The question of whether an insurance claim will be denied or rejected always grips the minds of buyers of insurance products. So, what are the common causes of denial/rejection of these claims, and how do we avoid these causes?

Below lie excerpts from an exclusive conversation with G Murlidhar, Managing Director, Kotak Mahindra Life Insurance Company Ltd.

1.What to do if your life insurance claim is denied or rejected?

Insurers would normally settle all claims other than cases of material non-disclosure by customers; rejecting or repudiating such claims is a fair practice, keeping in mind the interests of all other policyholders. Usually, there are elaborate procedures within the insurance company before rejecting or repudiating claims, including investigation and legal checks. However, if the customer feels that the claim has been wrongly repudiated, they can approach the Grievance Redressal Cell of the insurance company for reconsideration of the decision with appropriate reason and necessary documentation. Further, in case the customer is not satisfied with the Insurance Company’s decision, then they may approach the Insurance Ombudsman office, which is an independent authority.

2. What are the common reasons of rejection or denial of claims?

Non-disclosure of material information by the proposer at the time of policy origination is one of the main causes of claim repudiation. Non-disclosure may be regarding the health or medical history of the life insured, or concealment of an existing insurance cover, misrepresentation of income or occupation that would impact the financial eligibility of the insured. Another form or reason of rejection of a claim is when the policy is in a lapsed status due to non-payment of due insurance premiums. It important for all policyholders to pay their premium in time and keep the policy in force for obtaining its full benefits.

3. Ways to avoid rejection or denials:

Accurate disclosure of past and present health or medical history, occupation, income and past insurance cover taken at the time of proposal helps to avoid denial of the claim. Claim denials due to policy lapses can be avoided by regularly making the necessary payment of premiums and keeping the policy in force. To avoid policy lapsation due to non-payment of premium under extreme circumstances, the customer may opt for suitable rider solutions. In case of death of the premium payer or in case of accidental disability, the benefit under the rider triggers in the form of waiver of future premiums. This ensures that the policy benefits continue in case the policyholder in not in a condition to pay the future premiums.

4. What kind of deaths are not covered in life insurance?

There is no specific cause of death that is excluded in life insurance policy. However, death due to suicide in the first policy year or one year from the date of revival of the policy is excluded. In case of riders (Accidental Death Benefit, Disability Benefit or Critical Illness etc.), there are more exclusions. Policyholders are advised to look at the list of exclusions as provided in the terms & conditions in the policy document.