Purchasing a new life policy? Here's what policyholder should note regarding claim denial
A common mistake is failing to disclose existing policies when buying a new term plan, which can lead to claim denial and leave loved ones unprotected. Insurers assess risk based on a complete view of your health and financial profile, so full disclosure is essential under IRDAI regulations.
- Sep 11, 2025,
- Updated Sep 11, 2025 3:52 PM IST
I am 35 and looking to purchase a new life insurance policy that not only secures my financial future but also extends coverage to my mother and sister. However, I was informed by my agent that if I don't disclose my existing policies, it may lead to claim denial and leave loved ones unprotected. Can you please help me analyze my current insurance portfolio to ensure full compliance and optimal coverage? Additionally, I would like guidance on how digital tools and professional advice can help me structure a policy that addresses my family’s evolving financial needs safely and transparently.
Advice by Mainak Adhikary, Head of Operations, Go Digit Life Insurance
Purchasing life insurance represents an essential decision that protects your family's financial security. However, one common mistake may endanger your safety net—neglecting to reveal any preexisting life insurance policies that you hold with the insurer while purchasing a term insurance policy. Such an oversight, whether deliberate or unintentional, can result in insurance claim denial, depriving your loved ones of the expected financial assistance.
Life insurance companies assess risk based on a comprehensive view of your financial and health profile. To do so, the insurance company needs to be informed about existing term insurance policies that you hold before they can determine if the new coverage meets its established boundaries. Failing to reveal details of existing policies can be seen as misrepresentation and can be the basis of claim denial based on (IRDAI) regulations.
Digitization has simplified life insurance by streamlining applications, document handling, and coverage tracking. Online platforms and mobile apps now allow users to complete processes quickly and with less paperwork, making insurance more accessible and efficient for everyday consumers.
To ensure your life insurance remains valid and your family protected, consider these best practices:
1. Disclose All Existing Policies: All current policies must be disclosed regardless of their insurer or coverage value. You should provide policy numbers together with sum assured amounts and tenure details.
2. Use Digital Tools Wisely: Online forms provide convenience; yet you should take your time to enter information correctly. Verify all information before submitting your documents while maintaining digital copies of all submitted documents.
3. Consult a Trusted Advisor: If you are unsure about disclosure requirements, you can consult a licensed insurance advisor. The advisor can guide you on how to avoid some common errors.
4. Review Your Insurance Portfolio Regularly: Life stages change over time as people grow older, take on new financial responsibilities, and experience different phases such as education, career changes, getting married or having children or taking new loans. Using digital dashboards offered by insurers can help you monitor and update your coverage from time to time.
5. Be Honest and Transparent: Even if a policy seems minor or outdated, disclose it. Transparency ensures that your claim won’t be denied due to perceived concealment.
Disclosing your entire insurance portfolio ensures that your coverage stays valid while providing financial protection to your family as planned. A truthful declaration during the insurance application process serves as the essential base that establishes a trustworthy insurance contract.
(Views expressed by the expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)
I am 35 and looking to purchase a new life insurance policy that not only secures my financial future but also extends coverage to my mother and sister. However, I was informed by my agent that if I don't disclose my existing policies, it may lead to claim denial and leave loved ones unprotected. Can you please help me analyze my current insurance portfolio to ensure full compliance and optimal coverage? Additionally, I would like guidance on how digital tools and professional advice can help me structure a policy that addresses my family’s evolving financial needs safely and transparently.
Advice by Mainak Adhikary, Head of Operations, Go Digit Life Insurance
Purchasing life insurance represents an essential decision that protects your family's financial security. However, one common mistake may endanger your safety net—neglecting to reveal any preexisting life insurance policies that you hold with the insurer while purchasing a term insurance policy. Such an oversight, whether deliberate or unintentional, can result in insurance claim denial, depriving your loved ones of the expected financial assistance.
Life insurance companies assess risk based on a comprehensive view of your financial and health profile. To do so, the insurance company needs to be informed about existing term insurance policies that you hold before they can determine if the new coverage meets its established boundaries. Failing to reveal details of existing policies can be seen as misrepresentation and can be the basis of claim denial based on (IRDAI) regulations.
Digitization has simplified life insurance by streamlining applications, document handling, and coverage tracking. Online platforms and mobile apps now allow users to complete processes quickly and with less paperwork, making insurance more accessible and efficient for everyday consumers.
To ensure your life insurance remains valid and your family protected, consider these best practices:
1. Disclose All Existing Policies: All current policies must be disclosed regardless of their insurer or coverage value. You should provide policy numbers together with sum assured amounts and tenure details.
2. Use Digital Tools Wisely: Online forms provide convenience; yet you should take your time to enter information correctly. Verify all information before submitting your documents while maintaining digital copies of all submitted documents.
3. Consult a Trusted Advisor: If you are unsure about disclosure requirements, you can consult a licensed insurance advisor. The advisor can guide you on how to avoid some common errors.
4. Review Your Insurance Portfolio Regularly: Life stages change over time as people grow older, take on new financial responsibilities, and experience different phases such as education, career changes, getting married or having children or taking new loans. Using digital dashboards offered by insurers can help you monitor and update your coverage from time to time.
5. Be Honest and Transparent: Even if a policy seems minor or outdated, disclose it. Transparency ensures that your claim won’t be denied due to perceived concealment.
Disclosing your entire insurance portfolio ensures that your coverage stays valid while providing financial protection to your family as planned. A truthful declaration during the insurance application process serves as the essential base that establishes a trustworthy insurance contract.
(Views expressed by the expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)