5 Top Reasons for Term Insurance Claim Rejections - Greyfont

5 Top Reasons for Term Insurance Claim Rejections


A term insurance plan offers you a life coverage. You make the premium payments on time and in return your insurer offers a financial security to your family in form of a sum assured on your demise.You definitely wouldnot wish to see your beloved family members to run from pillar to post for getting the term insurance claim settlement done. This article will highlight top 5 reasons why your insurer may reject the claim approval.


5 Reasons why term insurance claims may get rejected


Sadly, you won’t be around during the claim settlement process. Your beneficiaries would have to do the running about. Therefore, inorder to ensure that you pull the right chords, it is necessary to keep the following things on mind.


Usually, a term insurance claim would be rejected on the below grounds:


  • Incorrect details: Usually there is no medical examination required in case of issuance of a term insurance plan. This is issued basis a trust between you and the life insurance company. Therefore, you need to ensure that you furnish correct details in the application form. Any minute mistake too would lead to a term insurance claim rejection. Therefore enter correct details regarding your weight, age, height, profession, existing insurance policy details, etc.


  • Concealed information: Never hide anything from the insurance company. Say for instance, you might be an occasional smoker, yet, it is vital for you to inform the insurance company that you are a smoker. There would be a scrutiny that would be carried out by your life insurer and any information that is concealed regarding your health would lead to claim rejection.


  • Lapsed policy: There might be instances where you weren’t able to make the term insurance premium payment. However, this would lead to term insurance policy lapse and therefore it goes without saying that your term insurance claim would be rejected due to policy lapse. Therefore, be disciplined and make the term insurance premium payments on time since you may never know when a bad situation may strike. 


  • Type of death suffered: Every insurance policy has a list of exclusions attached to it. So, if you face a death that falls under this list, the term insurance claim raised would be rejected. Say for instance, if you die by committing a suicide soon after purchasing the term plan, your claim would be rejected. Reason being, suicidal death can be covered only post completion of one policy year. The life insurance company would investigate the reason for your death thoroughly and only then your term insurance claim would be either honoured or dishonoured.


  • Improper documents submitted: Many a times, a term insurance claim gets rejected due to submission of incorrect documents. Your beneficiaries need to ensure thoroughly that all the correct documents are submitted. You also need to inform your nominees and other family members about the purchase of this term plan and bestow the responsibilities on them before the unfortunate strikes.


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