Compare Insurance Plans in Minutes

Term Insurance Claim Mistakes To Avoid - Ensure A Hassle-Free Payout For Your Family

Filing a term insurance claim should be simple - but even small mistakes can cause delays or rejection.

According to IRDAI, over 90% of rejected life insurance claims result from incorrect information or missing documents - not from policy disputes.

The good news? Every one of these issues can be avoided.

This guide explains the most common term insurance claim mistakes, why they happen, and how to ensure your family’s claim is processed smoothly.

If you’re a policyholder, fix these today. If you’re a nominee, use this checklist when it matters most.

Top Claim Mistakes And How To Avoid Them

1. Not Disclosing Health Conditions Honestly

Mistake: Hiding diabetes, blood pressure, or tobacco use to get a cheaper premium.

Impact: Claim can be rejected for misrepresentation.

Fix: Always declare your full medical history during purchase - even minor issues.

2. Incorrect Or Incomplete Nominee Details

Mistake: Wrong name, relationship, or missing ID.

Impact: Delays payout or transfers claim to legal heir.

Fix: Update nominee every time there’s a life event - marriage, childbirth, etc.

3. Policy Lapse Due To Missed Premium

Mistake: Forgetting to renew before due date.

Impact: Policy becomes inactive; no claim allowed.

Fix: Enable auto-debit, and renew within the grace period (15-30 days).

4. Filing Claim Late

Mistake: Claim filed months after death or event.

Impact: Delay verification, may trigger insurer investigation.

Fix: Nominee should file within 90 days of event - earlier is better.

5. Missing Or Unclear Documents

Mistake: Submitting incomplete paperwork.

Impact: Stops claim processing midway.

Fix: Keep all key documents ready (policy copy, death certificate, nominee ID, bank proof).

6. Not Informing Family About Policy

Mistake: Policyholder never shares details with family.

Impact: Family doesn’t know where to claim or which insurer to contact.

Fix: Share policy documents, insurer details, and claim steps with nominee.

7. Concealing Smoking Or Alcohol Habits

Mistake: Marking “non-smoker” despite usage.

Impact: If found in medical tests or post-mortem, claim may be denied.

Fix: Always declare lifestyle habits honestly - insurers don’t reject honest smokers.

8. Submitting Falsified Documents

Mistake: Altered or forged certificates.

Impact: Permanent claim rejection and possible legal action.

Fix: Submit originals or notarized copies only.

9. Buying From Unverified Agents

Mistake: Policy bought from non-licensed or inactive agent.

Impact: Communication gap and claim handling issues.

Fix: Buy only from IRDAI-registered insurers or verified platforms like PolicyBachat.

10. Not Updating Contact Or Address

Mistake: Insurer can’t reach nominee for verification.

Impact: Delays payout or causes abandonment.

Fix: Keep contact info updated in insurer records regularly.

Documents Nominees Should Always Keep Ready

Document Purpose
Policy Document Proof of coverage
Death Certificate Mandatory for all claims
Nominee ID Proof KYC verification
Bank Account Proof For direct payout
Medical And Hospital Records For natural death verification
FIR Or Post-Mortem For accidental death

Reasons Why Claims Get Rejected (IRDAI Data Insights)

Reason % Of Rejections Preventable?
Non-disclosure of medical history 45% Yes
Wrong nominee or missing KYC 20% Yes
Policy lapse 15% Yes
Late intimation 10% Yes
Fraudulent documents 5% Yes

How To Ensure Your Family’s Claim Is Approved

  • Be transparent - declare everything honestly at purchase.
  • Do annual policy review - update address, nominee, contact.
  • Share all details with spouse or children.
  • Use PolicyBachat Claim Assist for guidance and tracking.
  • Keep premiums active with auto reminders.

Local Insights For Hyderabad

  • Avg. claim settlement time: 7 days.
  • Top claim reasons in Telangana: Non-disclosure, Policy lapse.
  • % of claims rejected due to non-disclosure: 42%.
  • Most trusted insurers for smooth claims: SecureLife, ProtectMax, ShieldCare.

PolicyBachat Claim Assist Benefits

  • Free claim filing support for nominees.
  • 24x7 tracking dashboard.
  • Pre-verification of documents.
  • Escalation help for delayed claims.
  • 90% of assisted claims settled under 10 days.

FAQs

What is the most common reason for term claim rejection?

Non-disclosure of health conditions or smoking habits during policy purchase.

Can I change nominee after buying the policy?

Yes, anytime - just submit a nominee change form with ID proof.

What if death occurs abroad?

Submit attested death certificate via Indian Embassy - claim remains valid.

Are accidental deaths covered automatically?

Yes, under base cover. Add ADB Rider for double payout.

What happens if the insurer rejects my claim?

You can appeal via insurer’s Grievance Cell or IRDAI Ombudsman.

How can I track my claim status?

Through insurer’s portal or PolicyBachat’s Claim Dashboard.

Do insurers reject claims for late filing?

Not if delay is justified; provide written reason for delay.

Is suicide covered under term plans?

Yes, after 12 months from policy issuance (per IRDAI rules).

What if nominee also dies before claim?

Legal heir or secondary nominee can claim with succession proof.

Can claim be denied for minor errors in form?

No, minor clerical errors are usually corrected during verification.

Do I need a lawyer to file a claim?

No. PolicyBachat or insurer’s support team can handle it free.

Can multiple nominees claim together?

Yes, if percentages are declared in policy.

Are online term plans easier for claim filing?

Yes - simpler documentation and faster approval.

Is medical cause of death mandatory?

For hospital deaths, yes; for natural home deaths, doctor certificate suffices.

What’s the fastest way to ensure smooth claim payout?

Be honest at purchase, update records yearly, and keep documents accessible to family.

Customer Reviews

  • “Followed this checklist - my mother’s claim settled in 6 days.” - Akhil Nair, Kochi
  • “Helpful article - avoided missing documents.” - Rachita Mehta, Delhi
  • “Wish I read this earlier; now my family knows everything.” - Sandeep Rao, Hyderabad
  • “PolicyBachat claim team guided us step by step.” - Kavya Iyer, Bengaluru
  • “Explained common mistakes clearly - easy for families to follow.” - Anurag Banerjee, Pune
  • “Best guide for nominees - I’ve shared it with my relatives.” - Meena Krishnan, Chennai

Interlink Block

Updated On: 2025-12-15

Author : Team PolicyBachat

Frequently Asked Questions

To claim term insurance after death follow the below steps

  • Step 1- Claim Intimation: Claim intimation can be done online or offline which should contain basic information such as the Name of the Policyholder, Policy number, Date of Maturity, etc. In case of offline intimation, the claim form can be availed from the nearest life insurance branch and duly filled before submission.
  • Step 2- Claim Processing: Once the claim intimation is done and the claim intimation number is obtained, the next step is to provide all the relevant documents to the insurance company.
  • Step 3- Claim Decision: After the submission, the company will verify the documents and assess the claim. You will be kept in the loop through regular messages and emails. Once everything is according to their rules, it will process the claim within 30 days.

The Claim Settlement Ratio (CSR) in term insurance is the percentage of claims paid out by an insurance company in a given year compared to the total number of claims received. A higher CSR indicates that the insurance company has a better track record of settling claims.

The claim settlement ratio of TATA AIA Life Insurance is 98.02%. This means that the company settled 98.02% of the claims received during the year. A high claim settlement ratio is an important parameter to consider while buying a life insurance plan, as it indicates the insurer's ability to honour claims.

As per the report published by IRDAI for the year 2021-22. The list of companies which has the best claim settlement ratio in term insurance are Max Life Insurance, Bajaj Allianz Life Insurance, Bharti AXA Life Insurance, AEGON Life Insurance, etc.

The claim ratio in health insurance is calculated by dividing the total claims paid by the insurance company during a specific period by the total premiums collected from policyholders during the same period.

The claim ratio is an important metric to assess the performance and sustainability of a health insurance provider. A higher claim ratio indicates that a larger portion of premiums collected is being paid out as claims, which may impact the insurer's profitability.

On the other hand, a lower claim ratio may indicate that the insurer can manage claims efficiently and retain more premiums as profit. It's important to review the claim ratio in conjunction with other factors such as policy features, coverage, premium, and customer reviews to make an informed decision while choosing a health insurance provider.

Please wait while your request is being processed.