Consumers urged to check death, disability and dread disease cover
JOBURG - Angela Mhlanga, head of Bancassurance South Africa at Standard Bank, has urged consumers to ensure they are adequately covered for life insurance claims.
The expert highlighted the necessity of this, explaining that life insurance companies can sometimes refuse to pay out in the event of a death, disability or dread disease if certain obligations were not met when the insurance policy was taken out.
“Consumers need to understand that the policyholder has mainly two obligations to successfully insure a risk – to disclose all relevant information, and to understand the terms, conditions and limitations of their cover,” Mhlanga said.
“Repudiated claims are not uncommon, and this has created the inaccurate perception that life insurers regularly seek legal loopholes to avoid honouring a claim; this is not true since an insurer enters into a contract with the insured based on the risk they are willing to accept.”
Mhlanga explained that to avoid a rejected claim, consumers need to disclose all information relating to that risk as a way to ensure that both parties agree on the terms of the premium and the risk that the insurer is willing to cover.
This then makes it important for new and existing policyholders to understand the limitations in their policies that could result in a payout exclusion, increased premium or decreased cover, or even rejection of a claim.
“These can arise from the occupation of policyholders, their activities or hobbies, or even changes to their lifestyle choices [and] in many cases the claims are repudiated due to dishonesty or relevant information not being disclosed,” she explained.
She further stressed that employment choices played a big role on the risk taken by an insurer, as high-risk occupations will potentially involve a higher premium and more limits to the cover compared with desk-based jobs.
Mhlanga concluded by urging consumers to be as honest as possible with their insurers, especially regarding changes in occupation and lifestyle. “Honesty is indeed the best policy; being accurate and truthful with your insurer will ensure that your loved ones receive the financial support you have planned for them,” she said.
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