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What to do When a Life Insurance Claim is Rejected?

If your claim is rejected, the insurance company must give you the reasons for rejection. You can find out why your claim was refused. Insurance companies are required by the IRDA to give reasons for rejecting a claim and the number of claim rejected.

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What are the Term Insurance Claim Rejection Reasons in India?

The complaint and response letter of the life or term insurance company can be used to find out the reasons why your claim has been refused. More straightforward disputes may be resolved, or incorrect decisions may be overturned when the matter is considered from a fresh perspective. You may also be given a more detailed explanation of the reasons behind the original decision and understand why the claim had been rejected. 

Here is a list of top reasons for life insurance claim rejection in India: 

  • Policy Lapsation: Premiums are to be paid on important, timely premium payments that will help your policy remain active and cover the policyholder. Most Insurance companies do provide a grace period of 15 or 30 days, depending on their preferred mode of premium payment.

  • Insufficient Conditions: Understanding what is term insurance is essential as it can help avoid insurance claim rejection. Generally, claims are refused by the insurers due to the policyholder not fulfilling the legal conditions.

  • Suicide Clause: In certain cases, the insurer or company will refuse to pay the insurance amount. This mainly happens in cases where suicide within a specified period is an exclusion under the life insurance. The insurer may refuse to repay the life insurance claim on the suicide of the life assured within a specified period, generally 1 year.

  • Proper Nominee Details: Proper documentation is one of the primary reasons that an insurance claim could be rejected. The following points should be covered & all paperwork should be duly made in writing and duly signed by the nominee, 

    • Name of the insured 

    • Policy number 

    • Date of death 

    • Cause of death

  • False or non-disclosure of Information: Violation of good faith, top insurance companies enter into long term contracts with their clients. Hence, it is important that accurate data regarding age, health, financial conditions and other aspects are provided at the time of filling out the policy forms.

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What to do if Insurance Claim is Rejected?

In case of a claim rejected by the insurance company, the insurer needs to provide a valid reason for it. However, there is a list of things the nominee can do to ensure claim settlement. To begin with, one has to follow a set of procedures. First and foremost, get the death certificate of the insured as early as possible and provide it to the insurer. Call up your insurance representative and ask for his assistance to get all necessary documents filled out accurately. Your agent can act as an intermediary between you and the company. In case you don’t have an agent contact the insurance company directly. Submit a certified copy of the death certificate to your insurance company. Once this is done, a settlement is issued shortly.

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How to Avoid Life Insurance Claim Denials? 

If you or someone you care about has life insurance, there are a few things to do to make sure everything goes smoothly when the time comes to claim it: 

  • Set up automatic payments so you don't miss a payment and lose your coverage. 

  • When you get the insurance, be completely honest about your health and hobbies. Don't hide anything.

  • Keep your policy info up to date. After big life changes, update who gets the money and make sure their contact info is right. 

  • Tell your beneficiaries that you have life insurance, show them where to find the paperwork, and explain how they can claim the money. 

Final Thoughts

A life insurance claim rejection can impact not only the policyholder’s life but the nominee’s life as well. In case of a maturity claim rejection, the policyholder can lose their retirement money, whereas, in case of a death claim rejection, the family may financially suffer in the absence of the policyholder. Therefore, it is important that you avoid all the reasons for life insurance claim rejection and are aware of what to do in case your life claim is rejected.


  • Q: Can Insurance company reject claims?

    Ans: Yes, insurance company can reject claims if they find the information provided by the policyholder as wrong or false. However, you can avoid your claim rejected by ensuring you provide all the correct information and update all the personal and nominee details on a regular basis.
  • Q: What are the top 5 term insurance claim rejection reasons?

    Ans: The top 5 term insurance claim rejection reasons are as follows:
    • Lapsed policy due to unpaid premiums
    • Insufficient details provided to the insurer
    • Suicidal death during the exclusion period
    • Proper and updated details of the nominee
    • Provided false details and information

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