Most insurance claims take some amount of struggle on the applicant’s part to get them honoured by the insurance company. With multiple conditions and exceptions that come with insurance policies today, the claimant may find it hard to prove the occurrence of an incident or event as per these. The slightest failure in adhering to any of these conditions often results in either no benefit being paid out or only partial payment.
While insurance providers may use legal loopholes and hidden clauses in the insurance policy documents to avoid honouring claims, it is up to the claimant to ensure that there are no flaws in the application itself.
Here, we will discuss some of the most common reasons for insurance claim rejection that should be kept in mind by applicants or claimants while making an insurance claim:
- Insurance claims filed on behalf of insured
Many insurance claimants often hand over the form filling and other formalities to either an advisor or a third party. This can hamper the chances of the insurance claim being passed successfully since the person filling in the details in the claim form may not know all the details. Important information such as the insured’s medical history, financial status, dependents, etc. It is therefore important for a claimant to fill the insurance form by himself or herself. In this process, the claimant can also better understand the life insurance policy and its terms to be well-prepared and informed about the claim process.
- Providing incorrect data in the application
Misinformation in an insurance claim application can deter the chances of having the claim passed. Sometimes, the smallest of details such as age, occupation, income, lifestyle (smoking/drinking), etc., if mentioned incorrectly, can result in an insurance claim being rejected.
It is therefore important to fill in the application form carefully and accurately. Incorrect or incomplete information may be considered fraud and an insurance provider may deny policy benefits on these grounds.
- Not revealing medical history
Disclosure of complete past and present medical conditions, details of surgeries, etc., are essential to be stated while making an insurance claim. This is because such details directly impact the chances of the policy claim being accepted. Certain health conditions like cancer, blood pressure, diabetes, cardiovascular ailments, etc or even a hereditary condition should be stated while taking a policy. This will ensure that any future claims do not get rejected on the grounds that the medical history of the insured was not disclosed.
- Not updating nominee details
In case the life insured meets an untimely death, the benefits are paid out to the beneficiary or nominee. Thus, it is important that the life insured updates the insurance provider about the nominee or beneficiary details. Some of the basic details the insurance provider should be updated include the nominee’s name, address, contact information, etc. In absence of such information, the insurance claim process may face difficulties and could be rejected entirely.
While taking an insurance policy, one must choose the nominee wisely. A married individual may nominate his/her spouse or children. A single individual may nominate his/her parents or other family members. In case one provides nominee details of a minor, it is important to state the guardian details alongside.
- Policy lapse
Insurance providers settle claims only for such policies that are active through regular premium payments. If the life insured misses out on premium payments, the insurance policy may lapse post the grace period. In most annual premium policies, the grace period is up to 30 days. Irrespective of the consistency of premium payments in the past, one missed premium payment can result in a policy lapse.
If you often forget policy premium due dates, try to set up a direct debit facility that will ensure timely premium payment and that the policy does not lapse. In case the policy lapses, you can revive it by making payment of the prescribed dues.
- Delay in claim filing
Every insurance provider has a certain pre-defined time period within which an insurance claim needs to be filed in case the underlying eventuality occurs. This is followed in the strict sense as the claim processing requires some investigations to be conducted in a time-sensitive manner. The insurance provider may, therefore, reject the insurance claim if it is not filed in time.
All genuine claims get settled by insurance providers. By taking note of the above-mentioned points, one can ensure a hassle-free claim settlement process. While choosing an insurance policy, however, one must also consider the claim settlement ratio of the insurance provider. Equally important is for one to understand the insurance policy document thoroughly.
Claim settlement ratio or CSR is the percentage of claims out of the total claims that an insurance company has historically settled per year. It is used by insurance seekers as an indicator of an insurance provider’s credibility. The higher the CSR, the more reliable the insurer is considered.
Insurance plans help in protecting one’s family, assets and self from any financial hardships. With insurance, one can also ensure that any medical emergencies, contraction of illnesses, hospitalisation, and medical treatment are covered in the future.
To buy an insurance policy, one can reach out to a policy agent, a professional corporate agent or even an insurance broker. One can also buy insurance policies directly from the insurance company through their website.
Most life insurance providers require applicants to go through a medical assessment since it helps in determining the possibility and quantum of future claims. The insurance provider will also estimate the premium amount based on any pre-existing medical condition.
Every insurance provider states certain steps to be followed for making insurance claims. This is usually written in the policy document. Alternatively, one can reach out to the insurance provider or look up their website for the claims process. Generally, this involves intimation, document submission, and query answering on part of the claimant.