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Reasons for your term insurance claim rejection

Reasons why term insurance claims get rejected

Term insurance is a crucial financial tool in India, offering a safety net for your loved ones in the unfortunate event of your passing. However, claim rejections can be a harsh reality, leaving families financially vulnerable during a difficult time. Understanding the reasons for term insurance claim rejection can help you avoid pitfalls and ensure your beneficiaries receive the rightful payout.

Why Term Insurance Claims Get Rejected?

Here are some of the most common reasons why term insurance claims in India might be rejected:

  • Non-Disclosure or Misrepresentation of Information: This is a major reason for claim rejection. When applying for term insurance, you are required to disclose all material information accurately and honestly. This includes your medical history, lifestyle habits (smoking, alcohol consumption), occupation, and any pre-existing health conditions. Withholding or misrepresenting any information can be considered fraud and lead to claim rejection.
  • Policy Lapse Due to Non-Payment of Premiums: Timely payment of premiums is essential for your policy to remain active. If you miss premiums beyond the grace period offered by the insurance company (typically 15-30 days), your policy will lapse. A lapsed policy offers no coverage, and any claim arising during this period will be rejected.
  • Death Due to Excluded Events: Term insurance policies typically exclude coverage for certain events, such as death by suicide within a specific period (often 1 year) of policy purchase, death due to adventure sports (skydiving, paragliding, etc.) not declared during application, or death caused by war or criminal activity. If the cause of death falls under an exclusion clause, the claim will likely be rejected.
  • Incomplete Claim Documents: When filing a claim, ensure you submit all the required documents as per your insurance company's guidelines. This might include the death certificate, policy documents, medical records, and any other relevant documents. Missing or incomplete documentation can delay or even reject the claim process.
  • Delay in Claim Intimation: Inform your insurance company about the policyholder's death as soon as possible. Some policies have time limits for claim intimation, and exceeding this limit might lead to complications or even rejection.
  • Undisclosed Pre-Existing Medical Conditions: Pre-existing medical conditions are health issues you have before purchasing the term insurance policy. Failing to disclose these conditions during the application process can be grounds for claim rejection, especially if the undisclosed condition is linked to the cause of death.

Protecting Yourself from Claim Rejection

Here's how you can minimize the risk of your term insurance claim being rejected:

  • Be Honest and Transparent: Disclose all information accurately and completely during the application process. Don't hesitate to seek clarification from the insurance agent or advisor if you have any doubts.
  • Pay Premiums on Time: Set up reminders or automatic payments to ensure timely premium payments and avoid policy lapse.
  • Understand Policy Exclusions: Carefully read and understand the exclusions mentioned in your policy document. If you participate in activities excluded from coverage, consider adding a rider to your policy for additional protection.
  • Maintain Proper Documentation: Keep all policy documents, medical records, and related paperwork safe and organized. This makes it easier to retrieve the necessary documents when filing a claim.
  • Claim Intimation and Assistance: Inform your insurance company about the death of the policyholder immediately. Seek guidance from the insurance company or a financial advisor regarding the claim process and required documentation.
  • Review Your Policy Regularly: Periodically review your term insurance policy, especially as your health or lifestyle changes. If necessary, update your policy or consider additional riders to maintain adequate coverage.

Seeking Help From Authority

If your term insurance claim is rejected, don't lose hope. You have the right to appeal the decision.

  • Review the Rejection Reason: Carefully understand the reason for claim rejection mentioned in the insurer's communication.
  • Gather Evidence: If you believe the rejection is unfair, gather relevant documents and evidence to support your claim. This might include medical records, doctor's statements, or any information that clarifies the situation.
  • Appeal the Decision: Follow the insurance company's grievance redressal process to appeal the claim rejection. You might need to submit a written appeal with supporting documents.
  • Seek Professional Help: Consider consulting a lawyer or insurance advisor specializing in claim disputes. They can guide you through the appeal process and represent you effectively.


Term insurance offers invaluable financial protection for your loved ones. By understanding the reasons for claim rejection and taking proactive steps, you can ensure your family receives the rightful payout in your absence. Remember, honesty, timely communication, and proper documentation are key to a smooth claim settlement process. Don't hesitate to seek help

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