While buying a life insurance policy, especially term insurance where the sum assured is typically higher, people doubt whether the insurance company will pay the claim to the nominee or not. The concern is genuine, because in some cases claims are denied or get rejected because of various reasons. For instance, as per Insurance Regulatory Development Authority of India (IRDAI), in 2016-17, life insurance companies settled 8.60 lakh claims on individual policies, but repudiated or rejected 12,769 claims.
However, if you make all the disclosures and provide correct information and documents while buying a policy, you need not worry about claim rejection. Also, insurance companies can’t deny a claim after the expiry of three years from the date of issuance of the policy, according to a clause in the Insurance Act.