Insurance Claims, Reasons for Rejection?

May 22, 2011     Posted under: Know How

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Getting an insurance claim rejected is becoming a norm, even though everyone tries to get at least one insurance policy. It is only after rejection that one starts to ponder about the reasons what could be associated with the rejection and also doubts if the insurance policy chosen is really the worth the premium being paid?

Early Death: If the death occurs within two years of buying the policy, it raises suspicion of fraud. An insurance company will scrutinize the case very closely. This could take up to six months.

Non-disclosure of health condition: If death is due to a disease and the insurer believes the policy holder hid his condition. This is especially true of low-value policies, which don’t require medical tests.

Non-divulgence of family history: Even if a policyholder developed a medical condition later, the insurer may refuse the claim if he had not disclosed that other family members suffer from the disease.

Details of hazardous occupation: Certain occupations, such as motor racing, mining, construction-related jobs or armed forces, carry high risk. If occupation is not correctly mentioned, claim can be rejected.

Over-insurance: Insurance companies want to know if a person’s life is really worth the cover he wants. A high cover and not disclosing other policies may lead to suspicion that insurance was bought with an ulterior motive.

NitiN Kumar Jain

Nitin works in an IT MNC professionally but blogs and owns NKJ Live. He is also the co-owner of a professional start-up ARGHAM BYTES

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