The grief of losing a loved one is incomprehensible. Though one cannot prevent death, the best you may do is financially secure your loved ones through a term insurance plan. Term plans, a popular type of life insurance, is a pure risk plan, which offers coverage for a certain timeframe. In case of an unfortunate event of death during this term, the insurer offers the pre-determined sum assured amount to the beneficiary. This amount acts as an income replacement and may be used by your family members, to meet various goals and obligations. However, if at the time of making claims, you are not able to reap the benefit of your plan, the whole purpose goes in vain. It is, therefore, necessary to understand the reasons for claim rejection and take the essential steps to prevent it.

Following are five reasons for term insurance claim rejection.

1. Incomplete or inaccurate disclosure

It is imperative to provide correct information as required by the insurance provider. Not being honest or failure to maintain transparency may result in your claim getting rejected. For this purpose, you may give accurate information about your height, age, weight, annual income, current policy details, occupation, or any other details asked in the application form.

2. Failure to disclose the nature of your job

While some jobs are sedentary and carry minimal risks, others are highly risky in nature. Some high-risk jobs include firefighters, roofers, iron and steel workers, or mineworkers, among others. The nature of such jobs must be communicated to the insurance provider at the time of application. In case the insurer has a reason to believe that such information was withheld from them, they may reject your claim.

3. Failure to make timely payments

To continue enjoying the benefits of a term insurance plan, it is imperative to make a timely payment of premiums before or on the due date. Most insurers offer a certain grace period even after the due date. Failure to make premium payment during the grace period will result in your term policy being lapsed. Therefore, you may take utmost care to make timely payments of your premium, and remain secure against any untoward event.

4. Not undergoing medical tests

Some insurers mandate policyholders to undergo a medical test in case the sum assured amount is high. Besides, you may be asked to give a medical test based on the information provided in your application form. Ignoring these tests increases the chances of a claim rejection.

5. Not revealing information about your existing insurance policy

Another tip on how to avoid claim rejection is to declare all your existing insurance policies. Some individuals are often unaware of the policy declaration rule and hence do not find it necessary to reveal information about their old term insurance policies. Faltering on this rule may result in a claim rejection.

Failure to do your due diligence may result in you losing out benefits of the term plan. You may, therefore, keep the aforementioned insurance policy mistakes in mind, and be transparent and honest while filling out the application form. By doing so, you may be assured that the claim will be settled, thereby allowing your family to be financially secure even in your absence.