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28-07-2022 |
A life insurance policy is a significant financial and personal saving for many of us. Having a suitable term insurance plan not only provides you with life cover but also helps you ensure the financial security of your family after your passing away.
Furthermore, investing in a term plan enables you to develop financial discipline in your behaviour and optimise your savings. Therefore, it is critical to invest in a term insurance plan as early in your life as possible.
What is a term insurance plan and how you can purchase it?
A term insurance plan is an agreement between an insurance company and a policyholder within which the former agrees to pay the nominee of the latter a predetermined sum in the event of the demise of the policyholder within the term of the policy. It is important to note here that the concerned insurance company charges a premium from the policyholder as consideration for providing the service.
The process of purchasing a term plan online is safe, easy, and time efficient. Tata AIA Life Insurance offers term life insurance plans online. You can visit our official website and use the term plan calculator to find a term insurance plan that suits your insurance goals and financial strengths. You can buy a Tata AIA term plan online by following a few simple steps on our website.
Your family can benefit from the death benefit offered by a term insurance plan only if the claim is successfully processed. There are a host of reasons why term plan claims get rejected. Let us have a look.
Here is Why Term Insurance Claims Get Rejected
While filing a term insurance claim, you need to be careful to mention all the relevant details and attach all necessary documents with the claim form. More importantly, you should inform your insurance provider of the death of the policyholder within the timeline mentioned in the term insurance policy. By following the necessary procedure, you can prevent the rejection of your term insurance claim.
There are several reasons for the rejection of term insurance claims. Some of the most common reasons for the rejection of term insurance claims have been discussed below.
Filing a claim against a lapsed term life insurance policy
The most common reason behind the rejection of a term insurance claim is the filing of a claim against a term insurance policy that has lapsed. It is important to remember that you are required to pay a certain amount as a premium at predetermined intervals to keep your term insurance policy active. Failure to make the aforementioned payments in time is likely to result in your term insurance policy getting lapsed.
Most insurance companies provide policyholders a grace period to make the payment of a missed premium instalment. If you do not make your premium payments in a timely manner or within the aforementioned grace period, you are vulnerable to having your term insurance plan expire. In the event of your death after the expiration of the policy, your nominee will not be able to file a valid insurance claim.
Hence it is of paramount significance to make your term insurance payments on time, particularly if you want to prevent your insurance claim from being rejected.
Concealing material facts from the insurance provider
Since insurance is an agreement made in good faith, it is critical for both parties, that is, the insured and the insurer, to disclose all material facts in a timely, transparent, and systematic manner. Hence the concealment of any material facts from your insurance provider is likely to result in a rejection of your term insurance claim. For instance, if you have a critical illness and you conceal this fact from your insurance provider, your term insurance claim will get rejected.
Since one's medical history constitutes a significant factor in the determination of the life cover and premium amount of a term insurance plan, hiding any illness or medical condition or partially disclosing the extent of the same is sufficient cause for your insurance provider to nullify your term insurance policy and reject your insurance claim. Therefore, you must ensure that you do not conceal any material information pertaining to your term plan from your insurance provider.
Not filing the term insurance claim within the prescribed timeline
Your term life insurance policy clearly states the timeline of filing the term insurance claim after the death of the policyholder. In order to prevent your insurance claim from being rejected, you must adhere to the aforementioned timeline. Therefore, it is critical to read your term insurance plan carefully and thoroughly and ensure that you do not miss any vital information.
Submitting a claim in contravention of the coverage of the term insurance plan
The extent of the coverage of a term insurance plan is specifically stated in the policy document. Therefore, there is clarity on which causes of death are permissible reasons for the filing of a term insurance claim. However, if you file an insurance claim for a death that is caused by a reason not covered in your term insurance plan, the claim is going to get rejected.
For instance, if you do not have an accidental death cover or a critical illness cover included in your term plan, death resulting from either cause is not grounds for a valid insurance claim. Therefore, you must add the necessary additional features to your term plan to have a comprehensive life cover.
Failing to undergo the required medical examinations
One of the conditions for buying a term insurance plan is undergoing some basic medical tests and submitting the reports to the selected insurance provider. The aforementioned reports are critical to the determination of your life cover, the term of the policy, and the premium amount. Therefore, insurance companies are very strict about compliance with the aforementioned rule.
If you do not undergo the required medical examinations in time or do not inform the selected insurance provider of a pre-existing medical condition, your term insurance claim is bound to be rejected. Hence it is important to follow the necessary procedure and not hide any relevant medical information from your insurance provider.
Conclusion
If you avoid the mistakes mentioned above, you can ensure that your term insurance plan claim does not get rejected. You must ensure that you read the policy documents carefully and comply with the necessary procedures. Furthermore, you must inform your insurance provider about any facts that may be material to your term plan.
L&C/Advt/2022/Jul/1697
