Insurance Claim Rejection Reasons
InsuranceInsurance claims are rejected primarily due to: non-disclosure of material facts at policy issuance, policy lapse due to non-payment of premium, claim outside the policy terms, and fraudulent claims. Understanding rejection reasons helps ensure valid claims are settled.
In detail
Common life insurance claim rejection reasons:n1. Non-disclosure: not declaring pre-existing illness, hazardous occupation, tobacco use, existing policies at proposal stagen2. Policy lapse: premium not paid, policy lapsed before deathn3. Death within suicide exclusion period (1-2 years for most policies)n4. Death due to exclusion (specific war, illegal activity exclusions)nnHealth insurance claim rejection:n1. Pre-existing disease claimed within waiting period (2-4 years)n2. Non-disclosure of pre-existing conditions at inceptionn3. Claim for excluded procedures/treatmentsn4. Hospital not in network (for cashless claims)n5. AYUSH treatment claimed under allopathic policynnProtection after 3 years: Section 45 of Insurance Act protects life insurance claims after 3 years -- insurer cannot reject solely for non-disclosure after 3 years unless they prove fraud.
Real-life example
Rohit's family's Rs 1 Cr claim was rejected: he had not disclosed his Type 2 diabetes at proposal stage. He died of cardiac arrest after 2 years. Non-disclosure of material health information. Had the policy been 3+ years old: Section 45 would have made it very difficult to reject. This illustrates why honest disclosure matters -- and why buying insurance early protects your family.