What are some of the Reasons for Rejection of Term Insurance Claims?
Term insurance is the simplest form of life insurance. It helps families to stay financially afloat after the death of the earning member of the family. A term insurance provides financial protection to your family at the most reasonable rates. The benefit amount is paid out to the nominee in case of death of the person insured during the term of the policy. However, you must be careful while taking up a term insurance and understand the terms and conditions as incorrect or false information might result in rejection of your term insurance when needed.
Some of the main reasons for the rejection of term insurance policy include:
Incorrect Information in the Application Form
Disclosure of previous and existing medical conditions, operations, surgeries, etc., is compulsory as it influences the policy premium. While taking a term insurance policy, the applicant must disclose their lifestyle habits, smoking habits, age, profession, medical condition, pre-existing illness and all other important facts. Disclosing all relevant information may increase your premium amount, but believe this,it is a better choice than hiding all such information.
Updating nominee details
It is important to keep the insurance company updated about the details of the nominee, like their address, contact information, etc. Note that the claim may get rejected if the nominee dies due to some reason and your policy does not have any other nominee information.
The applicant is asked to undergo a medical test before the plan is purchased. With this, the insurance company gets to know your health and based on this, the premium and other conditions are decided. If the applicant already has a disease or is intoxicated, then in this case a higher premium is charged.
Not Disclosing Existing Insurance Policies
You must disclose all your existing life insurance policies (details like the name of the insurer, the sum assured, and policy number) while buying a new life insurance plan. Hiding such facts can result in rejection of your insurance claims.
To understand other reasons where the claim could be rejected, get a copy of the November 2020 Consumer VOICE English magazine today!