25 November 2023

Term Plan Death Claims are Often Rejected, why?

Term Plan Death Claims are Often Rejected, why?

Death Claim of Term Plan is rejected, why

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When you buy a Term Insurance Policy, you have the peace of mind that you have got great Risk Cover by paying a low premium. But think once and see what will happen if after your death your nominee does not get any benefit from the Term Insurance and the premium deposited by you is also not returned.

Many times it has been seen that the customer's nominee does not receive any payment from his Term Insurance Plan. Therefore, if you have purchased a Term Insurance Plan, then you must know in which situations the payment from the Term Insurance Plan is not received.

Therefore, in this article of Jeevan Bima Bazaar, it is being explained in detail that if you are planning to buy a term insurance plan or you have already purchased a term insurance plan, then what are the reasons When the Insurance Company does not accept the Death Claims.

Due to Presentation of Wrong Information-

A Term Insurance is the result of an agreement between two parties. In which one party is the Life Insurance Company and the other party is the insured (ie the person who is buying the Term Life Insurance Policy). Under this agreement, the insured has the assurance that if he dies within the Policy Term, the Life Insurance Company will pay the Sum Assured to his Nominee. Due to which he is ready to pay the Premium.

At the same time, under the same agreement, the Life Insurance Company also trusts the insured that the insured will deposit the premium till the end of the Policy Term and will submit correct information about himself in the Proposal Form i.e. Application Form to determine the Premium and will present the Necessary Evidence.

A Term Life Insurance Plan is provided based on the Age, Medical History, Lifestyle Habits, Income and Occupation of the Insured and the Premium of his Term Life Insurance Plan is alos determined on this basis. Many times it has been seen that in the greed to save Premium or buy a policy, the insured hides some important facts.

Now if at the time of Death Claim the insurance company finds that the insured has declared any wrong or incomplete information while purchasing the insurance policy, then it can reject such Death Claim.

To avoid such a situation, the insured should present true and complete information about himself while filling the Proposal Form before purchasing the policy and whenever necessary, present appropriate and correct evidence.

In case of Non-Payment of Premium-

If the insured does not pay the premium of his Term Insurance Policy and dies, in such a situation the Life Insurance Company does not accept his Death Claim. In Term Insurance Plans, the Death Claim is paid only if all the Policy Premiums are fully paid on the Date of Death.

To avoid any such situation, the insured should keep paying the premium of his Term Insurance Policy on time. The insured should mark his calendar to remember the Premium Due Date. If you frequently forget the Premium Deposit Date, you can also avail ECS or NACH services.

Hiding or not Disclosing Medical information-

Any Life Insurance Company, while issuing a Term Insurance Plan for an insured, wants to know in detail the present and past Health History of the insured and his family. On the basis of this health details, the Life Insurance Company decides whether to sell a Term Life Insurance Policy to the insured or not.

Apart from this, while determining the premium for Term Insurance Policy for the insured, the Health Issues of him and his family members are also studied. If the insured intentionally or unknowingly hides such information completely or partially, the Death Claim of his policy may be cancelled.

Not Giving Information About Old Insurance Policies-

In case of Term Insurance Policy, the insured should submit the information of all the existing Life Insurance Policies on his life to the Life Insurance Company.

This is also the basic basis for issuing a Term Insurance Policy. Therefore, even if the insured does not submit information about his old Insurance Policy, the Death Claim of such policy may still be cancelled.

Reasons for Participating in High Risk Sports-

If the Death of the insured occurs due to involvement in any High-Risk Sports, the Life Insurance Company may reject such Death Claims.

Biking, Paragliding, Car-Racing and other sports are classified as High-Risk sports by the Life Insurance Company and due to participation in such sports, the insured becomes victim of an accident and as a result of this accident he dies immediately. Or if it happens after some time then the Insurance Company rejects the Death Claim.

Therefore, before buying a Term Insurance Policy, you must get information about which sports the life insurance company has categorized as high Risk Sports.

Reasons for Suicide-

If the insured commits suicide in the first year of issue of the Term Insurance Policy or within one year from the date of revival of the term insurance policy, then the Death Claim of such policy is cancelled.

Due to Smoking and Drug Abuse-

If the death of the insured occurs due to drug consumption, the insurance company can also cancel such death claim. However, while filling the proposal form for a term insurance policy, there is an option to choose a policy with smoking or without smoking.

If you are considering buying a Term Insurance Policy and you consume any type of intoxicant, then you must get special information on this subject before buying the Policy. This information should be relied upon in the written documents issued by the Insurance Company. Apart from this, your habits should be described in detail in the Proposal Form.

Reasons for Murder-

If the death of the insured is due to murder then the Insurance Company can also reject such Death Claim. However, in all cases a claim arising out of death caused by murder is not extinguished.

If the insured is involved in any unconstitutional act or crime and as a result it is proved that the insured is killed in response, such Death Claims are rejected by the Insurance Company.

If the Nominee mentioned in the Term Insurance Policy or his other dependents kills the insured due to any kind of greed, in such a situation also the Insurance Company can cancel the Death Claim.

Due to War or Riot -

If the insured is involved in any war or riot and due to this he meets with an accident. Due to such an accident his death occurs immediately or after some time. Even then the Insurance Company may reject the Death Claims.

If you are serving in the army, police or other security department, then you must get detailed information in this regard before buying a Term Insurance Policy.

Download File:

If you are a Life Insurance Agent and you want to give information about Term Insurance to Your Customers, then you can download the files below. These files can be used to meet personal needs. Here the information of Term Insurance has been given for Image Presentation, One PDF file Presentation, Second PDF file for Print and PPT Presentation File.

You can use all these files after downloading the button below. However, before using our files, you must read the term and condition file carefully. The information about the term and condition is given in the download folder in PDF format.

Term Insurance Info File 21.6 MB

Due to Natural Disaster or Epidemic-

If the death of the insured occurs due to any Natural Calamity like Flood, Storm, Lightning etc. or due to any epidemic. The Life Insurance Company can also cancel such Death Claims arising under the Term Insurance Policy.

Due to Delivery-

If a pregnant woman buys a Term Insurance Policy and she dies due to complications arising out of pregnancy or during delivery, the Life Insurance Company may also reject such Death Claim.

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