Quora Answer: What are the Reasons Term Policy Claims are Rejected?

The following is my answer to a Quora question: “What are the reasons posed by term insurers when rejecting a claim?” 

This depends on the terms of the policy contract.  One of the more common reasons is because of non-disclosure of a pre-existing condition during underwriting.  For example, if the person made a claim of death due to heart attack, and the insurer discovered that the history of high cholesterol or high blood pressure was not previously disclosed, the insurer would deny the claim, and refund all premiums less costs. 

Another common reason is because the claim is not covered by the policy.  For example, some term life policies do not cover suicide or any death ruled to be by self-harm.  Or, if there is a claim for critical illness, and the rider was either not purchased, or lapsed, the claim is rejected. 

Sometimes, a claim is made for death through activities that are not covered by the policy.  Most policies do not cover high risk activities done as a profession, such as a professional race car driver, or serving in the military in a combat role.  Special coverage is required.  In the event of a claim, that claim would be rejected. 

If the claim is made within the waiting period, it will also be rejected.  For example, some policies have a waiting period of between 30 days to 90 days for specific claims.  Any claim within that period would be rejected.