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Contesting a Term Life Insurance claim rejection

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23 Sep, 2020 by  Jeet

 A friend of mine lost his father 5 years ago. The death certificate mentioned a disease, I guess asthma, as the cause of death.

The friend's family has no recollection whatsoever of the insured having asthma or taking any regular medicines. They suspect that the doctor played some mischief.

The insurance company rejected the claim on basis of misrepresentation, as the proposal form didn't have any mention of asthma. The family accepted it.


All this was 5 years ago. He intends to contest this rejection. What would you all suggest his best options would be?

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Term Life Insurance

3 Answer

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23 Sep, 2020

Hey Jeet,

A few points to consider:

1. The rejection is very old. I think you get about one year to contest an undesirable claim outcome.

2. Seems the rejection was based on doctor's letter. What is your evidence to contest the rejection? Merely a complaint without backing it with evidence to prove wrong-doing will not help you win.


Anuj Jindal

Co-founder

SureClaim

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23 Sep, 2020
Jeet
Hey Anuj, Thanks for taking the time out to answer my query. It's a legit question, the second one. But before that, I just wanted to understand if he would be able to contest the claim after 5 years? Is there a set policy guideline on this by the IRDA? Appreciate your inputs
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23 Sep, 2020

This is a tricky problem. We will come back on this.

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23 Sep, 2020
Jeet
Sure, I'll be standing by
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27 Sep, 2020
Jeet
Any breakthrough on this?
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30 Sep, 2020

Hello Jeet,


Apologies for the delayed response.


Here's what we have found out is the process of rejecting a claim for misrepresentation:


  1. Life Insurance companies cannot reject life claims arbitrarily, only on the basis of what is mentioned on the death certificate. Every claim has to go through a detailed investigation through external professional investigators before it is declined for misrepresentation of facts.
  2. Even in case, the insurer does find that there was a misrepresentation - it first needs to validate whether the application would have been rejected or premium hiked at the time of buying the policy, in case they had information about Asthma. (Also find out if there was a medical exam conducted when buying the policy - do let us know the details of the product in question and the sum assured and we can let you know about this)


Contesting the claim:

Having said that, as far as we know there is no time barrier that restricts you from contesting the rejection, you can take recourse through the grievance process, starting with writing to the grievance cell of the insurance company. Finally, remember you will need to have solid evidence to prove that the person in question did not have Asthma [and] enough reasons why you did not contest this claim rejection earlier.


Hope this helps.


Regards,

Team Beshak

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