Life insurance death claim rejected — what can the nominee do?

Read the rejection letter for the exact ground and the evidence it relies on, then check the policy dates: once three years have passed from the latest of the issue, risk-start, revival or rider date, Section 45 of the Insurance Act bars the insurer from questioning the policy on any ground. Answer the ground in writing to the insurer's grievance officer. If the reply is unsatisfactory, or none comes within one month, the nominee can take the complaint to the Insurance Ombudsman within one year, and can also register it on IRDAI's Bima Bharosa portal.

A repudiation letter is the insurer's decision, written down. The nominee can ask the insurer to look again, complain, and if needed take the complaint further. What matters at every step is whether the ground in the letter holds up against the policy documents and the dates, so start there rather than with how unfair the refusal feels.

Find the ground and the evidence behind it

A death claim can be refused on several grounds: non-disclosure in the proposal form, a policy that had lapsed, or an exclusion in a rider, for example. Whatever the ground, two rules frame the letter. If the insurer questions the policy within the three-year period explained below, it must tell the insured or the nominee in writing the grounds and the materials its decision is based on. And IRDAI's policyholder-protection circular says no claim may be repudiated without legally tenable evidence.^{[1, 2]}

• The ground.: The words the insurer uses, such as 'suppression of material facts' or 'policy lapsed', and the clause or section it names.
• The material.: The documents it says it relied on: the proposal form, hospital or doctor records, an investigation report. If they were not enclosed, ask for them in writing; the law requires the grounds and materials to be communicated in writing.^[1]
• The dates.: The policy's issue date, risk commencement date, any revival date, any rider date, the date of death and the date of the letter. You need all of them for the next check.

Check the dates before you argue anything else

Section 45 of the Insurance Act, 1938 says no life policy can be called in question on any ground whatsoever after three years from the date of the policy. Those three years run from the latest of the issue date, the risk commencement date, the revival date and the rider date. The insurer can still ask for proof of age at any time it is entitled to. How Section 45 works goes through the rule in detail.^[1]

What the nominee can do, step by step

1. 1

   Ask for the papers.

   Write to the insurer for a copy of the proposal form, the investigation or medical material it relied on, and the clause it applied. Keep a dated copy of your letter. The insurer has to communicate its grounds and materials in writing.^[1]

2. 2

   Answer the ground, in writing, to the grievance officer.

   Deal with the specific ground and attach documents: for a non-disclosure ground, what the proposal form actually asked and what the medical records actually show. A nominee counts as a complainant under IRDAI's rules, and the insurer should resolve the complaint within 14 days, giving reasons that refer to the policy terms if it does not accept it.^{[3, 2]}

3. 3

   Register it on Bima Bharosa if you want it on IRDAI's system.

   You can also register the complaint online on IRDAI's Bima Bharosa portal and track it there. What Bima Bharosa is explains when it helps.^[4]

4. 4

   Take it to the Insurance Ombudsman if the reply does not settle it.

   A complaint can be made personally or through the legal heirs, nominee or assignee. It can be filed once the insurer has rejected your written complaint, not replied within one month of receiving it, or replied in a way you are not satisfied with, and it must be filed within one year. Filing is free.^{[5, 6]}

5. 5

   Check what is owed even if the refusal stands.

   If the insurer repudiates for a misstatement rather than fraud, Section 45 requires the premiums collected up to the date of repudiation to be paid back within ninety days. Ask for this in writing if it has not been offered.^[1]

When the claim amount is large

The Insurance Ombudsman cannot award compensation of more than ₹50 lakh, including expenses. A complaint is also not maintainable before the Ombudsman if the same matter is pending before, or has already been decided by, a court, consumer forum or arbitrator. If the sum assured is above that limit, or you are weighing a consumer commission or a court instead, take independent legal advice before you file anywhere, because starting in one forum can close another. ClaimAssure does not give legal advice.^[5]

Mistakes that cost families time

• Arguing the loss instead of the ground. A letter about the family's hardship does not answer 'non-disclosure'; the proposal form and the medical records do.
• Not asking for the proposal form and the material relied on. The insurer has to communicate its grounds and materials in writing, so ask for them before you reply.^[1]
• Letting the Ombudsman's one-year window run out while waiting for one more reply from the insurer.^[5]
• Starting a consumer case and an Ombudsman complaint on the same matter at the same time.^[5]

ClaimAssure is an independent private platform. It is not an insurer, IRDAI, Bima Bharosa or the Insurance Ombudsman, it never files anything on your behalf, and it cannot promise any outcome. What it does is read your documents and show you what they say.

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