Top reasons why a Term Insurance claim might get rejected

A Term Insurance is a promise to your family, and in 2026 that promise is being kept more reliably than ever. Insurers regulated by IRDAI now settle the overwhelming majority of individual claims. Aditya Birla Sun Life Insurance (ABSLI) settled 98.86% of individual claims, as per annual audited figures submitted to IRDAI for the year FY 25-26. Yet a small share of claims still gets rejected, almost always for preventable reasons. Knowing them helps you make sure your nominee never faces that situation.

What are the most common reasons for claim rejection?

• Non-disclosure of material facts: Hiding health conditions, smoking or tobacco use, risky occupations, or existing policies is the single biggest cause of rejection. Disclose everything honestly at proposal stage.
• Incorrect information in the proposal: Errors in age, income, occupation, or lifestyle details can invalidate the contract. Fill the form yourself and double-check it.
• Policy lapse: If premiums are unpaid beyond the grace period, the policy lapses and a claim during the lapse will not be paid. Pay on time or use auto-debit.
• Policy exclusions: Death by suicide within 12 months of policy commencement or revival is excluded; in that event, premiums paid (excluding taxes) are returned to the nominee. Riders carry their own exclusions too.
• Nominee details not updated: Outdated or missing nominee information delays or complicates settlement. Review nomination after major life events.
• Delay in claim intimation: Informing the insurer late makes verification harder. Intimate the claim as early as possible.

How to make sure your family’s claim is paid?

• Disclose all health, lifestyle, and financial details truthfully, and update the insurer if circumstances change materially.
• Keep the policy in force. Enable auto-pay and use the grace period only as a backstop.
• Tell your nominee where the policy documents are and how the claim process works.
• Keep nominee details current, and consider the MWP Act option where relevant.

How to file a Term Insurance Claim with ABSLI?

Initiate the claim by visiting the nearest ABSLI branch, calling 1-800-270-7000, or emailing claims.lifeinsurance@adityabirlacapital.com. Keep these documents ready: the claimant's statement form, the policy document, the death certificate, and the nominee's identity proof. The full process and forms are available on the ABSLI claims page.

Why is Term Insurance important?

A Term Plan converts a small annual premium into a large financial safety net for your family, and the claim settlement data above shows that the promise is overwhelmingly honoured. Estimate the cover your family needs with the ABSLI Term Insurance calculator and compare ABSLI Term Insurance Plans.

What is ABSLI claim settlement ratio?

Before you buy, check the insurer's claim settlement ratio (CSR), the percentage of claims settled out of claims received. As per annual audited figures submitted to IRDAI for the year FY 25-26, ABSLI settled 98.86% of individual claims.

Source: IRDAI and insurer public disclosures (Form L-40) for FY 2025-26. Ratios pertain to individual claims.