Sometimes, a person may be admitted to the hospital in an emergency. At such a time, the person’s priority is to undergo medical treatment, rather than to trace the insurance policy documents and intimate the insurance company of the emergency. As a result, such an individual may forget to inform the insurance company within the prescribed period (a maximum of seven days), and hence the claim is rejected even if it is submitted in time, i.e., within 30 days of discharge.

In other cases, the claim-settlement process is stalled on the grounds that original documents like the discharge card, blood reports, etc. were not submitted, even though there is no condition in a policy that requires the original reports to be handed over. In yet other cases, family members of the insured may be unaware of the policy’s existence, or the insured may have travelled immediately after making the claim. Similarly, the claim could have been made out of a remote location or could be delayed due to a period of mourning after the insured’s death – all of which are made out to be causes for rejection.

Life insurance claims are rejected only if there is an out-and-out suppression of material facts. For instance, in the case of a serious illness that has the capacity to affect the insured’s longevity, the company may not have extended insurance had it been aware of this fact. With life insurance, the time frame for making a claim is longer than that with health insurance, but the sensitivity of the moment often complicates matters.

Now, the Supreme Court has ruled, that a life insurance claim becomes time-barred three years after the insured’s death. So, insurance companies can technically refuse such claims. However, the circumstances also need to be considered in such cases. In India, typically, policyholders hesitate to discuss such issues openly, and hence, family members or nominees may remain unaware of such policies for a long time, sometimes even until three-four years have elapsed. These issues are factored in while processing death benefit claims, and they are usually paid out.

Ideally, however, you should keep your family members informed about the purchase of such covers, and also about where they are kept – be it in the house or bank lockers. If the insurance company asks for documents like police or hospital reports, ensure that you submit them on time. In case of delays, the nominees can always enlist the support of the life insurer.

When it comes to health insurance, if you are availing yourself of the cashless facility, it is the hospital’s duty to complete the process and forward the pre-authorisation form to the insurer on your behalf. However, you would do well to touch base with your insurer simultaneously through the call centre or directly through the TPA (third party administrator). This will eliminate delays in sanctioning the request in case of any delays from the hospital’s side. If it is a planned surgery or hospitalisation, you can submit the pre-authorisation form even before the procedure commences.

In case of reimbursement claims, the deadline for submitting the claim along with bills is 14-30 days, depending on the insurer and the policy. Also, keep an eye on the time frame for intimating the insurer – for example, it is likely that the company insists on being informed about the hospitalisation within seven days, even though you could submit the required documents later.

Rejection of claims in a mechanical fashion, purely on technical grounds, result in policyholders losing confidence in the insurance industry, giving rise to excessive legal recourse. Insurers may now have to incorporate a clause in the policy document stating that the delay could be accommodated if it is proved to be ‘for reasons beyond the control of the insured’.

According to a recent circular and clarification, in case of delay in filing the claim, it should not be rejected outright, but an explanation should be sought to consider the reason for the delay. Such a delay should be considered if a valid reason is provided. Of course, while you may now have recourse if your submission or intimation is delayed due to unavoidable circumstances, it is best to follow the procedure mentioned in your policy docket to ensure a hassle-free claim process.