The final stage of insurance is claim settlement. It is the stage at which the beneficiary gets the assured sum or the maturity amount. But, sometimes, the insurance claim gets turned down, and it is very frustrating when this happens. You should ensure that you have followed simple steps, such as linking your policy with Aadhaar, furnishing correct details, filling up the form accurately, and so on. Read on to find out about how to prevent rejection of an insurance claim.
Additional Read: How to get your digital health insurance claim done online?
Simple and Best Ways to Avoid Rejection of an Insurance Claim
Do Not Hide Any Information
It is essential to reveal all the information to the insurer without hiding. Common reasons for claim rejection are non-disclosures, partial disclosures, or wrong disclosures of important facts, such as:
- Age
- Type of the job
- Monthly income
- Smoking and drinking habits:
- Major ailments
- Hereditary diseases
- Pre-existing medical conditions
- Existing insurance policies
It is extremely important to be transparent and reveal all the information in an honest manner. At the time of insurance claim, if the information provided by the person to whom the benefits are going to be paid does not match with the facts declared at the time of filing claims, then the insurance claim will be repudiated. It is mandatory to alert prospective customers and people who apply for the policy that all the details must be furnished. Insurance is governed by underwriting principles, which is based on the details provided by the policyholder.
Do Not Entrust Documentation Work to Agents
There are two steps involved in finalizing an insurance plan. They are:
- Researching thoroughly to find out the features, pros, and cons of insurance plans before choosing one.
- Perusing through the documents which explain the terms and conditions of the insurance policy. Understanding the terms and filling up the application form thereafter.
Often, people feel exhausted after exploring the best policy. So, they delegate the work of filling the application form to agents. This is not right because agents may disclose wrong or partial information. They may not be really meticulous about filling forms.
Inform About Pre-Existing Policies to the Insurer
A person may have a set of pre-existing insurance policies about which he must inform the insurer. No matter how large or small the sum insured is, people must let their insurer know about it. Otherwise, it will lead to rejection of the insurance claim. Many people overlook this. This is very important as it is directly correlated to the medical history of the proposer. Based on this, the proposer decides whether to issue the policy. The amount of premium to be charged is also decided based on this.
Don’t Add Extravagant Expenditures to the Bill
In the general insurance sector, motor and health insurance claim rejections are high.
Health Insurance:
Hospitals perform unwanted medical procedures on patients in order to make money. But, these are unnecessary, and the customer agrees since he believes that he can meet these exorbitant costs by making an insurance claim. But, this belief is broken when the claim gets rejected.
Motor Insurance:
The motor insurance claim gets declined because customers add repair charges as well to the bill. The insurance company investigates the enormous bill amounts and rejects the claim of the customer when it comes to know of the unwanted expenditures.
Do Not Allow Policy Lapse
Paying the premium periodically on or before the due date is necessary to maintain the validity of the insurance plan. Insurance companies however offer grace time for a few days in case you fail to pay the premium on time. Claims are accepted only if the policy is renewed within the grace period. Also, when you make a claim and the policy is invalid, no claim will be paid. Thus, renew the policy on time.
Mention the Nature of your Profession
Some professions carry huge risks. For example, firefighters and people who work in mines are likely to encounter life-threatening situations. In that case, it is prudent to mention the nature of your job to the insurer in order to avoid problems in the future.
Omissions
People often do not scrutinize and comprehend the policy documents. They miss exclusions under insurance claim rejection and make the claim without knowing. For instance, some of them could be suicide, excessive drugging, accidents due to intoxication, and so on. Insurance claims do not consider death under these circumstances as valid.
Life Insurance
Life insurance is a very essential and important insurance. It aims to offer consolation to bereaved families when they lose the insurer due to some unfortunate circumstances. So, why do life insurance claims get rejected, and what are the simple ways to avoid them? Here are some of the best ways to prevent them.
- Do not conceal information
- Timely payment of premiums
- Keep nominee information updated
- File the insurance claims on time
- Cooperate with medical examinations
- Thoroughly Scrutinize the Policy Documents
Additional Read: Guidelines for choosing a life insurance plan
Conclusion
Keep yourself updated on all the information regarding your insurance policy. Stay alert and diligent. The guidelines above discussed by CreditMantri are the best ways to avoid rejection of an insurance claim.
FAQS How to Avoid Rejection of an Insurance Claim
1: What are some of the reasons for your car insurance claim to be turned down?Some of the reasons are:
- Car damage due to drunken driving
- Using private cars for commercial purposes
- Damage due to carelessness, such as parking your vehicle in the no parking area resulting in a collision with another vehicle and subsequent car damage
2: How to handle insurance claim denial?
Some of the tips to handle insurance claim denials are:
- Carefully examine all the alerts and notifications regarding the claim. It is one of the most important steps in claims processing.
- If your resubmitted claim is rejected and if you feel that it is wrong, then you can appeal against the decision.
- You have to submit and resubmit claims within the time specified by the insurance company or the laws pertinent in the state
- Be aware of the company’s appeals process before filing an appeal
- Maintain records on disputed claims
- Handling claims will help you in becoming aware of your insurance company’s expectations. You will avoid the repetition of the same mistakes again. However, if you continue to have insurance claim issues with a particular company even after you follow the stipulated processes, contact the state insurance commissioner’s office for assistance.
3: What are the top 4 ways to prevent medical insurance claim rejection?
- The front office data entry team should collect the necessary information with patience.
- A good understanding of all terms and conditions under which the claim should be made.
- Use an automated EHR/EMR to manage bills and claims.
- Use technology and analytics for the management of denials.