Top 5 Reasons for Rejection of a Critical Illness Claim
In collaboration with the different insurance firms, the Association of British Insurers (ABI) has worked to reduce the proportion of refused CI claims throughout the years. The ABI has produced a Code of Practice aimed at helping customers better understand what sort of coverage they have and how several crucial features of a CI claim (such as Total Permanent Disability and non-disclosure) are defined. The following are the top five reasons why a critical illness claim rejected:
1. Claiming an undiagnosed ailment
Even though the insurance does not cover their medical condition, some CI applicants submit a claim. "Well, it can't harm to try," they may reason. This might be due to a misunderstanding or a lack of knowledge of the policy's coverage.
A customer who makes a CI claim because of the presence of a benign tumor, for example, will be denied since this is not considered a critical disease and is often excluded from coverage.
2. Claiming a covered disease that does not fulfill the critical illness criterion.
Claims that do not satisfy the policy definition account for a significant fraction of rejections. They fall under the following categories:
•The serious sickness is insufficiently severe.
Some insured individuals submit a claim for a covered critical illness, but their condition is not severe enough to fulfill the policy definition of a covered critical illness. For example, if a customer files a claim for deafness (covered under the insurance), his claim will be refused if he is only deaf in one ear. The ABI standard definition of deafness states that there must be a permanent and irreversible hearing loss in both ears to be compensated.
•A reason for the severe sickness has been ruled out.
Self-inflicted injuries, inability to follow reasonable doctor's advice, and severe disease caused by drug or alcohol addiction are all instances of typical exclusions. The Insurance Company will refuse the claim if the person covered becomes critically sick due to attempting suicide and consuming a large number of sleeping drugs, resulting in a coma.
•A few words on Total Permanent Disability (TPD).
TPD definitions may differ from policy to policy. Before pursuing a TPD claim against your critical illness coverage, double-check the term used in your policy. Typically, the Person Insured is the one who determines who is covered under his TPD policy.
3. Failing to disclose essential facts when applying for insurance.
The Insurance Company may refuse the claim if crucial medical information is not disclosed. Critical illness insurance is issued based on the information submitted by the potential Person Insured throughout the application process. Some medical facts may make the business grant the claim with higher rates or refuse it entirely.
But what exactly is non-disclosure? This might vary from the customer missing information that was not explicitly requested on the insurance application to a purposeful omission to save money on premiums. The ABI has broadened the definition of "non-disclosure" to include information concealed from the insured by the prospective Person Insured.
4. A lack of required medical documentation.
Insurance companies will handle claims primarily based on the evidence submitted, but they may also request independent testing or have their designated physician investigate the critical illness diagnosis. Suppose the Person Insured fails to provide these documents (for example, he did not present his doctor's report covering his diagnosis, or the records he gave were not created by a doctor who is not a consultant specialist, as required by some critical illness definitions). In that case, his claim will most likely be denied.
5. Submitting a false claim
The insurance company will thoroughly investigate the claim. Any fraud discoveries will result in the claim being denied and potential prosecution of fraud.
The five arguments listed above may be divided into two categories:
•inability to adhere to policy definitions, as well as
•failing to provide pertinent information.
