5 reasons why my life insurance claim was rejected

Aniket Rathi struggled to file a life insurance claim after his father passed away. It turned out that his father had made several errors when taking insurance.

For all intents and purposes, Aniket Rathi* (28) has had a quiet, uneventful life. The garments exporter lives with his mother and younger brother in Mumbai. Last year, his quiet home life was racked by a series of events. “My father had been suffering from a bad liver for three years. One morning he started vomiting and had to be rushed to hospital. He passed away that evening from cirrhosis,” Aniket says.

At the time, his mother had been on the cusp of undergoing hip replacement surgery, for which his father was cobbling together some money. “We didn’t have the Rs 5 lakh required for the operation. I had also borrowed money from my friends. When my dad passed away, we remembered that he had a life insurance policy with all of us as beneficiaries. I decided to file for the insurance money,” he explains.

He initiated the claims procedure with the burden of his father’s passing pressing in on him. But his nightmare was just beginning. The insurance claim was rejected on several grounds.

*His father had falsified certain information. A store owner with an erratic income, Aniket’s father had overstated his annual income during his last policy renewal. “I was told by the insurance company that the income proofs he had submitted were false. I realised he had done it to get more coverage for us, but it was devastating all the same,” Aniket says.

*Rathi Sr had not mentioned he had end stage liver disease. His father had been diagnosed with cirrhosis five years ago, but he had taken life insurance only two years after his diagnosis. “He was constantly worried about us, what we would do if he passed away suddenly. I think that was why he did not mention that he had terminal liver disease. He must have thought that he would not get life insurance at all if he mentioned that fact,” Aniket explains. How unfortunate – his father could have simply taken critical illness cover!

* An insurance broker had misrepresented the facts. “We had an insurance agent who handled the paperwork for my father. He entered the wrong age, the wrong occupation and even selected a plan with unaffordable premiums. On two occasions my father could not pay the half yearly premiums and the policy almost lapsed. This put a black mark against his name,” Aniket says.

* He had not undergone medical tests. When he last renewed his policy, the insurance company had asked Aniket’s father to undergo a medical test with their accredited centre. “But he failed to do so, despite two reminders. Probably he was afraid of his liver disease being found out. In any case, he had received a final intimation from the insurer just a day before he passed away. In effect, the policy had not been renewed,” he rues.

* He had not mentioned that he had an old insurance policy. “During background checking, the insurer found that my father had another old life insurance policy for an extremely low coverage. He had taken it years ago when his brother told him to. But despite being prompted to reveal about existing policies, he had not mentioned it. The insurer told me that this reason alone sufficed to reject the insurance claim,” Aniket said.

*Characters in the article are fictional and merely illustrative in nature