A rejected claim when you’re already dealing with a health issue is one of the worst experiences a policyholder can have. And most of the time, it’s preventable. Understanding why claims get rejected — or put on hold — before you ever need to make one is part of being a well-covered policyholder.
Here are the five most common reasons insurance claims are rejected or delayed in Malaysia, and what you can do about each.
1. Non-disclosure of Pre-existing Conditions
When you apply for insurance, you’re legally required to declare your medical history honestly and in full. If you didn’t disclose a condition — even if you genuinely didn’t think it was relevant — and that condition is later connected to a claim, the insurer has grounds to reject it.
This is one of the most common reasons for claim rejections, and one of the most avoidable.
What to do: Always be fully transparent during your application. If you’re unsure whether something is worth disclosing, declare it anyway and let the underwriter decide. You only need to be honest — the insurer does the rest. Erring on the side of disclosure protects you.
2. The Waiting Period Hasn’t Been Served
As covered in our previous blog on waiting periods, most plans carry a 30-day general illness waiting period and a 120-day waiting period for specific listed conditions. Making a claim within that window is one of the most frequent rejection reasons — and entirely avoidable if you know your policy.
Note that accidental injuries are covered from day one, but if the accident results in a diagnosis that falls under the specified illness list (such as a hernia from physical trauma), the 120-day restriction still applies regardless of the cause.
What to do: Know your policy start date and the applicable waiting periods before you ever need to make a claim. If you’re within a waiting period, you need to be aware — not surprised.
3. Your Claim Falls in the 2-Year Contestible Period
During the first two years of your policy, the insurer has the right to investigate any claim before paying it. This doesn’t mean an automatic rejection — it means your claim is put on hold while the insurer reviews your application and medical history to verify accuracy.
If they find a discrepancy between what you declared at application and what your records show, the claim may be reduced or declined. If everything checks out, the claim proceeds and is paid.
This is not a penalty — it’s a standard industry mechanism. But it means claims in your first two years will face more scrutiny than those made later.
What to do: Be thorough and honest when you apply. Once you pass the two-year mark, your policy becomes non-contestible (barring fraud), and claims are assessed purely on coverage terms rather than application accuracy.
4. Exclusions from Underwriting
When your policy was issued, the insurer may have excluded certain conditions based on your health history at the time of application. Any claim related to those excluded conditions will be declined — not because of any error, but because the terms you agreed to specifically exclude that coverage.
This is distinct from non-disclosure. An exclusion is disclosed and agreed upon. You signed off on it. But if you didn’t read the exclusion clauses carefully at the time, you may not remember what’s excluded.
What to do: When your policy is issued, read the exclusion clauses. If you’re unsure what you’re not covered for, ask your agent to walk you through it explicitly. Knowing your gaps lets you plan for them.
5. Policy Lapsed Due to Non-payment
If your premium payment fails — even by accident — your policy may lapse. A lapsed policy means no coverage. And reinstating it usually requires new underwriting, which may surface conditions that have developed since your original application.
An auto-debit failure, an expired card, or a missed notification can silently end your coverage.
What to do: Set your premiums on auto-debit from a stable account. Verify periodically that payments are going through — don’t assume. One missed payment is not worth the risk of losing your coverage and going through underwriting again.
The Best Protection Against Rejection Is Understanding Your Policy
None of these rejection reasons are mysterious. They’re all situations you can prepare for with the right information upfront. That’s not something you should have to figure out alone when you’re already in hospital.
A policy review covers exactly this — not just what your plan includes, but what it excludes, when it applies, and what to expect if you need to claim.
Frequently Asked Questions
Why was my insurance claim rejected in Malaysia?
The most common reasons are: non-disclosure of a pre-existing condition during application, claiming within a waiting period, an exclusion applied to the condition claimed, or the policy having lapsed due to non-payment. A claim can also be held for investigation if it falls within the 2-year contestible period.
What happens if my claim is put on hold?
The insurer will investigate your original application against your medical records. If no discrepancies are found, the claim proceeds and is paid. If there’s a material non-disclosure — intentional or not — the claim may be reduced or declined. During the 2-year contestible period, this review is standard.
Can I appeal a rejected insurance claim in Malaysia?
Yes. You can submit a written appeal to your insurer with supporting documentation. If the insurer’s decision stands and you believe it’s unjust, you can escalate to the Ombudsman for Financial Services (OFS) in Malaysia — formerly known as FMB — which provides independent dispute resolution at no cost.
What counts as a pre-existing condition?
A pre-existing condition is generally any illness, injury, or medical condition you were aware of — or that a reasonable person would have sought medical attention for — before your policy started. This includes diagnosed conditions, symptoms you consulted a doctor about, and medications you were taking. When in doubt, disclose it.
How long does an insurance claim investigation take?
For standard claims within the contestible period, investigations typically take two to six weeks. Complex cases involving significant non-disclosure may take longer. Your insurer is required to acknowledge your claim promptly and keep you updated on progress.
Have a question that wasn’t covered here? Our advisors at FINNO. offer free, no-obligation consultations — no hard sell, just honest answers about what’s right for your situation.