Can an insurance company deny a compensation payment?

In general, most people take out an insurance policy as a tool to feel protected and to protect both their assets and their family nucleus. However, there may be certain drawbacks when you want to use it.

Insurance companies have certain parameters and clauses that, if not followed, can cause problems when using your policy or requesting compensation from it. However, sometimes it is not something related to the insured, but the insurance company.

There are cases where insurance companies tend to generate some kind of setback or make the system a bit slow in terms of paying compensation; in order to obtain benefits or users desist from requesting it.

That is why it is necessary before contracting an insurance policy, to have the security of contracting a policy in a prestigious company; which provides security and responsibility to its policyholders.

Reasons why an insurance company can deny compensation

  • Suspicion of fraud against the company; the insurance company can evaluate the possible cause presented by the insured or the beneficiaries to request the payment of compensation from a life policy. They could be protected under an administrative process until it is demonstrated that the insured or his beneficiaries failed to comply with a clause of the policy; in this case the insurance company may deny payment of compensation.
  • Self-inflicted death of the insured: insurers do not contemplate death by decision of the insured in their policy contracts. For them, it is exempt from the payment of compensation to the beneficiaries.
  • Data error of the insured; an error can be made by anyone, however, when it has to do with insurance companies, they are usually for the benefit of the same. In other words, many companies tend to generate an error in the user’s data, so if the user does not realize it before signing, it could be the cause for a possible refusal of a policy in the future that needs to use it. That is why having a good insurance advisor will help you avoid this type of very common mistake between the insured and the insurer.
  • Expiration of the policy; most companies have a clause for non-payment of the policy. This means that, if at the time of requesting it, either due to an incident or payment of compensation for death, and the policy is expired, the benefit will be annulled immediately and the beneficiary will lose his right to compensation.
  • Practice a high-risk sport

It is of great importance that the insured always keep all their data updated; also have an advisor who can explain to the insured in more detail all the points of the clauses to avoid errors.

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