Repudiated Life Insurance Claim .
Life insurance is a critical financial tool that provides financial security and support to
families in times of unforeseen circumstances. However, the issue of repudiated life insurance claims has become a concern in India, affecting the trust and confidence of those policyholders who were innocent and had given genuine declarations at the time of proposal. Following are possible
reasons behind repudiated claims and suggests probable ways to address this issue.
Reasons for Repudiated Claims
- Non-Disclosure of material information by policyholder:
Many claims are rejected due to policyholders withholding critical information knowingly or unknowingly during the application process, leading to a breach of trust between insurers and customers.
- Fraudulent Claims:
Instances of fraudulent claims, where policyholders or beneficiaries provide false information or manipulate circumstances, contribute to the repudiation of claims.
- Policy Lapses:
Failure to pay premiums within the specified time can result in policy lapses, leading to claim denials when the insured event occurs
- Exclusions and Conditions: Lack of awareness about policy exclusions and conditions often leads to claims being denied when the circumstances fall outside the coverage scope.
Addressing the Issue:
- Consumer Education:
Consumer Education: Initiatives to enhance consumer awareness about the importance of accurate disclosure,
policy terms, and conditions can reduce instances of repudiated claims. Insurers are focussing on educational campaigns
to inform policyholders about their responsibilities and rights but due to vast sociological and economical gaps it's not
reaching to the grass root level.
- Transparent Communication:
Insurers are communicating policy terms and exclusions clearly and transparently. Ensuring that policy documents are written in simple language can help policyholders better understand their coverage, reducing the likelihood of unintentional non-disclosure but due to it's complexity of language, paucity of time and consumer’s
inability to comprehend it in totality results in disadvantage to consumers.
- Grievance Redressal Mechanisms:
Regulator and companies have established effective grievance redressal mechanisms within insurance companies and regulatory bodies. This ensures that policyholders have accessible avenues to dispute claim denials and seek resolution.
What needs to be done :
Addressing repudiated life insurance claims in India requires a multi-faceted approach involving increase in knowledge of intermediary about the basis of selection of lives while selling insurance and his role and responsibilities, consumer education, transparent communication, technological integration, and dissemination of knowledge of grievance redressal mechanisms to the consumer. By implementing these measures, the insurance industry can inculcate trust, enhance customer satisfaction and ultimately fulfil it’s
fundamental purpose of providing financial security in times of need.
So if your life insurance claim is rejected/repudiated and you feel that it
needs further consideration and your are not aware whom to contact or what to do then get in
touch with us with following documents
- All letters including last letter issued by the concerned company asking for requirements
- All Claim forms submitted to insurance company
- Copy of policy bond .
- Claim rejection letter issued by the concerned life insurance company.
