Despite previously sticking to their guns over a rejected life cover insurance payout to a client who had not disclosed a pre-existing condition even though it was not related to his violent death, life insurer Momentum has been pressured into paying out the R2.4 million he was insured for to Nathan Ganas’ widow, Denise.
The company made the announcement on Tuesday and added they would be doing the same for other families who had faced being declined after a family member falling victim to violent crime.
BREAKING: @Radio702 reports that @Momentum_za has offered Natalie Ganas R2.4 Million. Johann Le Roux has just told @brucebusiness. many other clients in similar position will also be paid. A number of clients have already been identified
— Sipho Masondo (@vercingetorics) November 20, 2018
The company said in a statement: “It is clear from market reaction over the last two days that under certain circumstances, current industry practice creates the impression that insurers are looking for reasons not to pay a claim. Momentum is in the business of paying claims and we have therefore taken the criticism to heart. We have created a solution that will pay an amount equal to the death benefit (limited to a maximum of R3 million) in the case of violent crime, regardless of previous medical history. This will apply to all existing as well as future life cover clients.”
They said the payout would be fully funded from Momentum’s profits and not from clients’ premiums.
“The guarantee will pay out when the death was a direct result of violent crime, even when material medical non-disclosure impacts the legitimacy of the contract.
“The payout is not in addition to the normal death benefit. It only applies in circumstances when the death benefit will not be payable or has been reduced.
“Momentum reserves the right to reject any fraudulent claims.
“The guarantee will apply immediately to all our life cover clients, and will be applied retrospectively. We are identifying clients who were impacted in this way and we will contact their families to arrange payment. This includes Mrs Ganas.
“The importance of full and honest disclosure at application stage cannot be overemphasised.
“The only time your health status matters, is when you apply for cover. This is when you need to share all your medical and health information. If your health deteriorates after commencement of the policy, there is no need for you to inform Momentum – your claim will be completely valid if the information provided at the start of the policy was accurate.
“With exception of the new guarantee, full disclosure remains non-negotiable to ensure peace of mind.
“We care for our clients and always strive to solve for their needs. We hope that this solution illustrates that.”
They had earlier declined the application for the life insurance payout for the Durban resident, who was killed in a hail of bullets trying to protect his wife, Denise, during a hijacking in the driveway of their Shallcross home last March.
Ganas’ claim was declined by the insurer on the grounds he had not disclosed that he was diagnosed with raised blood sugar levels, which may have occurred before he completed his application for the policy in 2014.
This past weekend, Momentum contended on social media with users expressing their disappointment over the insurer’s rejection to pay the life cover. In a lengthy statement, Momentum said it was truly sorry for Ganas’ tragic death and also had sympathy for the views that the cause of death was not related to the non-disclosure.
But the insurer said that paying the claim would result in an increase in claims which would ultimately increase the premiums for all other clients just because “a client has not acted in good faith”.
“The rejection of the claim was referred to the Ombudsman for Long Term Insurance, who determined that Momentum’s decision was the correct one under the circumstances. In this instance, had the information been known to us, no cover would have been issued in the first place, and no claim would have been paid, regardless of the cause of death,” said Momentum.
The drama surrounding their refusal to pay the claim has had a major impact on the public perception of the company, with many vowing to move their policies to different service providers.
(Compiled by Charles Cilliers)