Life insurance: Steps to ensure your claim is not rejected

Data from Insurance Regulatory and Development Authority of India annual report for the year 2020-21 show that for individual life insurance, insurers paid death claims to 10.84 lakh policies as against 11.01 lakh claims. The number of claims repudiated — a claim that has been processed and is found unpayable — was 9,527 for an amount of Rs 865 crore and the number of death claims rejected was 3032 for an amount of Rs 60 crore. The number of claims pending at the end of 2020-21) was 3055 for Rs 623 crore.

The claim settlement ratio of LIC was 98.62% in2020-21 as compared with 96.69% in 2019-20 and the proportion of claims repudiated/rejected fell 1% in 2020-21 from 1.09% in the previous year. The claim settlement ratio of private insurers was 97.02% in 2020-21 as compared with 97.18% in 2019-20.

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So how can you ensure that your insurance claim is not rejected?

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

For a new life insurance policy, insurers insist on a medical test for those above 45. Experts say even those below that age should insist on a medical test to understand the medical condition and help the proposer to detect diseases early and go for treatment. If you suffer for some ailment after the policy has been issued, it must be informed to the insurer at the earliest.

Pay premium on time
It is important to pay the renewal premiums on time so that the policy does not lapse. If the premium is not paid within the due date, insurers give a grace period which is 15 days for monthly instalments and 30 days if premium is paid on a quarterly, half-yearly or yearly basis. The policy is still in force during the grace period and the nominee will be eligible for the claims. However, if the premium is not paid even during the grace period, the policy lapses and all the benefits covered under the policy will be terminated.