Why Might A Life Insurance Claim Get Denied?

There aren’t many instances in life insurance firms denying Life insurance coverage, it’s important to know what could cause a claim to be disputed. In this article , we’ve listed the most common reasons why you may encounter a denied life insurance claim.

Not disclosing medical conditions and Lifestyle Information

When you buy life insurance it is essential to disclose any medical condition or other risk aspects. If you do not provide exact information in the application procedure, any claim made on your life insurance policy might be denied in the future.

In the event of a failure to disclose certain details when purchasing an insurance policy for life could be considered to be a false representation. This could result in a inaccurate or false statement(s) or a denial of details. In certain cases the misrepresentation may mean that an issue is made that could have been rejected otherwise.

The majority of policies have an option to contest the policy (usually between 2 and 3 years) where the insurance company can require additional information about the cause of death. It could take the form of medical or post-mortem records that allow the insurance company to determine if any information was not disclosed during the application procedure. If the insurer discovers any evidence of fraud, the policy could be canceled and your beneficiary could not be able to receive a death benefit. Be aware the fact that insurers have ways of confirming the information you submit in an application.

What type of information will insurance companies require me to give in a life insurance application?

Be aware that you must get the application to purchase life insurance direct from the insurance provider (or the providers). It is crucial to read your application’s details and then contact the insurance company immediately when you find that any information that is not correct or complete. Make sure to check your questions and answers to your application to help you identify any mistakes before it’s too for you!

The risk of not living out a “Term” Life Insurance Policy

If you’ve got the term insurance for life, it may be able to outlive the term of the policy which means there will there would be no death benefit payment.

If you need a greater amount of coverage, the insurance company may permit you to renew the policy (at the cost of a higher cost) after you reach the expiration date of the policy. You might also be able to change a term life insurance policy to a life insurance policy with a certain time period to do this. You should be aware of the dates and conditions of your policy when you’re considering changing it.

Suicide by Death

Life insurance policies typically come with suicide clauses that typically lasts up to 24 months dependent on the insurance company. If suicide occurs within this period the insurance company generally won’t make an award (please look through your Key Features Document of your preferred insurer for further details on this).

Making an Life Insurance Claim

In order to ensure a smooth claim process, make sure you inform your family that you have an insurance policy that covers life, and where it can be found in the event of a claim. It is generally best to keep the policy along with other documents that your beneficiaries might require, and keep in mind when preparing your estate. Being organized can go a long way.

Being in the Know

It is important to understand the distinctions between two types of life insurance. These are the ‘term’ type of life insurance as well as “whole-oflife” insurance.

“Term” life insurance policies have a set duration (known as the “term” of your policy) for example. 10, 15, or 25 years. However, they only payouts are made if you were to die within the time frame of your policy. There is no lump sum to be paid at the expiration of the policy.

Whole-of-life insurance policies pay out no matter your death date, as long as you continue to keep up with the premiums.

Of course they are more costly than traditional insurance policies because the length of time you continue paying your premiums, the insurance company will continue to pay, while you might not live to the end of a time-based insurance.

TIP The whole-of-life insurance policy is called life assurance by a number of insurers.

One of the major benefits of whole-of life insurance is the ability to assist your family members with any costs related to inheritance tax. It may also appeal to those who are aiming to leave a certain type of inheritance to loved ones or assist with funeral expenses.