Thursday, 11 October 2012

3 Reasons for Unpaid Insurance Claims

When you buy life insurance quotes, life insurance company is not going bankrupt due to pay your claim through a complex actuarial calculations, they can predict accurately how much the claim that they must bear in one year. They did not know anyone from the insured who will die but they know with high accuracy the total number who will die and the amount of the sum assured. If there are exceptional circumstances that they missed estimates, with their reinsurance mechanism to move the burden of extra claim to the reinsurance company (reinsurer) which then also can move again to another reinsurer.

Here are 3 reasons most commonly used insurance companies to deny insurance claims

If the insured dies by suicide, the insurance company the right to refuse to pay the sum insured if the policy is still in its contestable (one or two years after the policy was published). The insurance company may conduct an investigation to obtain evidence to support the denial of the claim. After the contestable, there is no reason for insurance companies to deny coverage due to suicide


In accidental death insurance, there is usually a clause that excludes injury caused by the act of "self-mutilation". This exception clearly applies when the insured's death is due to suicide, such as him crashing into a speeding train. Although it requires proving that complicated to find out if the insured acts intentionally or not, if proven as arson the insurance company have a good reason to refuse to pay the claim.

Material misrepresentations

Material misrepresentation is a statement which, when delivered properly at the time of submission of the application, it will cause the insurance company rejected the insured and the policy issue. Misrepresentations can be a false statement or concealment of information. Material misrepresentations concerning the condition or general medical history, smoking habits, age and occupation / hobby prospective insured. Often, misrepresentation occurred because of lack of understanding of the question or the lack of guidance from your insurance agent. In some cases, unscrupulous insurance agents may advise the insured to provide the answers of nice that the application be accepted, even if it is contrary to the actual conditions. Cheating is called clean sheeting agent and can cause dismissed agent of the insurance company.

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