Choosing an insurance plan is a long-term commitment and should be done after careful deliberation. When buying term insurance, you expect the benefits that come from it to fulfil your family’s needs and keep them financially stable.

These dreams you may have for your family may be shattered if the term plan’s death claim made by your nominee is rejected for any reason. To better understand the reasons why death claims on your term insurance plan may be rejected, it is also important to understand the process of claiming the death benefit.

Term Insurance and Claim

The primary benefit offered by term insurance plans is the death benefit. If the life assured passes away during the policy tenure, their nominee can start a process to receive the sum assured of the plan as the death benefit. This benefit enables the best term insurance plans in India to keep their consumers financially secure. You can use a term insurance calculator to get an estimate of how much premium you will need to pay for your desired sum assured and plan duration.

The process to collect the death benefit starts with a death claim. The nominee is required to inform the insurance provider of the death of the life assured, and the details of their passing. They may be required to attach relevant documents, if necessary. Once the insurer receives this, they should issue a death claim form to the nominee, which they can fill up and return to the insurer. If all details are in place, a death claim may be approved, and the death benefit will be issued.

Ways to Avoid Death Claim Rejection

There are some cases where death claims are rejected, and the nominee is unable to receive the death benefit. Let’s take a look at some of the reasons why your term insurance plan death claim may be rejected, and how these possibilities can be avoided.

  • Death not covered by plan

It is essential to be aware that not every term insurance in India covers all types of deaths. For example, policies may not cover suicides (in the first twelve months of the policy purchase), murder of the life assured by a nominee, and death that has occurred under the influence of drugs or alcohol. These details may vary slightly across policies. It is best to consult the term insurance policy document or an insurance advisor when buying the plan.

  • Lack of nomination in policy

Nomination is one of the most significant aspects of the policy. By naming your term plan nominee, you declare the name of who you deem most suitable to take charge of the amount that will come from your policy. You can also change the nominee when the policy is in force. However, if there is no nomination at the time of the death of the life assured, it may lead to issues with the death benefit. Your insurer may ask your beneficiary to prove themselves as your legal heir.

To ensure smooth processing of death benefit into the right hands, ensure that you named your nominee in the policy document.

  • Policy lapse

Failure to pay the premium on time is one of the few reasons a term plan may lapse. When a policy lapses, it means that the benefits it is supposed to offer may cease to exist, and the policy may be considered void. There may be ways to revive a lapsed policy. Thus, it is important to ensure that your policy is in force and your premiums are being paid on time.

  • Incomplete or inaccurate information provided

When you choose the best term insurance plans for yourself, it is also your responsibility to provide accurate and complete information to your insurance provider. Failure to do so will lead to your death benefit claims, as well as any other policy benefits, being rejected.

Apart from these reasons, also ensure that your nominee is well aware of your term life policy. In case your nominee is a minor, you will be required to name a guardian. In this case, all people involved should be informed of your policy and know about your policy documents.