Insurance: These 5 mistakes of yours give the insurance company a chance to loot your money..

Taking an insurance policy is an important step for the financial security of yourself and your family. Whether it is health insurance, life insurance, or car insurance, we pay a premium with the confidence that we will get coverage when needed. But, sometimes it also happens that in difficult times our claim gets rejected, due to which we have to suffer a huge financial loss. There are some common reasons behind most of the claim rejections, which can be easily avoided. So let us know what the main reasons for insurance claim rejection are and easy ways to avoid them.

5 main reasons for insurance claim rejection:

1. Providing incorrect or incomplete information

What happens:

Providing incorrect or incomplete information is the most common reason for claim rejection. While buying a policy, people often misrepresent or hide important information related to their age, income, profession, or health (such as smoking or drinking habits).

Why is it rejected:
Insurance companies assess the premium and risk for you based on the information provided by you. If it is found in the subsequent investigation that you had hidden or given wrong information, then the company can reject the claim, considering it as 'misrepresentation'.

2. Not disclosing pre-existing disease

What happens:
While taking a policy, if you already have any disease (like diabetes, high blood pressure, thyroid), then it is necessary to mention it in the insurance application form. Many people do not disclose it due to the fear of an increased premium.

Why is it rejected?

So if you later claim for the treatment of the same disease, then the insurance company easily finds it out and can reject the claim directly. Many health insurance policies have a waiting period for pre-existing diseases, only after which coverage is available.

3. Delay in policy renewal

What happens:
If you do not pay the premium of your policy on time, then the policy lapses. Insurance companies usually give a grace period, i.e., some extra days to pay the premium.

Why it gets rejected:
If the death of the policyholder or any medical emergency occurs after the grace period and the policy has lapsed, the insurance company refuses to pay the claim.

4. Delay in informing the claim

What happens:
In the insurance policy, it is necessary to inform the insurance company within a stipulated time limit in case of a claim event (such as hospitalization or death). This time limit is usually 24 to 48 hours.

Why it gets rejected:
If you do not inform the insurance company on time without any valid reason, the company may reject your claim as it delays its investigation and taking necessary action.

5. Not understanding the terms of the policy

What happens:
Many people do not read the entire document while buying the policy. They often depend on the agent and are unaware of the terms and conditions of the policy.

Why it gets rejected:
Not every policy covers certain things. For example, there may be a specific waiting period for cosmetic surgery, war injuries, or certain illnesses. If you claim for a period that is not covered by your policy, it will be rejected.

Easy ways to avoid claim rejection

1. Fill the form carefully:
Always fill out your policy application form yourself and provide all the information (age, health history, lifestyle habits) honestly and correctly.

2. Read the policy document:
Read the policy documents carefully as soon as you buy it. Get complete information about coverage, exclusions, waiting period, and claim process.

3. Pay the premium on time:
To prevent your policy from lapsing, the premium must be paid on time. For this, you can set an automatic payment or a reminder.

4. Keep all documents safe:
In case of hospitalization or an accident, keep all documents like medical bills, reports, prescriptions and discharge summary safe, as these are required while filing a claim.

5. Give timely information:
As soon as the claim occurs, inform the insurance company or its third-party administrator (TPA) within the prescribed time limit.

So it is clear that most cases of insurance claim rejection can be avoided with the right information and a little caution. So by always being a responsible policyholder, you can not only get the right value of your premium, but also ensure financial security for yourself and your family in difficult times. (Note- The news is based on general information)

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.