Can a Critical Illness Claim Get Rejected?

Getting diagnosed with a critical illness can cause immense mental and financial strain to you and your loved ones. The condition may require long-term treatment, and paying the bills from your pocket will deplete your savings in no time. This is when having a critical illness cover can help. This insurance product can cover over 15 life-threatening conditions and ease your financial worries. However, what if your critical illness claim gets rejected? Yes, insurance companies do reject claims or pay them partially based on valid grounds. Let’s talk about claim rejection in health insurance in detail.

What is a critical illness insurance policy?

Critical Illness health insurance or a critical illness insurance policy covers policyholders against life-threatening conditions, including cancer, heart disease, Alzheimer’s and kidney disease. Thanks to high pollution levels and unhealthy lifestyle habits, critical illnesses are increasing among people of all ages. Hence, staying covered under this insurance policy can ensure peace of mind and financial security, especially for those with a family history of critical illnesses.

How does critical illness insurance work?

If you are covered under this insurance product and you get diagnosed with a life-threatening condition, the insurer will offer you a lump sum payout. You can use this amount to cover your medical bills, pay outstanding loans, meet day-to-day expenses, and more. Once you receive the payout, your critical illness insurance policy will cease to exist.

Why do insurance companies reject critical illness claims?

There are times when insurance companies reject critical illness claims, and this may create financial distress for policyholders with limited savings. Thus, understanding the reasons for claim rejection can save you from being in a similar situation in the future.

The following are some reasons why insurance companies reject critical illness claims —

1. Non-disclosure of information:

When applying for a critical illness cover, make sure you fill out the form correctly and accurately. Non-disclosure or misrepresentation of important information, such as your lifestyle habits, pre-existing conditions, and medical history, can lead to claim rejection.

2. Policy exclusions:

Your insurance provider will approve claims only for the conditions your policy covers. Therefore, if you get diagnosed with a condition that is not included in your policy coverage, the insurer will deny it. For example, a critical illness insurance policy will not cover pre-existing conditions, age-related conditions, chronic illnesses, and some stages of cancer.

3. Absence of important medical documents:

Insurance providers check the policyholder's medical reports and other supporting documents before approving a claim. If everything looks fine, they approve a claim. Thus, non-submission of the required medical documents can lead to claim rejection.

4. Policy is in the waiting period:

A critical illness health insurance cover has a waiting period, and insurance companies do not entertain claims made during this time. Hence, if you raise a claim when your policy is in the waiting period, the insurer will reject it.

5. Lapsed policy:

If your policy has lapsed due to non-renewal, the insurer will not entertain your claim. Thus, if your policy was not active when you got diagnosed with a critical illness, your claim will be rejected.

6. Fraudulent claims:

Filing fraudulent claims, such as fabricating your medical reports, will lead to claim rejection. This is a serious offence, so the insurer may also cancel your critical illness insurance policy.

Tips to avoid claim rejection in critical illness health insurance

The following are tips that can help you avoid claim rejection —

1. Read policy documents:

When buying a critical illness cover, take some time to understand policy inclusions, exclusions, waiting periods, and other terms and conditions. Keep these in mind while filing a claim to avoid rejection.

2. Take the help of the insurer:

If you are unable to understand any part of the policy, get in touch with the insurance provider for clarification. This will help you make an informed purchase decision.

3. Provide correct information:

Do not hide any vital information from the insurer. For example, if you are suffering from a condition, make sure you mention it at the time of policy purchase.

4. Renew policy on time:

Remember to renew the plan before its expiry date. If you miss the policy’s expiry date, you must renew before the end of the grace period to prevent policy lapse and claim denial.

5. Appeal a claim denial:

If you feel there is no reason to deny your claim, you can appeal a claim denial. The insurer may ask for additional documents related to the claim, so make sure you keep them handy.

Conclusion

If you get diagnosed with a life-threatening condition, a critical illness insurance policy can offer much-needed financial support to you and your loved ones. However, before you file a claim, remember to check policy coverage, exclusions, limitations, and other terms and conditions. You must also understand the reasons for claim rejection in health insurance and file your claim accordingly. If you have a doubt, you can seek clarification from your insurance provider or agent.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.