Claim Rejection: Reasons and How to Contest

Insurance claim rejection is the worst financial surprise a family faces. 5-8% of life insurance claims are rejected. Most rejections cite "non-disclosure" or "misrepresentation." But many rejections are wrong or disproportionate. Every rejection can be contested, at the insurer level, then IRDAI ombudsman, then consumer court. Know the process.

Top 5 reasons insurers reject life insurance claims: (1) Non-disclosure of pre-existing disease at time of proposal. (2) Misrepresentation: occupation, income, lifestyle habits (smoking, alcohol) under-declared. (3) Policy lapsed, premium not paid and grace period expired. (4) Claim within exclusion period (suicide within 1 year, adventure sports without rider). (5) Fraudulent claim, staged death or fake documents. Section 45, the 3-year rule is your strongest weapon: If policy is more than 3 years old from date of risk inception (not issue date): insurer CANNOT reject on grounds of non-disclosure or misrepresentation. Section 45 is absolute. Many wrongful rejections on 4-5 year old policies are legally invalid. Insurer knows this, a CA-backed legal notice citing Section 45 often results in quick settlement.