You take an insurance policy to protect in the event of an eventuality. But you may have to go through the shock of your insurance claim being rejected by the insurance company. Are you aware of the reasons for rejection of insurance claims? Do you know when your term insurance application rejected? Above all, proactively, how can you ensure that your claim will not be rejected?

It could be a life claim, it could be a medical insurance claim or it could be an asset insurance claim. Remember, an insurance contract is a contract of Uberimmae Fidei, meaning a contract of "Utmost Good Faith ". The insurance company relies on you to make a clean disclosure of all risk factors and if you miss out making a clean disclosure then your policy claim is likely to be rejected. Let us understand the circumstances under which your insurance claim can be rejected..

When can a life insurance claim be rejected..?
A life insurance claim can be rejected under a variety of conditions. Remember, these conditions are only indicative and not exhaustive. For that you need to go through the fine print in detail as the devil often lies in the details.
  • You may have signed your insurance policy documents without reading the fine print. There are a lot of clauses and sub-clauses which clearly lay out the date from which the insurance is applicable, the cooling period when claims will not be accepted etc. Claims can be rejected if you have been callous about these things.
  • Never give incorrect information in your insurance policy about your age, the nature of job, the risks you are exposed to, your weight, your family and genetic illnesses etc. Also ensure that these disclosures are explicitly made in the form and countersigned by the agent and keep a copy for your reference.
  • A common reason for rejection of claims is when you do not disclose your medical history. If you have lifestyle diseases like hypertension or diabetes disclose it. It could entail a higher premium but won 't lead to rejection of claims. Also disclose your family history, your vulnerability, your job risks to your health etc.
  • Never ever avoid a medical test. You are required to visit a hospital and give tests like blood tests, stool tests, endurance tests etc. Only after the medical officer is satisfied and countersigns that you should go ahead with the policy.
  • It is quite common for people to forget to pay insurance premiums on time. This is more so if you have a term policy since it does not have any surrender value. If you skip premiums and do not bother to revive it then your policy is lapsed and you lose claim.
  • Interestingly, your life insurance claim can also be rejected if you fail to disclose other insurance covers that you have. It is not difficult to locate your other covers since all y our policies are mapped through your PAN card and your Aadhar card. Concealing other policy details is a fraud and your claim is liable for rejection.
When can a medical claim are rejected by your insurance company..
You have spent a fortune at the hospital and suddenly realize that your insurance claim has been rejected. Why do medical claims get rejected?
  • Every medical insurance policy has a certain cooling period of around 1 year during which claims are not entertained. In fact, for certain serious problems claims are not entertained for up to 2 years.
  • Non-disclosure of medical facts is a common reason or rejection of medical insurance claims. Like in case of life insurance, even in medical insurance you need to make a clean breast of your complete medical picture. These include your previous diseases, any surgeries, any long term illnesses, any life threatening illnesses, family medical history etc.
  • If you read through the medical insurance contract in detail you will find that there are specific exclusions. For example, bariatric surgery is normally not covered under medical insurance. Transplant of prosthetic limbs is also not covered under medical insurance as are disease like AIDS. Similarly, cosmetic surgery and treatment via Ayurvedic and Homeopathic treatments are also likely to be rejected.
  • It is very important that you do not let your policy lapse due to non-payment of premium. Even if you overshot the premium date by 3-4 days and get hospitalized in the meanwhile, then you can be denied your claim.
When can a car insurance claim be rejected?
Remember, when you drive a car the Regional Transport Authority rules only make third party insurance as mandatory. Insuring your car for damages is entirely up to you. However, the insurance claim can be rejected under the following conditions..
  • When the car is being driven by a person who is not fit to drive. That means if the person is either not having a license or is a minor or if he has been barred from driving or if he is driving in a state of intoxication then the car damage claims are likely to be rejected.
  • If your vehicle is not roadworthy meaning if you have been driving with broken rear view mirror, damaged clutch and brakes, problems in the axle etc then the claim can be rejected. The claim can also be rejected if the condition of the vehicle makes it unfit to run on roads due to aging.
  • When you buy car insurance your car has to be inspected for pre-existing damages and countersigned by the inspector. Only then is the insurance claim accepted. If your vehicle has not been inspected property then the claim can be rejected.
  • Your car insurance claim can also be rejected for other reasons. For example, if you are using your private car as a tourist vehicle to ferry people for money then your claim can be rejected. Also if your car is stolen from unauthorized parking then again your claim can be rejected.
Normally, claim rejections as a percentage is quite low. The onus is on you to ensure that you take care of the nitty-gritty 's to avoid last minute disappointment of your claim being rejected.