Life insurance is essential for protecting the family from financial troubles in case of the sudden demise of the policyholder. The lump-sum amount is given to the family if the policyholder does not survive the term so that the financial goals of the family do not get derailed. However, buying insurance is not as easy as it looks, as there are many factors on which you can be denied coverage. Here are some of the factors based on which your life insurance application may be denied by the insurance company:
Health status: Insurance companies ask for your health status before issuing a policy. In many cases, a medical test is required, as the insurer wants to be sure about the health of the customer. The medical reports are examined by the underwriter based on which policy is issued to the customer. If the report reveals adverse health conditions such as obesity, high BMI, cholesterol or high blood pressure, among others, then the insurance company might reject the insurance application.
Income details: The insurance company asks for income proof before issuing a policy to make sure about the ability of the policyholder to sustain the cost of insurance cover. If the policyholder applies for Rs 3 crore cover but has no assets or supporting income then the claim might get rejected by the insurance company.
Hazardous occupation: Professions such as airline pilots, flight engineers, truck workers, among others, that carry high risk may be rejected by the insurance company. This is because the mortality rate is higher for these occupations and therefore insurers avoid taking them in their books.
Hazardous extracurricular activities: There are extracurricular activities that are considered hazardous by insurance companies such as mountaineering, rock climbing and other adventure sports. People involved in such activities may be denied a policy by the insurance company as they are considered risky by insurance companies.
Previous decline: The insurance company also asks you about previous applications if declined by an insurance company. If your proposal has already been rejected by any insurance company the chances are high that the new insurer will examine the application carefully which might lead to the decline of the proposal form.
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