Life insurance: steps to ensure your application is not rejected

Data from the Insurance Regulatory and Development Authority of India’s annual report for the year 2020-21 shows that for individual life insurance, insurers paid death claims at 10.84 lakh of policies compared to 11.01 lakh. The number of rejected claims – a claim that was processed and found to be unpayable – was 9,527 for an amount of Rs 865 crore and the number of rejected death claims was 3,032 for an amount of Rs 60 crore. The number of pending claims at the end of 2020-21) was 3,055 for Rs 623 crore.

LIC’s claims settlement rate was 98.62% in 2020-21 from 96.69% in 2019-20 and the proportion of claims repudiated/dismissed fell by 1% in 2020-21 from 1.09% l ‘last year. The claims settlement rate for private insurers was 97.02% in 2020-21 compared to 97.18% in 2019-20.

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So how can you make sure your insurance claim isn’t denied?

Disclose all information
Be transparent and disclose all correct information regarding your health and medical conditions, family history, occupation, income, existing policies, lifestyle choices, etc. in the proposal form (online or physical). It is best to complete the form yourself. The insurance company will set the premium based on all disclosures. Read the policy document carefully and inform the insurer of any errors.

For a new life insurance policy, insurers insist on a medical test for people over 45. Experts say that even people below this age should insist on a medical test to understand the condition and help the proband detect diseases early and seek treatment. If you suffer from an illness after the policy is issued, you must notify the insurer as soon as possible.

Pay the premium on time
It is important to pay renewal premiums on time so that the policy does not lapse. If the premium is not paid on time, the insurers grant a grace period which is 15 days for monthly installments and 30 days if the premium is paid on a quarterly, half-yearly or annual basis. The policy is still in effect during the grace period and the applicant will be eligible for claims. However, if the premium is not paid even within the grace period, the policy expires and all benefits covered by the policy will be terminated.