Major reasons life insurance claims get rejected, decoded by experts

From missed disclosures to policy lapses, experts break down the biggest reasons for health claim rejections and share simple steps to keep your coverage dispute-free.

Life insurance is meant to provide financial security to loved ones after an untimely death, but many nominees face claim rejections during those difficult times. Knowing why claims get denied can help families and ensure smoother payouts.

Why claims are often rejected

Experts say most denials stem from gaps in disclosure or lapses in policy management. Raja Tanwar, head of claims at Go Digit Life Insurance, highlights the following key reasons:

 

Incomplete or incorrect disclosure: Hiding pre-existing medical conditions, surgeries, or even lifestyle habits like smoking or alcohol use can lead to claim rejection later.

 

Non-disclosure of medical history: Omitting chronic illnesses, genetic conditions or hazardous hobbies can give insurers grounds to deny claims.

 

Policy lapses: If premiums are not paid on time, the policy becomes inactive. Beneficiaries cannot make claims on a lapsed policy unless it has a paid-up value clearly communicated to them.

 

Multiple undisclosed policies: Insurers cross-check coverage against income levels and insurable interest. Non-disclosure of existing covers may trigger investigation and claim denial.

 

How to avoid claim rejection

Industry experts stress that health insurance contracts operate under the principle of utmost good faith, meaning full honesty is required from the buyer. Here are key steps to avoid trouble:

 

Make full disclosures: Share accurate details on health, occupation, habits and existing policies at the time of purchase.

 

Review policy documents: Carefully read exclusions, waiting periods and claim requirements before buying.

 

Pay premiums on time: Set reminders to avoid policy lapses and keep receipts handy.

 

Notify changes: Update insurers about changes in health, address, or nominee details promptly.

 

Maintain documentation: Keep hospital records, bills, and policy documents organised for a smooth claim process.