How to Ensure That Your Term Insurance Claim Is Not Rejected

How to Ensure That Your Term Insurance Claim Is Not Rejected

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A term insurance plan should be purchased only after doing proper research and study. But, before that, let us understand the term insurance meaning. A term plan is a pure life insurance cover wherein the policyholder pays a premium amount either monthly or yearly. However, in case of the untimely demise of the policyholder, the entire sum insured will be given to the nominee or family members of the policyholder.

But, at thel same time, it is essential for applicants to check the claim settlements ratio of the insurer before buying a term life insurance policy. For example, the claim settlement ratio of Tata AIA insurance company was 98.02% for FY 2021-22. The higher the claim settlement ratio, the better the insurer is. Similarly, one can check other insurers as well.

Hence, to make it simple for our readers, we have come up with a checklist which will help you ensure that your term plan claim is not rejected. Read more and learn about it in detail.

Key Checklist to Ensure That Your Term Insurance Claim is Not Rejected

The following pointers will help you in term insurance policy claim acceptance.

  • Appropriate mention of the Medical information

Non-disclosure of medical information or details is one of the term insurance claim rejection reasons. It is essential for policyholders to disclose and furnish entire details with respect to any past or existing medical sufferings, conditions, operations, surgeries, treatment, etc. In addition to this, if any family member is suffering from diseases such as cancer, high blood pressure, diabetes, cardiovascular diseases, etc., then it should be disclosed as well. This majorly impacts the policy premium amount.

  • Appropriate details in the application form

The applicant should fill in the correct information in the application form. Details such as income, age, lifestyle habits, i.e., drinking or smoking, qualification, previous claims, policies, settlements, loans, etc., should be rightly mentioned in the application form. If any of this information turns out to be false, then the status will appear as a term insurance claim rejected. This information helps in deciding the premium amount.

  • Update the Nominee Information

The policyholder should update the information pertaining to the nominee. Upon the death of the policyholder, benefits and the sum insured is paid to the nominee or beneficiary. Therefore, it’s critical to keep the insurance company updated on the nominee’s contact details, including their address and phone number. That creates complications during the claim process and increases the likelihood that your life insurance claim will be rejected.

Choose your nominee carefully, too. If you’re married, your spouse or children may be nominated; if you’re single, your parents or any other family members should be nominated. The nominee must also be accompanied by a guardian if the nominee is a minor.

  • Fill out the Insurance proposal form on your own

It is often seen that the policyholder hands over a copy of the blank check and the proposal form to the advisor. They ask him/her to fill in the details. These details should be filled in by the applicant as the advisor might be unknown with respect to certain information such as financial details, medical history, etc. Thereafter, if the information is not filled properly or data is factually incorrect, then the term insurance claim might get rejected.

  • Disclose details pertaining to other insurance policies

The applicants should furnish all the details with respect to the current policy in hand, the insurer of those policies, policy number, sum assured, etc. Non-furnishing of these details will lead to term insurance claim rejection.

  • Pay premium amount well in time

The policyholder should pay the premium amount regularly and on time. The insurers will only pay claims under active insurance plans. Surprisingly few people are aware that delaying premium payments results in policies becoming expired or deemed. The concerned person will lose protection when the insurance coverage expires, and whatever premiums have been already paid will be nullified.

Thereafter, the premium will not be returned, and at the same time, the insurer will not be legally obligated to pay the sum assured and death benefits. In certain situations, missing payments may also incur penalties and reinstatement costs. Further, the term insurance claim will be rejected. Thus, it is advised to pay the premium amount within time.

Conclusion

So, before you buy your term insurance policy, make sure that you furnish the above-mentioned details so that the term insurance claim is not rejected. After all, term insurance will secure the future of loved ones and family members. So, one should not take any chance which does not fall in one’s favour.

Insurance