By Petrie Marx, 18 July 2018
She sustained cracked ribs, damage to her vertebrae and whiplash at the time but given that it was a decade earlier she didn’t see the point in mentioning it to her broker or insurer. Bongi has been experiencing severe back pains for the last year and following visits to various specialists, an orthopaedic surgeon has recommended a back operation due to a latent injury, and Bongi can no longer fulfil her work commitments that require her to be fully mobile. Bongi’s insurance company has now repudiated her disability claim due to non-disclosure of her accident.
Bongi’s story touches on the controversial issue of non-disclosure. Although life insurance companies honour the vast majority of claims, even the small number of repudiated claims can be avoided by following simple steps that enable the insurer to get the full view of a client’s risk, says Petrie Marx, Product Actuary at Sanlam Individual Life.
“Insurers exist to provide clients with peace of mind and pay claims. The monthly premium clients pay is based on the insurer’s assessment of the client’s risk. To determine this, clients are required to disclose information on their medical history and that of their close relatives, their work, hobbies and so on,” says Marx.
In this way, a fair price and pay-out are ultimately based on the truthfulness of this disclosure. But what happens when you remember a specific incident or something that you didn’t disclose at the outset?
Key pointers to avoid facing non-payment of claims:
Insurers need accurate information to be able to assess the risk they are asked to carry when someone applies for cover. It’s important to note that South African laws governing insurance transactions place the duty to disclose on the person who is seeking insurance. Insurers are only required to accept information given to them in good faith, and there is no duty on them to investigate anything when you apply for cover. So the buck literally stops with you. Don’t make the mistake of leaving out important facts that could compromise your cover when you or your family need it the most.