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Before understanding how you can prevent the claim rejections you must understand what are the various kinds of policies where you can invest. There are many types of Life Insurance plans where you can raise the claims.

You got three categories where you can invest and need to raise the claims. They are further bifurcated in many other plans customized as per the need of the person. These plans are as follows.

  • Term Plans
  • Endowment Plans

In all the above plans, claims can be raised differently. Before understanding their claim process you must understand what are the different kinds of plans.

Term Plans

The term plan broadly covers the risk of life. It is available at a very low cost and usually covers a huge amount of Sum Insured. Many Insurance companies are dealing with more than one term plan. The claimant can request for the claim at the time of the demise of the policyholder. These plans usually cover the death of the policyholder unless other riders are taken.

Riders can be an additional benefit taken from this plan. Few riders are like accident cover, disability benefits, critical illness, survival benefit rider, etc. In the case of riders, claims can be taken anytime during eventuality based on the type of riders purchased.

Endowment Plans

In the endowment plans, the policyholder gets some maturity benefits along with life cover. The claim arises in two situations during the death of the policyholder or at the time of maturity. The benefits of maturity can be availed after the policy term. In the case of the tragedy like the death of the policyholder, the claim needs to be raised. Getting the benefit of maturity is simple, the problem arises at the time of the claim of death. Some mistakes must be strictly avoided to avoid claim rejection. They are covered in the subsequent section of the article.


ULIPS are the market-linked plans where policyholder gets returns based on the markets. It is based on both the debt and equity concept. Policyholders can get the claims after the locking period.

These plans can be brought from an online comparison site conveniently. Some of the leading insurance players along with the plans are as follows.

Insurance Companies

Term Plans

Endowment Plan


ICICI Prudential Life Insurance


Saving Suraksha

Elite Wealth

SBI Life


Shubh Nivesh


PNB Metlife

Mera Term plan

Guaranteed Income Plan

Smart Platinum

Aditya Birla Sun Life Insurance



Wealth Max

Max Life Insurance

Online Term Plan

Partner Plus

Fast Tracker Super

Claim rejections are most common in Term & other Life Insurance plans involving the live coverage.

How to Raise The Claims in Life Insurance Policies?

To get the claims, you must read and understand the policy documents thoroughly. You can apply for the claims according to the plan that you have chosen. Claims can be applied online or offline. While applying for the claim you must avoid a few mistakes that can prevent the claim rejections. Usually claims rejection ratio is not too high but it can still be minimized further. You must understand the situations in which your claim can get rejected. You must try to avoid them so that you can save your investment amount. If the claims get rejected, all your Investment money will get wasted.

You must ensure that whatever claim amount you have raised should be settled with ease. If you avoid common mistakes then you can ensure the settlement of the claims with ease. The amount of claims that you can get is directly proportional to the amount of premium. Your total “Sum Insured” is also based on the premium paid for the policy. Someone paying a premium of Rs.1000 annually may get Sum Insured of Rs. 50 Lakh. If they wish to increase the amount of Sum Insured that their premium will increase accordingly. Policyholders need to pay the amount of premium after the regular interval selected by them. This interval can be monthly, quarterly, bi-annually or annually. Before even applying for the claims, the policyholder must know the premium that they need to pay and the total sum insured. The amount of premium gets accumulated over the years.

Claims can be raised at the time of the demise of the policyholder. To take the claim, the beneficiary needs to submit a few documents to the Insurance companies. If these documents are approved, then claims get settled within 30 working days or early. Payment is done through electronic transfer to the beneficiary account or through the cheque. There may be a few instances when the claim may get rejected. Usually, the reason for the rejection is some trivial mistake made by the claimant. These mistakes or blunders can be avoided by becoming aware of the same.

Why Your Claim Can Get Rejected?

On average, there are 2-3% claim rejections or pending claims in most of the policies. Usually, these claims rejection arises against the life risk. In other plans like ULIPS or any other market-linked plans, claims will be applicable only at the times of maturity. Chances of rejection in such plans may be less as no prior declaration related to the policyholder is required. These plans are more or less like an investment.

Most of the claim rejections arise in a term or any other traditional Life Insurance plans, where life risk coverage is extended. There may be a minor mistake that can lead to a loss of a huge amount. If the person’s claim gets rejected then all their efforts go in vain. It’s better to understand the common mistake trap that policyholders get into but can be easily avoided. These mistakes are as follows.

1. Hiding Important Details Related To The Policyholder

Insured must disclose all the required details to the Insuree. If important details related to his or her habits or illness are hidden in the beginning, then there are higher chances of claim rejection. The common habit that a person should not hide is their smoking habits. They must also disclose all the ailments that they are suffering from as well.
Some of the critical illnesses that can lead to the death of the person can be a heart attack, kidney failures, diabetes or any other deadly disease. Many Insurance policies may not conduct any medical tests while giving the policy. However if later on, the person dies because of smoking-related ailments or any other critical illness which they haven’t disclosed, can lead to claim rejections.

2. Delaying in Mandatory Documents Submissions

There are stipulated time within which the claimant must raise the request for the claim. They can’t raise the claim after that. The usual period of raising the claim is between 30 to 45 days. The grace period of 3 months might be granted. Beyond that, there may be higher chances of the claim rejection.

3. Submitting Inaccurate Documents

Documentation plays an important role in the processing of claims. The beneficiary must submit all the mandatory documents. These documents are thoroughly verified before processing of the claims. The document will vary based on the type of death. The claimant must know which documents to submit based on the specific case of the demise. Some of the cases have been highlighted below.

  • Case 1- Natural Death

In the case of natural death, documents required are as follows.

  1. Insurance policy document in original
  2. Claim form issued by the Insurance company
  3. Reason for the death
  4. Death certificate
  5. Any other document as required by the Insurance company
  • Case 2- Accidental Death

Documents required in this kind of demise are as follows.

  1. Policy copy in original
  2. Claim form issued by the Insurance company
  3. Reason for death
  4. FIR Copy
  5. Any other document as required by the Insurance company
  • Case 3- Death Due To Illness

Documents required in this case are as follows.

  1. Policy copy in original
  2. Claim form issued by the Insurance company
  3. Reason for death
  4. Hospital original bills
  5. Discharge summary
  6. Letter by the attending doctor
  7. Any other document as required by the Insurance company

4. Claiming Incorrect Amount

The beneficiary who is raising the claims must know the exact amount of Sum Insured. This can be demonstrated with the help of a case study of one of the Term plan.
Illustration: Sara is a 30 years old female who plans to take a term plan. She isn’t sure how much coverage she wants. She does a quick analysis based on the premium she needs to pay. This analysis is important as while taking the claims her beneficiary must be aware of these facts. This premium is taken from one of the online comparison sites of one of the leading Insurance firm.


Annual Amount of Premium

Sum Insured


Rs. 3,862

Rs. 10 Lakhs


Rs. 4,103

Rs. 25 Lakhs


Rs. 5,271

Rs. 50 Lakhs


Rs. 7,209

Rs. 75 Lakhs

Sara plans to take a cover of Rs. 75 lakhs. She needs to pay a premium of Rs. 7209 to buy such a plan. She chooses to make her husband as her beneficiary. She dies at the age of 35 years. Total premium paid by her till her demise is Rs. 36,045 for a period of 5 years ( from 30 to 35 years).sum insured analysis

Irrespective of the amount of premium her cover will remain the same in this claim. Her husband must raise a claim of Rs. 75 lakhs in this case. If he raises the amount less or more than there may be chances of the claim rejection. Policyholder along with their beneficiary must be aware of the exact claim amount to avoid such rejections.

  • The claimant is not the beneficiary
    There might be chances someone who is not entitled to get the claim has applied for the same. In such cases, there are 100% chances of claim rejection.
  • Policy Lapse
    One of the most important aspects of getting the claim is policy must be active. The policyholder must pay the premium regularly to ensure the policy remains active. If the claim is raised against the policy that is expired then there is no possibility of claim settlement.
  • Missing original policy documents
    One of the mandates to raise the claim is the submission of the original copy of the policy. At times claimant may attach a xerox copy which will not work. If original documents are not submitted on time, it can lead to claim rejections.
  • In the case of murder
    If the sum insured is high then there may be instances where the beneficiary may intentionally end the life of policyholder to get the claim amount immediately. Such claims are promptly rejected.
  • The delay from the Insurance company
    In some cases, there may be an intentional or unintentional delay from the Insurance companies. Such occurrences must be immediately escalated to the higher authorities within the Insurance companies. If they are unable to resolve it still, then it must be reported to ombudsmen. In such a situation there are 100% chances of claim settlement.

Avoiding common mistakes above, you can surely settle all your claims with ease.

Naval Goel is the founder of He is an Associate Member of the Indian Institute of Insurance`, Pune. He has been authorized by IRDA to act as a Principal Officer of Insurance Web Aggregator.
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