Can life insurance claim get declined?
Why would a life insurance claim get declined? Do I need to be worried?
You buy life insurance as a safety net for your loved ones if you should die. However, there are some instances life insurance claims are denied. If you follow the rules, there is no need for you to worry that your family’s future is not protected.
When can an insurer decline a claim?
Before you start panicking, it is very rare for insurers to deny a claim, but these are their most common reasons for their rejection.
Can life insurance claim get declined?
1. Omitting details or lying on the application
Insurance companies take a big risk to insure your life, so they expect you to tell the whole truth in your application. Never omit to fill in certain questions on the application, even though they may seem like an invasion of your privacy. This information is necessary to properly assess the risk for the company, and lying is considered a breach of contract.
Since completing the application for life insurance correctly is important, you probably haven’t much experience doing this. Have it done by an experienced insurance agent, to make sure no unforeseen circumstances ever arise.
2. Your medical information is important
Don’t leave out the section about your routine medical check-up, even if the results came out clean. If you leave out this section, it might look like you were trying to hide something. Whenever you are unsure about any questions asked, especially in the medical section, find out before filling it in. Even an incorrect detail like when you last visited your doctor can prove significant later.
3. Timing is important to underwriting
Many creditor policies are underwritten when the life insurance claim is filed to help companies save the costs of underwriting when the policy is issued. However, this creates a problem for the beneficiaries because the application may not be rated or could be declined. Protect your beneficiaries by ensuring the underwriting is done at the time of the policy’s issue.
4. Your personal life insurance and your mortgage
If you have mortgage life insurance only, it is tied with your mortgage. That means a missed mortgage payment also constitutes a missed insurance payment. Any lapse on the insurance premiums is cause for cancellation, leaving you completely unprotected. There are also other ways banks protect themselves when it comes to covering your mortgage and paying out life insurance claims.
If you die within 2 years of buying the policy, they re-examine your health and lifestyle. They will also deny paying out if you died while committing a criminal offence. The best way to protect your life insurance is to have a personal insurance policy that isn’t connected to your mortgage.
5. Expired policy
At any time that you miss a premium payment, your policy can lapse. The best way to ensure it doesn’t is to have automatic payments. Also, pay attention to any notification sent out by your insurer.
6. Insufficient documentation
When the insurance company processes a claim, it needs to receive all the necessary documentation to process it. This includes the death certificate and the claim form. Even during this difficult time for the family, it is necessary to provide all this.
7. Suicide and life insurance
When an insured person commits suicide, the claim will most likely be denied. Nearly all insurers don’t payout within the first two years of issuing a policy, and some will not pay in the event of a suicide. It is always important to know the exclusions of your life insurance policy.
8. Other instances for denial
If a beneficiary or beneficiaries are implicated in the cause of death of the insured, then they cannot make life insurance claims. This is known as the slayer rule, and the accused doesn’t need to be found guilty beyond a reasonable doubt, the law only requires proof that the person was involved in the wrongful death.
Can life insurance claim get declined?
Final word
Your life insurance policy offers your family the security they deserve. Making sure life insurance claims aren’t denied at a time your family needs it most means you must make sure everything is done correctly. If a claim is denied, your beneficiaries should get help from an insurance expert.
An expert advisor is the best person to help you secure your family’s financial future and guide you to find the best life insurance type. A financial advisor or insurance agent will assess your financial needs, look at the existing life insurance policies you may have. They will find a way to cover all your life insurance needs within your budget.
The life insurance process during the covid-19 pandemic is done entirely online. Thanks to our expert advisers who are entirely comfortable with the online life insurance & investment platform, you can take advantage of their expert opinion about if nothing has changed by taking your age, and health, liabilities, and goals into consideration. At Apluswealth, you can get a quote, compare quotes, and find the life insurance quote you feel comfortable with. Our life insurance advisors will provide you with quotations and the most suitable policy types.
Contact our expert advisers today and find out which is the best life insurance for you.
Email: Contact@apluswealth.com
Tel: 1-888-461-6120