Insurance companies pay the large majority of their claims on time, helping millions of South African policyholders and their families cope financially. But there are a few cases where things go wrong, and claims are declined or delayed. Here are some of the reasons a claim may be declined and tips on how to avoid these situations.
1. You have not fully disclosed a medical condition or symptoms of a medical condition
A small number of claims are rejected by insurers each year in South Africa because the life assured did not disclose or fully disclose important medical information, for instance, having a heart condition, or diabetes, or having previously received treatment for cancer. If an existing condition or symptoms that indicate there is a condition such as an irregular heartbeat have not been disclosed, the insurer will reject claims related to that condition. Make sure you disclose all medical conditions and serious symptoms, no matter how insignificant they might seem.
2. A claim is submitted for an event in a waiting period
Many life cover and funeral policies have waiting periods, which is the time between when a policy commences and premiums are collected, to when claims for certain events can be made. A claim submitted in a waiting period will be declined. For example, 1Life Funeral Cover policies have a 6-month waiting period for death from natural causes. All six premiums must be paid during this period. If a person takes funeral cover on 1 July and dies as a result of a heart attack on 4 September, this event happened in the waiting period and the claim will be declined. The waiting period applies to the event for which the claim is made, so if a claim is submitted outside the waiting period for an event that occurred within the waiting period, the claim will be declined. Note that new waiting periods will be applicable on reinstated policies, unless otherwise specified.
3. Your policy has lapsed
One or two missed premiums can result in a policy being suspended or cancelled. Miss one premium and 1Life will give you a grace period of one month to pay the premium, miss two premiums and benefits will be suspended. Miss more than two premiums and your policy will lapse. A policy that has been suspended or lapsed is no longer active – no longer what insurers call “in force”. A claim on a suspended or lapsed policy will be declined.
4. You claim for an excluded event
For example, if you had lung cancer before you took out your dread disease policy, claims as a result of lung cancer going forward may specifically be excluded. If the life assured is diagnosed with lung cancer and submits a claim for this on their dread disease policy, the claim will be declined. Life cover policies also have general exclusions, such as the 24 month suicide exclusion, which means that if the life assured passes on as a result of suicide within 24 months of commencement or reinstatement of a policy, the claim would be declined.
5. You claim for benefits your policy doesn’t have
Life cover and funeral policies pay out when the life assured and member passes on. Policies such as dread disease and disability pay out claims when a specific event happens, usually after a defined medical explanation and diagnosis. It can happen that a benefit is claimed for when a policy does not have that benefit. For example, a disability occurs, and a claim is made on a life cover policy. This claim will be declined because there is no disability benefit on the policy.
6. Your details on the policy document don’t match your details at claim stage
Insurers need to be 100% sure they are paying a valid life cover or funeral policy claim to the right person. If the names and ID numbers of the life assured, life insurance beneficiaries or funeral cover policy members on a policy document don’t match what is on their ID documents, or the details provided at claim stage, the insurer may decline the claim. They may also investigate the claim, which takes time, to see if there was an error on the policy document or if the claim is fraudulent. Make sure all details are correct so that there aren’t delays when it comes to claims stage.
7. The relationship of additional members to the main member on a funeral policy is unclear
In many insurance policies, relationships such as brother, mother and cousin have specific definitions and are relatives by either blood or formal marriage. In South Africa, we often care for extended family members who may not be blood or marriage relatives but are still known as cousins, brothers and sisters. When the exact relationship of additional members to the main member on a funeral policy is unclear, and particularly if the additional member is not a relative by blood or marriage, that might result in a claim being declined.
Claiming on an insurance policy can be easy
Insurers like 1Life want to pay claims as quickly as they can, so that you can avoid financial distress. But they also need to make sure that the terms and conditions of the policy are followed and that they pay the right claim to the right person. When you’re checking your insurance each year, check the details on your policy such as your name, benefits and exclusions so that your claim will be quick to process when the time comes.
Original article published on: July 3, 2020
Updated on: July 27, 2021