where the amounts get auto debited . I have taken this policy for good returns where i can claim every 5 years.
    Was this review helpful? 1
    , new delhi
    Reviewed on Jan 03, 2019
  • LIC Life Insurance
    "Difficult to claim"
    0.5 2.0/5 "Expected more"
    10 years my life insurance policy from LIFE INSURANCE CORPORATION OF INDIA. For the tax benefits i have purchased this policy. To get the claim from LIC, its a difficult process. This is a tedious one. I have been paying the premium amount of Rs. 10000 every year.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 03, 2019
  • LIC Life Insurance
    "Good for India"
    0.5 5.0/5 "Blown Away!"
    Reason to chose the LIC its for tax benefits savings, I can claim the tax benefits through my company. I make the premium amount through corporate they deducts from the claim. The policy coverage is good with the life coverage. I would say LIC is number one in India.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 03, 2019
  • Max Life Insurance
    "Okay Policy"
    0.5 4.0/5 "Great!"
    I have purchased a term insurance policy from MAX LIFE. I have selected the MAX company because they have higher rating on their claim ratio. I'm really happy about the sum assured amount. Total tenure period is fine. In 2015, i have purchased this policy. I'm really satisfied with the services.
    Was this review helpful? 1
    , new delhi
    Reviewed on Jan 03, 2019
  • Max Life Insurance
    "They are good in market"
    0.5 2.0/5 "Expected more"
    I have purchased a life insurance policy in 2012 from Max life. Because of my boss recommendation and reputation of the company, i find the claim ratio was very good hence i chosen same. Max life premium is slight costlier than other. The customers are completely satisfied with their services. They have class set of policies according the premium amount.
    Was this review helpful? 1
    , mumbai
    Reviewed on Dec 29, 2018
  • ICICI Prudential Life Insurance
    "One must have some term plan"
    0.5 5.0/5 "Blown Away!"
    Their application process was so fantastic. The documentation was fine and i have done everything through online. Since because of the brand value, i have selected the ICICI prudential for my term insurance. The claim ratio is very high which is98.3%. I have selected the premium is a accelerated one. First I have to pay the premium upto 10 years and it will cover next 34 years. I have selected the coverage value of Rs. 1 Cr upto 65 years. I pay the premium amount of Rs. 2311.
    Was this review helpful? 1
    , mumbai
    Reviewed on Dec 29, 2018
  • Bharti Axa Life Life Insurance
    "Good service"
    0.5 4.0/5 "Great!"
    I have taken my Two wheeler insurance with Bharati axia , there service is good, while applying through insurance there agent had explain me clearly, about there service , so far there is no claim yet, i use to pay through on line.
    Was this review helpful? 1
    , chennai
    Reviewed on Dec 27, 2018
  • LIC Life Insurance
    "Good policy"
    0.5 4.0/5 "Great!"
    I took this Life insurance Money back policy from Lic insurance company mainly , Its been always safer side as this insurance company belongs to govt . I make the payment through online banking where the amounts get auto debited . I have taken this policy for good returns where i can claim every 5 years.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 16, 2018
  • Bajaj Allianz Life Life Insurance
    "Safe plan for future"
    0.5 5.0/5 "Blown Away!"
    I have life insurance with Bajaj Allianz, I used to pay Rs. 12,000 for one year policy, it has the tenure of 40 years, Its a totally term plan for the value of 1 crore, they give lump sump amount to the nominees, the claim ratio is good and also terminal waiver on premium.
    Was this review helpful? 1
    , pune
    Reviewed on Dec 14, 2018
  • Bajaj Allianz Life Life Insurance
    "Not recommendable company"
    0.5 3.0/5 "Satisfactory"
    I have got a poor customer care service in Bajaj. I won't get any proper reply from them. They were helpful till i taken the policy from them. I have purchased the policy 2 years before. One of my relative has recommended me about the term insurance policy. I'm not sure about the claim ratio of this company.
    Was this review helpful? 0
    , vellore
    Reviewed on Dec 04, 2018
  • LIC Life Insurance
    "Looking for better benefits"
    0.5 5.0/5 "Blown Away!"
    I like LIC, I just paying the premium I have not experience yet, My friend is an agent through him I took the policy. I make the premium around Rs. 1 lakh for 16 policies, has tax benefits and life coverage they have good claim settlement, benefits are low, they need to increase the benefits.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 03, 2018
  • LIC Life Insurance
    "Good Policy"
    0.5 3.0/5 "Satisfactory"
    I have a life insurance policy with LIC from last 4 years and it is a long term policy. I get no claim bonus in this policy. I make my payments through cheque every 6 months. This policy is for Rs 5 lacs and at the end of tenure period i will get Rs 15 lacs. Tenure period for this policy is 15 years.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 03, 2018
  • LIC Life Insurance
    "Good Life coverage policy"
    0.5 4.0/5 "Great!"
    The reason to chose LIC, its reliable and safe and its convenient to approach the claim. The trust one it does not have any documentation charges its quite convenient. I have Jeeven Anand plan, they give life cover even after matured period.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 03, 2018
  • Tata AIA Life Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I never been touch with TATA AIG people. I just took the policy through online with the link of HDFC. I have selected the TATA AIG because including most of the case of the death in including in the policy. Their claim settlement ratio also good. I have been paying the premium Rs. 10000 annually. Total coverage amount of Rs, 1 Cr. Total tenure period of the policy is 40 years. Tax benefits policy.
    Was this review helpful? 1
    , mumbai
    Reviewed on Nov 23, 2018
  • Kotak Life Life Insurance
    "Recommendbale term life"
    0.5 5.0/5 "Blown Away!"
    Its one of the best policy with Kotak Mahindra on my term plan, it has low cost with better benefits. For any incident they are providing life cover and they have good claim settlement and renewal. Premium I used to pay around Rs. 12,500 it has term of 24 years for 1 crore coverage.
    Was this review helpful? 0
    , bangalore
    Reviewed on Nov 17, 2018
  • SBI Life Life Insurance
    "Satisfied policy. "
    0.5 4.0/5 "Great!"
    I have got my accidental covered life insurance policy with SBI LIFE. I used to pay the premium amount of Rs. 1000 per annum. I used to make the premium through my account. They have given me a claim amount of Rs. 20 lakhs. I have purchased this policy only for me and i have to renew the policy every year. 3 months back, i had renew the policy.
    Was this review helpful? 1
    , bangalore
    Reviewed on Nov 13, 2018
  • review Life Insurance
    "Excellent service"
    0.5 5.0/5 "Blown Away!"
    I have been applied for my Health insurance with Indusind bank , till now i have not use claim yet, and they have charge me premium amount 3000 rupees, i usually do my insurance payment with credit card or pay app, and there customer support team is good.
    Was this review helpful? 1
    , gurgaon
    Reviewed on Oct 30, 2018
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