Why Claims get rejected?

Common Reasons Why Life Insurance Claims Get Rejected?

Life insurance claims may be rejected due to non-disclosure, policy lapse or incorrect documents.

Written by : Knowledge Centre Team

2025-12-24

4928 Views

6 minutes read

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Being the only breadwinner for your family, you may understand the financial impact of your untimely demise on your family. With awareness and adequate planning, however, you can minimize the effect of financial instability on your loved ones. Life insurance plans serve as a robust safety net for your family. If anything were to happen to you, your loved ones can file for a life insurance claim and receive a significant amount of money as an insurance benefit, which will help them pay off any outstanding debts and support their life goals in your absence.

There are instances; however, wherein your efforts may be in vain because the insurance claim may get rejected. Life insurance companies may reject a claim after it is deemed to be falsified or improper.

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Here are various reasons that may result in your life insurance claim getting rejected

False Information:

Life insurance policies are based on mutual trust and proper disclosures between the policyholder and the insurance company. In case, the policyholder decides to conceal any information, even if seemingly trivial, this can lead to insurance claim rejection. For example, there are instances wherein individual’s hide their lifestyle habits such as smoking and drinking at the time of purchasing life insurance.

Doing so may lead to reduced insurance premium payable at first, but it may also lead to your insurance claim getting rejected. Other oversights that may lead to claim rejection include false information about your age, weight, and inflated annual income. You must be honest and alert while filling out the application so that later on, your loved ones may not have to deal with claim rejections.

Timely Payment of Premiums:

When you purchase a suitable life insurance cover, it is only the start as you have to keep on paying the premium amount on time, throughout the agreed premium payment tenure. Doing so, helps you keep your end of the bargain and minimize any chances of claim rejection later. Even if you miss paying a premium, you have an option to pay it within the grace period, without damaging your insurance coverage.

Otherwise, if you do not pay your premiums, the insurance company may consider your life insurance policy as lapsed and deny any claim towards it. To avoid such an instance, you must ensure the timely payment of premiums.

Nominee Details

The nominee details provided by you (as the policyholder) are crucial because it is your nominee only who receive the insurance benefits in your absence. Insurance companies may reject a claim if there are no nominee details filled or updated in the application. You may have purchased the life insurance policy early in your life and have named your parents as nominees.

After a few years, if you fail to update the nominee details and your parents are not present to file the claim, the chances are that the insurance policy may get rejected. Hence, it is crucial that you keep your nominee details up to date.

Contestability Period

Most life insurance companies insert a contestability clause in their life insurance plan. According to this clause, if the demise of the policyholder happens shortly after the insurance coverage commences, the insurers may reject the claim. The contestability period comes into play immediately after the purchase of the policy. Usually, this clause may range between one or two years.

Cause of Death

Similar to the contestability clause, most life insurance companies have an exclusion list comprising various types of deaths that are not covered under the life insurance policy. For example, the life insurance claim may get rejected if you (as the policyholder) participate in any hazardous activities or sports, or if your demise occurs due to a pre-existing health condition. Other types of deaths such as those due to natural disasters, homicides and terrorist attacks are typically not covered by life insurance policies.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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