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Reasons For Life Insurance Claim Rejection

IamCheated.com Research Team | August 23, 2018  4:54:pm

Availing life insurance is the best way to secure the future of your loved ones, when you are not around. It makes sure your family does not face any financial problem, in case of a sudden demise. It is the best thing you can do for your family, but sometimes, small mistakes and ignorance on your part, can lead to rejection of an insurance claim.

This can create unnecessary problems for your family. So, it is very important for you to know the reasons that can lead to the rejection of a life insurance claim. In this blog, we will discuss some reasons that can lead to the rejection of a life insurance claim.

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Reasons For Life Insurance Claim Rejection

1. Death By Suicide

The rules vis-a-vis suicide cases, depends on the kind of insurance you avail. If the policyholder has availed linked plans, his family members will receive the entire ULIP fund value, even if he commits suicide within 12 months from the commencement of the policy. In the case of non-linked plans, only 80% of premiums paid will be given to the nominee, if the policyholder commits suicide within one year.

2. Hiding Medical History And Lifestyle

Hiding relevant information from your insurer, can lead to the rejection of an insurance claim. So, it is advisable not to hide information related to your health and lifestyle, especially smoking and alcohol-related questions. Many people hide a lot of information from their insurers just to save premiums. But, this will definitely lead to the rejection of the insurance claim.

See Also: How To Make A Claim On A Life Insurance Policy?

3. You Start Smoking After Availing The Policy

You might be aware that premiums charged for smokers, is higher when compared to non-smokers. So, in case you start smoking after availing an insurance policy, you need to inform your insurer. This will lead to an increase in the premium. If you fail to inform your insurer in time and are then diagnosed with a life-threatening disease, the insurer can reject the claim.

4. Natural Calamities

The basic insurance plan does not cover deaths caused due to natural calamities like earthquake, flood or a tsunami. To cover death by natural calamities, you need to choose add-on plans.

5. Drink And Drive

If the policyholder was driving under the influence of alcohol or drugs and death was caused by this, the insurer has all the right to reject the insurance claim.

6. Adventure Sports

The claim will not be settled if the policyholder loses his life due to participation in adventurous sports like skydiving, bungee jumping, or other outdoor sports like power-boat racing, motor sports and so on.

7. Murder

If the policyholder has been murdered and if the insurer gets to know the nominee is the accused, the insurance claim will be rejected.

8. Law-Breaking

The insurer has all the right to reject the insurance claim, if the policyholder dies as a result of breaking laws or is involved in a crime. 

9. Terrorist Attack

Insurance plans do not usually cover terrorist attacks. If at all the nominee contacts the IRDAI, claims may be settled on humanitarian grounds.

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