It would be embarrassing moment for the family if the insurance claim got rejected after the death of earning member in the family. Sakthy, a factory worker in Bangalore did not know that his family would suffer because of his mistake in taking the insurance policy by hiding few important details about his health and nature of work to the insurance company. This is the case for many rejected claims in the recent days. If you are taking the insurance to cover your family, make sure that family would get the money after your dismal.
Nowadays growing number of rejected claims reported by the IRDA. According to the data, of the 7.62 lakh life insurance claims filed in 2009-10, nearly 15000 were rejected by insurers. The percentage of rejecting is very high with private companies. LIC has the very less percentage of the claims rejections in the report. But, if you look into the reason for the major number of rejected claims are because of the wrong information given to insurers. This article explores the reasons to reject the claims and what are the things to keep in mind while taking the insurance policy. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.
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Why the insurance claims are rejected?
The following are the main reasons for the claims to be rejected from the insurers side :
Early Death
If the policy holder dies within two years of taking the policy. Insurance company will probe the case closely. It would take six months.
Non-disclosure of health conditions
If the insurer thinks that policy holder deliberately hide his health problem, then the claim can be rejected.
Non-divulgence of family medical history
If the relatives suffer from a hereditary disease and it is not mentioned in the application form at the time of buying the insurance, the claim can be rejected.
Details of work nature
There are specific jobs which carry high risk for the life like working in mine, etc. The nature of job must be revealed to the insurer before buying the insurance policy. If the insurer thinks it is hidden from them, the claim can be rejected.
Over insurance
When you are buying a new insurance policy, you must reveal your total income and other insurance policies in your name. If you are not revealing the facts and taking the over insurance on your name, it would create problem at the time of claim settlement.
What you have to do?
In the general, agents are misleading the policy holders to buy the policy without mentioning the complete details about the. The intention of most of the agents are to sell the products and not to think about your families future when they are in need of claim. At the end your family will be in trouble if you fully depend on the agents. Do the following things to avoid any problem in the claims settlement:
- Don’t rely on the agents. Fill the application yourself and provide all the details for the insurance company. If you have any doubts, directly go to the insurer and clarify your doubts.
- Don’t ever hide your health condition to your insurance company. If there is any need of medical test, please go through it and it would be more helpful at the time of applying the claim.
- Provide all the correct details about your age, occupation and nature of job. Be honest to the insurer.
- After you purchased the policy, cross check once and notify the insurer if there is any problem in the document.
Summary
Don’t take this as slightly when you are buying the insurance policy. There is no use if your policy is not helping the family at the time of claim settlement. All your work would go vain if the policy has the wrong details about you. Please make sure that you are applying the above points while buying an insurance policy. I you have any doubts, please post it in the comments section.
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December 27, 2011 at 11:02 pm
DEAR SIR,
IT IS TRUE THAT THE PEOPLE ARE MISLEAD BY THE AGENTS IN ORDER TO GET THE BUSINESS. EVEN THEY DO NOT EXPLAIN THE PROS AND CONS SOMETIMES. MOSTLY THEY ,THEMSELVES WILL FILL UP THE FORMS AND SIMPLY THEY GET THE FORMS SIGNED BY THE PROPOSER(S). MANY DETAILS/PARTICULARS ARE FILLED UP BY THEMSELVES WITHOUT REFFERING TO THE PROPOSER/ INSURED, IN ORDER TO AVOID REJECTION OF THE POLICY PROPOSAL BY THE INSURANCE COMPANY. HENCE WE SHOULD BE CAREFUL WHILE TAKING THE POLICY.
December 28, 2011 at 4:23 am
Hi,
I totally agree with you.
Here is one scenario where same situation occurred. Agent took all necessary documents and provided them all to his manager to filled out policy form and then manager had enrolled the policy without declaring the information which was required to submit at the time of enrolling the policy. Now due to sudden lose of the insured person, when a claim for the policy has been logged, family just came to know that so many things have been hidden in the policy.
It has never been expected to get money on behalf of loosing person who really matter’s to family. when policy enrolled, no such verification was done from company side now when time comes to pay money, they are looking to the things in depth. as a nominee, person is not looking for the money as sum assured, but is it possible to get the money which has been invested in to the policy as a premium?
duration of the Policy enrollment is not more then a year. when company people who enrolled the policy to insured were approached , they informed family members to hide such things from the investigation officer. company’s employee him self suggesting this to do.
Can you please suggest in such scenario, what possibly can be done? And whether it is possible to get the paid premium back?
As you said agent are hiding such thing to get business but as a new customer if such things are not known to us then why insurance companies are not taking any actions on those people OR agent? just because of this, decent people have to loose their money which is really worth to them. because it has been invested after gathering them by doing lot of hard work and in last they have to loose them due to such people.
can you suggest on this further?????
December 28, 2011 at 8:00 am
Hello Shramit,
Like your situation, many incidents happening every day in the insurance industry. But, only hope is that IRDA is trying to bring some rules which could benefit the customers. It would take several years to accomplish.
Thanks,
Krishna
December 29, 2011 at 11:38 pm
Thanks, i can understand and i know that the only hope is with us.
if you really want to worth your money then just follow the things which is mentioned in this article..
Thanks for such a wonderful fact information by this article.
January 2, 2012 at 2:12 am
Nothing is as painful as the death of a loved one. An insurance company can add to the trauma by rejecting the life insurance claim filed by the nominee. However, companies don’t reject insurance claims without a reason.
Given a very good information. Useful to anyone.Excellent post, thank you for sharing this with us!
January 2, 2012 at 2:52 am
Thanks to sharing such valuable post
January 15, 2012 at 12:25 am
It’s very good article. People not aware about it. Many people interested in how much pass back come & they forgot their actual aim