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Worried About Term Insurance Claim Rejection? Here's How To Avoid It

 



Term insurance is considered the most specific life insurance policy and offers comprehensive financial protection to life uncertainties.


Taking an insurance policy is best when you want to secure your loved ones against any financial setback. Term insurance is considered the most specific life insurance policy and offers comprehensive financial protection to life uncertainties. The cover or assured sum depends on the best term insurance plan you buy. 

But what can happen if your claim gets rejected? The rejection can make a family's world upside down. There would be the grief of losing a dear member paired with the fear of the upcoming financial liabilities. You certainly do not want to go through such adversities in an already adverse time.

Here Are Some Reasons That Could Lead To A Claim Rejection As a term insurance policy buyer, you need to understand the reasons that may be the reason for claim rejection. Some of the most common reasons include: 

  • Giving wrong age 
  • Developing a lifestyle disease 
  • Providing incorrect information in the application form 
  • Not specify the nature of the job 
  • Not disclosing old insurance policies 

Here are seven things you must understand as a customer to ensure that you will always get paid the due of your term insurance policy.

Never Conceal Information 

You should not conceal any information which can have an impact on your health. Any claim will be tracked back and traced to the information provided in the application. Hence giving details of Pre-existing diseases, conditions and habits play a vital role. If you give all the information transparency, the company will not have anything against you to stop the payment.

Paying The Premiums On Time 

Generally, insurers will settle claims only on active term insurance policies. Unfortunately, an astonishing number of people do not understand that delaying premium payments could result in lapsed policies. Moreover, you need to have a clean history of payments for the insurer to have one less point to haggle over when the time comes for settlement. 

Nominee Information Must Be Updated 

Before explaining it further, understanding the nominee meaning is crucial. A nominee is a person who will receive all the benefits from your term insurance policy. If you are married, you can choose your spouse or children as nominees. Nominees are those whose livelihood directly depends on you being well. With the help of a term plan comparison tool online, you can choose the best option for your nominee. 

Do Not Make Any Delays In Filing Insurance Claims 

When an emergency hits term Insurance claim is the last thing on your mind. But a quick call to the company could tell the difference between having or losing the cover. The sooner you intimate the company, the easier the process will be. Informing timely can also keep you clear of this accusation. 

Fill The Application Form Personally 

While filling the application form, do not trust anyone to take responsibility. The insurers will decide your premium payment amount overall coverage some exclusions depending on the information you fill in the forms. Agents generally fill the forms to meet the sales target and do not care about what will become in the future.

Medical Examinations Are Mandatory 

Most insurance companies sponsor your medical tests and examinations to get a better understanding of your health condition. The more they know, the less they can say was withheld as a reason to avoid giving you the assured sum. Though it is common for all health insurance policies, it may also be required for the best term insurance plans if you have a family history of medical conditions. 

Read The Policy Document Thoroughly 

The primary reason to read a term insurance policy document is to check if the company has any financial liability. You should also thoroughly check the exceptions list to understand if it meets your requirements. Such clauses can help the insured from any liability towards you. When you find such clauses, you probably have to renegotiate your policy document. We also have to note that most insurers will not budge on exceptions, but they may wiggle room on certain conditions. 

Income Tax Benefits 

An insurance policy also offers you tax benefits, such as:

  • Section 80C helps to access the tax benefit upon the premium paid 
  • 10D provides a maturity benefit 

We must keep all the information about the latest developments of the insurer. Noting the details in the term insurance policy document will help. We must never forget that insurance is not just a tax-saving tool. The best term insurance plan can surely become a critical financial product that can save your family and dependents when used correctly.


Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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