One of the most significant and crucial components that make up modern life is a propitious life insurance plan. The importance of life insurance cannot be undermined. In fact, with the economic progress of the country, it is good to know that more and more people are steadily become aware of the significance of a proper life insurance plan.
However, what is equally crucial to assess is the apparent dangers one’s life insurance plan might find itself in leading eventually to its annulment. In fact, it is important to note that there are many otherwise commonplace situations that have the potential to jeopardize the prospects of a well heeled life insurance policy.
Top Reasons for Claim Rejection
Therefore, it is of utmost importance to thoroughly go through some of the common situations which might endanger a life insurance policy before actually deciding to okay it.
Death by Suicide
- One of the most common and fundamental reasons why a life insurance plan might get rejected is death by suicide.
- However, it should be noted that the suicide cases obviously count upon the type of insurance policy.
- For instance, until 2014, claim settlement was not provided if the insured committed suicide within one year of the commencement of the plan.
- One of the more rudimentary reasons why life insurance might get cancelled is the furnishing of incorrect information.
- It is very important to underscore the fact that while filling up the basic insurance form the prospective policyholder should reveal factual information.
- And therefore each time it is clearly mentioned to the prospective insured to not try to conceal anything for any reason whatsoever as it might lead to disqualification in the future.
- However, in spite of the repeated warnings, there have been thousands of such cases where the concerned policyholder has either withheld information or provided erroneous data.
- For instance, one of the most significant criteria whiling filing up the insurance form is the appropriate furnishing of medical documents in order to corroborate the factual medical history of the concerned insured.
- Most of the times, as has been found, people, for whatever reason, tend to provide wrong information or incorrect medical history. In such circumstances, it should be noted that the life insurance policy of the prospective policyholder stands liable to get cancelled. Therefore, one should be honest whiling filing up the form.
Smoking after Purchasing Policy
- One of the most significant details of a life insurance claim is that the life insurance premium is relatively higher for smokers compared to that of the non smokers.
- Before subscribing to a life insurance policy, the aforementioned criterion should be thoroughly noted and kept in mind.
- Most of the times it might happen that concerned insured begin to smoke after having bought a particular insurance policy.
- In such a case, it shall be the duty of the concerned policyholder to right away inform the concerned insurance company, as per the provisions of life insurance.
- However, most of the times people, ignorant of the fine print, tend to overlook some of the most basic clauses and fail to report the changes to the concerned insurance company.
- What happens in due course of time is that the concerned insured might develop some kind of life threatening disease, thanks to the change in his or her lifestyle habits after having bought the life insurance plan.
- In such a plight, if the life insurance company is not made aware, the company is liable to decline the claim payment.
Drinking while Driving
- One of the common menaces of modern life is the case of drunk driving. Most of the times people tend to drive under the influence of alcohol.
- In fact, a majority of road accidents, at least as far as India is concerned, takes place due to drunken driving.
- Already, it should be kept in mind, driving under the influence drugs or alcohol is punishable according to the Indian penal system.
- In such a case, a habitual drunken driving might land a person in irrevocable troubles. As far as insurance policies are concerned, one should be especially cautious.
- It is important to underscore the fact that if the insurance company somehow finds out that the concerned insured has been driving under the influence of alcohol, the respective insurance company is liable to reject the insurance claim straight away.
- It should be underscored that it is well within the rights of the insurance company to annul the life insurance claim in case it finds out that the concerned insured has been driving under the influence of alcohol.
- Therefore, it should be noted that one should be extra cautious regarding this clause.
Breaking a Law
- One of the most natural and evident grounds on which a life insurance company may withhold life insurance is the instance of breaking a law.
- In fact, it is important to underscore the fact that any insured should not be found wanting under the eyes of law.
- If any concerned policyholder is found to have broken a law, or vulnerable under the eyes of the official Indian penal system, or is found to have been engaged, directly or indirectly, in any act of crime, shall have his or her insurance policy rejected right away.
- Therefore, it is important to note that a prospective policyholder should be extra cautious regarding this particular insurance clause.
- In fact, most of the times the insurance policy gets cancelled if the prospective insured fails to reveal any of kind of criminal record whatsoever at the time of the filling up of the insurance form.
- Failing to correctly divulge any kind of criminal record or criminal history whatsoever shall automatically make the concerned insured susceptible to the eventual cancelation of his or her insurance policy.
- Therefore, it is of utmost significance not to have or engage with any kind of criminal ventures, before or after the purchasing of a life insurance policy.
Death outside the Country
- One of the more recognized situations where life insurance policy stands liable to get cancelled is such situation as death outside the country.
- It is important to be underscored that if the concerned policyholder is planning to settle or move to a new country, he or she should accordingly notify it to the concerned insurance company.
- According to the fundamental provision across insurance networks across the board, in order to claim settlement, the concerned insured or policyholder should notify the company where and when he or she plans to move.
- It should be kept in mind that the revelation of the name of the new resident country should be communicated to the concerned insurance company. Most of the times people might overlook this particular clause.
- The clause is especially significant in that it does not come with any kind of redundancy whatsoever for people planning to settle or move abroad. What is required of the concerned insured is to simply communicate to the company.
- Also, term insurance plans are valid in case of a change in the country of residence.
- No matter what the insurance company, it should be kept in mind that terrorism or activities remotely related to such escapades, whether in the country or abroad, are primarily not covered by insurance plans.
- Although there might be a handful of insurance companies that may provide cover for such situations, a majority of the insurance outlets, generally speaking, do not furnish cover.
- As far as terrorist activities are concerned, such situations or crises can be tackled on primarily humanitarian grounds.
- As far as the so called humanitarian grounds are concerned, it is generally refereed to situations when the concerned nominee contacts the IRDA.
- The rationale behind such a clause across a majority of insurance companies across the board is not very much clear. What is important to note is that the concerned insured should always make it a point to read the fine print before making claims.
- Most of the times terrorist victims are generally reimbursed by the concerned government on the basis of humanitarian grounds. The life insurance companies generally do not tend to involve in the reimbursement to nominees afflicted by terrorist escapades, so to speak.
- Yet another fundamental situation where the life insurance policy of a particular insured may get cancelled is the crises engendered by natural catastrophes.
- Most of the times, generally speaking, reimbursement to victims afflicted by common natural calamities such as floods, storms, tsunamis, hurricanes, earthquakes etc. are proffered by the concerned government.
- However, it is equally significant to keep in mind that as far as the fact of natural disasters not being covered is concerned, it is generally under the purview of the basic insurance plans.
- A majority of the basic insurance plans do not cover such calamities. Almost across the board, basic life insurance clauses do not include the criterion of natural catastrophes.
- However, it is equally significant to note that as far as the cover for natural disasters is concerned, the concerned insured may avail of add on plans.
- Insurance outlets, generally speaking, do provide basic add on plans in order to cover such crises as natural disasters. One should be cautious enough to choose such add on clause in order to claim reimbursement.
- There are generally no other means for claiming cover for natural crises under a basic insurance plan.
Engaging in Adventures
- Generally speaking, one of the common ventures while travelling includes the likes of adventure sports. For instance, people indulge in such ventures as biking, skiing, hiking among other things.
- However, it should be clearly noted that death due to participation in such adventure sports, whether in the country itself or somewhere abroad, is not covered under the basic insurance plan.
- Generally speaking, the particular clause is more or less the same across a majority of insurance outlets across the board.
- It is equally significant to note that there is no categorization as such so far as the adventure sports are concerned. Most of the times policyholders tend to categorize on flimsy basis in order to claim cover.
- It should be noted that irrespective of the type of adventure sport, insurance is generally not provided to the concerned policyholders.
- This is true across a majority of the insurance outlets. Death due to engaging in such ventures as biking racing or even car racing also do not translate to any kind of payouts whatsoever.
- Therefore, before sealing an insurance policy or insurance plan, this subtle clause should be thoroughly taken note of.
Instances of Homicide
- Generally speaking, it may happen the concerned policyholder is found to have been involved in any kind of homicidal escapades after having purchased the insurance plan.
- In such a case, if the concerned policyholder or insured is found to be involved in murder or any kind of criminal ventures, his or her insurance plan stands liable to be right away cancelled by the concerned insurance company.
- It should be noted that the insurance policy shall remain annulled until the concerned accused is able to prove against the charges as leveled against his or her person.
- Until the charges are dropped or the concerned nominee is finally acquitted by the court of law, his or her insurance plan shall remain in a state of invalidation.
- As far as the instance of homicide is concerned, it is equally true for situation before buying a particular insurance policy. As mentioned before, the prospective policyholder should make it a point to disclose his or her criminal records, if any.
- The cancellation of a particular insurance policy does not stand subject to the time period of a particular case proceeding in the court of law.
- The concerned insurance policy shall remain cancelled under the provision of insurance until the convict is officially acquitted by the court of law.