The main reason why insurance companies or Insurance agents, brokers, advisers etc have a bad name or in general if there is any mistrust in your mind about the above then this post is for you.
The loop hole – Non-disclosure
Non-disclosure; from insurance contracts point of view, simply means the following:
If you did not provide any material information with regards to your health at the time of application it is considered to be non-disclosure
Generally, we are all honest people and we do tend to tell the truth. But then When you have to add details of 30 or 40 years of medical history in a form within constrained time frame, is it humanly possible to remember everything?
Problem with claim on Life insurance policy
Seldom people realise what happens if there is a non-disclosure? The following is from one of the application forms for Life Insurance or Trauma Insurance or Medical Insurance or Income protection insurance or mortgage protection insurance:
HOW NON-DISCLOSURE AFFECTS CLAIMS – When you make a claim we may look further into your personal history. If we discover that you did not
provide us material information we may avoid your policy and decline your claim or at our discretion amend the terms of your insurance policy. It
does not matter if the new information is about a condition unrelated to your claim. If we avoid your policy from its inception, this means that you
would not be able to make a claim as no policy would exist. In addition, all premiums paid will be forfeited.
This means even if you have recovered from that condition and it has been 10 or 20 years, but you failed to mention it, then they can cancel the policy from the day it started.
Scary! Well this is just the beginning!
Now say a Husband, wife or children and filing the claim for someone who has just died and after claim is processed and they identify something on the medical records that was not on the application!!!
So is it always like this, does anyone really get the money from claims?
Answer is yes, many do and when:
- The form has been filed accurately.
- All possible medical information is provided
- If unsure, mentioned clearly that you are unsure
Can still things go wrong? Yes.
Most of the times the first encounter people have with life insurance or trauma insurance or as most bank products are titled “Critical illness cover” they usually fill the forms in the bank, at the counter or in their offices.
Now, in all honesty, how long does one want to hang out in the bank or in someone else’s office in day time and not have the urgency to head back to work!
We can keep going about all the problems and issues one may not know when they are getting insurance. But I’m sure you are more interested in solutions now so here they are:
Keep in Mind
- While your medical history is personal, your adviser needs to know, think of him as your doctor and share information without worrying about what they will think of you!
- Fill the form at your comfort, try doing it from your own home if you can.
- Don’t put time frames to fill the form, take as long as it takes.
- Mention even the smallest thing, I’ve had clients mentioned sprains they had 25 years ago, impacted tooth, birthmark removals, name it and I would have got it on paper.
- Whatever you are unsure of say so.
- Doesn’t matter if you remember the exact dates, but any event for health related conditions in any year should be added.
How can one be sure they will be able to get this done with certainty!
This is where we come in! This is what our clients do! They fill out the forms sitting in front of the screen where we are on the other side. They can sit easy relaxed in their favourite chair or lying in their bed, while we go over all the questions and get the information added to the form and send it to them to review when we submit it.
We make sure that during the underwrtiting any change of information or any recollection of any other incidents that come to mind are recorded and added to the original form.
So the summary of this discussion is that while you can get this done by yourself and feel confident about the whole process, there is a clear need to have a pair of eyes looking at it from a different perspective… the perspective of making sure that you get the claim!
If this makes you feel doubtful of anything thats been done or you feel you need the fresh pair of eyes, please feel free to contact me on the details below :
Advisory Network Insurance Brokers
Toll Free: 0800-456-427