Can one challenge the rejection of insurance claim? Expert answers

When is a life insurance claim rejected? Can one challenge such a rejection?

Life insurance is about securing your loved ones in the event of your absence. To ensure that this objective is met without any hassle to our loved ones, we should be aware of the reasons that typically lead to claim rejection. 
 

The first reason could be non-disclosure during the purchase of insurance. Information and disclosures mentioned in the proposal form are critical and material for the issuance of an insurance policy. Hence, applicants should ensure that all information and declarations are truthful and complete. 

The second reason could be non-payment of premium. Regular premium policies require premiums to be paid at defined intervals, as mentioned in the policy. In the event of non-payment, policies lapse, and the benefits cease. Claims made on such lapsed policies will be rejected.

The third reason could be an eventuality during the waiting period. If a waiting period for benefits to start is mentioned in the policy provisions, insurance companies can reject the claim during that period. The suicide clause is a typical example. 

The nominee can challenge a claim that is denied. First, approach the insurer to understand and then place any additional information or evidence for review. If the claimant is still not satisfied, he can seek legal help or approach the insurance ombudsman.

I am a 45-year-old life insurance policyholder. I am divorced and do not want my ex-wife to be the nominee. Instead, I want to nominate a friend. Can I do that? What else can I do to ensure my friend gets the money?

The objective of purchasing a life insurance policy is to provide financial support to one's family and loved ones, in case something happens to the policyholder. A nomination is essential as it makes the claim settlement process smooth and hassle-free. Changing the nominee can be done at any time during the term of the policy. In most cases, the nominee is a family member such as the spouse, children, parents or siblings. It is in the interest of the policyholder, and hence life insurers recommend nominating a blood relation to ensure there is no moral hazard and there is sufficient insurable interest. However, if you want to nominate someone other than a blood relation, you can submit the request to your life insurance provider. The insurance company will evaluate your request and take an informed decision based on its underwriting guidelines.

Another way you can ensure that your friend gets the insurance proceeds is by naming your friend as the beneficiary of the proceeds via a Will. 

I have a seven-year-old money back policy. Is it possible to change the due date of the premiums?

While there is no provision for changing the premium due date for a money-back policy, you can alter the premium paying frequency (to annual, half-yearly, quarterly or monthly), depending on the terms and conditions of your policy. Timely payment of premiums ensures that your policy continues uninterrupted and enables you to enjoy the benefits it offers. You will typically receive a premium payment reminder well before the due date. If for any reason you have missed a premium due date, you can make the payment within the grace period, which is usually 15 days for monthly premium payments (regular) and 30 days for more extended payment options, such as yearly or half-yearly. Most companies have a host of premium payment options. You can choose one, depending on what you find convenient.
 

The writer is MD & CEO, HDFC Life. 

The views expressed are the expert’s own. 

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