Why will your insurance policy get rejected?

People work hard in life, save money, invest them into relevant investment tools and start relaxing in their chair hoping that things will be taken care off during mishaps. This is an ideal way of thinking by people. Parag Deshmukh, a bank employee is a hard working guy, who saved money, invested in the right products and bought a life insurance as a safety net for his family. One fine day while playing cricket with his friends on a Sunday afternoon he suddenly collapsed. When rushed to the hospital, his family members realized that he had just suffered a stroke in which he passed away. Of course, his family members broke out and their hearts were shattered. While there had been a sudden storm in their lives the only way out to revive was the life insurance which he had left for them. But just when the claim went for pre-approval to the insurance company, it was rejected. Tremors ran into the minds of Parag’s family and suddenly they once again felt orphan. While this was just one of the cases in town there are  thousands of people whose insurance claim gets rejected because either they are unaware of the rules of policy or hide things or some other reasons.

This article will give you some reasons why your insurance claims could be rejected.

Furnishing wrong information

Insurance is an agreement between the insured and the insurer, to pay for losses in accordance with the policy document. The entire contract finds its base in the policy document and the authenticity of the facts are declared in it. There is no scope of error while giving your basic information because at the end it is the insurance company  who will scrutinize the data very well at the time of settling the claim. Your age, income and sources of income play an important role in determining the insurance amount. Quoting lower age or hiding sources of income or occupation will result in outright rejection of your claim. It is advisable use the 15-30 days window given by your insurance company to change any wrong information or stop the policy.

Hiding lifestyle habits

There are lots of people who like to socialize very often. They might have habits like smoking or having a drink or two. Well, it is each person’s individual choice, but these factors impact your premium based on the risk that the insurance company is exposed to. If you hide such habits there are high chances of your insurance claim to get rejected.

Pre-existing diseases

At times, people get scared to reveal their pre-existing diseases during the purchase of policy. Even if your policy does not call for a medical test, it is in your best interest to spell out minor medical conditions that you may be facing. Histories on parents’ medical conditions are also required in certain cases. It is better to tell honestly about the ailments that you are facing at the time of purchasing a life insurance policy . Many life insurance policies exclude claims on certain likely pre-existing conditions within a certain time period after buying the policy.

Suicides and missing cases

A very important clause under which there are high chances your policy might get rejected if not adhere strictly is suicides and missing cases. Any life insurance policy bought less than a year ago and if the person commits suicide then the policy can straight away get rejected.  Secondly, missing cases face a double penalizing. In case of the insured going missing, claims are allowed only after 7 years. What more, the family needs to keep the policy alive by paying premiums during the 7-year period. In cases where it is proved that the person is dead, as in cases of terrorist act, natural calamities etc. the claim is released on the basis of list of people presumed dead that is released by the government.

Policy lapse

Every policy has a certain due date under which an insurance person is supposed to keep the policy on-going so as to take the claim. Insurance companies grant a period of grace (generally 30 days) for payment of premium, beyond which the policy lapses. When a policy is in a lapsed state, claims are not entertained. This is one mistake which need to be avoided by paying premiums on time.

Incorrect nomination details

Many times people who take life insurance policy are single and nominate parents as beneficiaries. However, a few years down the line, as your family size increases, you may want to change your nomination details. But if your parents are no more and the nominee still continues in their name then there is a high chance of p