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Do you get allured when the advertisement says- “no medical tests required” or “buy cheap online life insurance”? If not this way, there are other zillion ways through which life insurance companies attract clients. And, unfortunately many of us do fall under these traps and end up buying life insurance Policy out of sheer temptation without even examining our individual needs. Consequently, there is a sense of disappointment when our insurance Claim gets rejected.
In this article, we are going to study various reasons of life insurance claims denial, but first let us understand what life insurance is.
Life insurance is assurance procured by the Insured from the Insurer that in case of any unfortunate and unforeseen event of insured’s death or at the Maturity of the policy the insured or his Beneficiary respectively would be paid the sum assured.
Insurance Premium are calculated on the basis of the individual’s health state and lifestyle at the time of procuring the life insurance policy. If the person is suffering from any disease or health condition, the insurer will charge the higher premium as compared to the person who is not diagnosed with any health condition. However, many people for the same reason try to conceal their health condition either to reduce the amount of their premium or to get that desired coverage. But, they do not understand that if they are caught doing the same, their claim may get rejected.
There are facts like individual’s habit of smoking or drinking or any thing that is related to person’s health may cause the premium to rise. Next thing is where the person is working or living. If his workplace or living space is associated to something which can create Risk for life, premium rises. Then there is health condition that the person was suffering from years before applying for the life insurance or if he was hospitalized due to any reason even if it was due to accident, everything has to be specified to the insurance company.
Claim settlement is not an easy task as life insurance companies in India have their own ways to unveil the truth. If any of these concealed facts get disclosed, the insurance company has the right to deny your claim.
This was all about life insurance claims that are rejected due to concealing the facts knowingly, but the cases have come into the light when the insured genuinely does not know about his health condition, even then the claim gets rejected on the ground that the vital fact was hidden. However, if insurance company is conducting the medical test and there is no trace of any ill health and if the insured dies due to ill health, insurance company cannot deny the claim.
Mostly the claims that are raised under the period of 2 years of purchasing the policy are rejected. The reason being, these cases signal high possibilities of fraud and therefore are scrutinized to the minute details.
There are various Exclusions to life insurance policy like HIV, cancer, suicide and many more. If the insured dies due to any of the reasons defined in exclusions, insurance company can deny the claim.
This generally happens in case the Policyholder does not pay premium on time or regularly, his policy gets lapsed in no time and hence his death claim gets rejected.