Life Insurance Corporation of india (LIC) is considered one of the safest avenues for long-term financial security. Yet, many policyholders face claim rejections due to simple but costly mistakes. These errors can not only delay your benefits but also lead to financial distress for your family.
Here are the four major mistakes to avoid before investing in lic policies.
1. Hiding health or lifestyle Information – The Honesty Rule
Insurance works on the principle of “utmost good faith”, which means providing complete and accurate information at the time of policy purchase.
Many people hide existing medical conditions like diabetes, hypertension, or heart disease.
Others fail to disclose habits like smoking, alcohol consumption, or high-risk activities.
Why it’s risky:
At the time of claim settlement, lic thoroughly checks medical and personal records. If discrepancies are found, the company can reject the claim outright.
Tip: Disclose everything truthfully. It may increase your premium slightly, but it ensures your family receives benefits when needed.
2. Missing Premium Payments – Letting Your Policy Lapse
Not paying your premium on time can lead to a policy lapse, making your coverage inactive. During this lapse period, no claim is entertained.
LIC offers a grace period for delayed payments, but failing to pay beyond this window can lead to complete loss of benefits.
Though some lapsed policies can be revived by paying arrears and penalties, it’s an additional hassle and expense.
Tip: Automate premium payments via ECS or standing instructions with your bank to avoid missing deadlines.
3. Incorrect or Missing Nominee Details – Creating Legal Hassles
Your nominee is the person who receives the claim amount in your absence. But many policyholders either:
Forget to mention a nominee, or
Provide outdated or incorrect details (name, relationship, address).
This can lead to legal complications, delays, or disputes during claim settlement.
Tip: Regularly update nominee details after major life events like marriage, childbirth, or divorce. Ensure your nominee knows about the policy and where documents are kept.
4. Incomplete or Wrong Documentation – Delaying the Claim Process
When filing a claim, document accuracy is crucial. Missing or incorrect paperwork—such as death certificates, hospital records, or bank details—can lead to delays or outright rejection.
Required documents may include:
Original policy bond
Medical records and hospital bills
Identity and address proof of nominee
Bank account details for direct transfer
Tip: Keep all documents updated, verified, and safely stored. Inform family members where they are kept.
Supreme Court’s Stand on Transparency
In march 2025, the supreme court reinforced the need for full disclosure and transparency in insurance dealings. The ruling stated that policies like Jeevan Arogya Yojana would not cover illnesses caused by alcohol, highlighting the importance of honest declarations.
Final Word – Honesty & Diligence = Hassle-Free Claim
To ensure your lic policy provides security when needed:
Disclose all health and lifestyle details.
Pay premiums on time.
Update nominee details regularly.
Maintain proper documentation.
And if your claim is rejected, don’t panic—contact LIC’s grievance department or approach the Insurance Ombudsman for resolution..jpg)
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