This applies to not just term insurance but any type of life insurance. So read on… they can be very crucial.
but any type of life insurance. So read on… they can be very crucial.
Claims do get rejected and it can be quite painful when it happens. Worse, if you are not there at that time, it can have serious financial implications for your family. So listed below are some of the main reasons why life insurance claims get rejected.
Details incorrectly entered in the application form
You are expected to fill in all details accurately. When you are taking a life cover for your family, give it that seriousness and fill out the application form correctly. Do not try to hide facts – assume they will be found out by the insurer at a later point in time. Some of the usual information which insurers seek are:
- Your health details
- Your family’s health details
- Your income
- Your occupation
- Your education
- Your existing policy details
Take the time to input these correctly. These are more important than you think they are.
Someone else filling up the application form
This is the silliest and more often repeated mistake. Most often happens with insurance agents. You find the form too long and just sign off on an empty application form. Now, the agent does not want the application to be rejected to enter all details which match the underwriting requirements. Boom, designed for disaster! Don’t be surprised if claims are rejected.
You have to pay your premiums on time. Don’t ever forget to do that. All benefits can vanish if you have not paid up on or before the renewal date. Insurance companies offer a grace period too after the renewal date – don’t wait for that date.
Also in some special circumstances where death is due to participation in some illegal activity may result in your claim not being honored – death due to drunken driving for example.
Non-disclosure of correct information in the application form is clearly the biggest reason for claims being rejected.