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Don't risk declined or reduced claims

4 April 2023
5 minute read
mother and son

1Life Insurance policy claims are paid quickly, if all the required documentation is received and the claim is valid. If documents are not submitted in time, pay-outs can be delayed or declined. There are also some cases where a pay-out may be reduced. Make sure you and your beneficiary know these important terms and conditions so a claim can be processed and paid quickly!

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You must claim in time

It may seem unlikely, but there have been many cases where claims are not submitted in time. This could be because the beneficiary does not know about the policy and doesn’t submit a claim. If you don’t submit a claim within the time specified it could be declined.

When must a claim be submitted: Death claims for a life assured on a 1Life Insurance life policy and/or a member on a 1Life Insurance funeral policy must be made within 6 months of the death.

Who submits a claim for a life policy: The beneficiary or beneficiaries can submit a claim on the death of the life assured.

Who submits a claim for a funeral policy: The principal member can submit a claim on the death of an additional member. If the principal member passes the beneficiary can submit a claim.

How to initiate a claim: The claimant needs to tell 1Life Insurance that there has been a death and that they intend to claim. They should also ask for further details on how to claim, such as what documentation is required.

Top tip: Tell your beneficiary and family what policy you have, where it is and how to claim so they can claim in time!

You must submit requested documents in time

When you tell 1Life Insurance of the claim we will advise you what documents are required, such as a death notice. You need to submit these within 3 months of 1Life Insurance requesting them.

Top tip: Make sure 1Life Insurance has the correct contact details for the life assured, principal member and any beneficiary or person submitting a claim so we can contact the relevant person and ask for any outstanding documentation.

You must lodge any disputes in time

If you wish to dispute a claim, for example the claim is declined or reduced (the pay-out is less than the sum assured), you have 90 days from the decision on the claim to lodge a dispute with 1Life Insurance (tell us you are unhappy and why). You can email us on [email protected]. We will respond to you within 10 days of receiving the dispute. If you are unhappy with our response, you can lodge a query with the Ombudsman for Long-term Insurance within 6 months of our response to your dispute.

Why claims may be declined

This can happen if there is material non-disclosure, such as you don’t tell 1Life Insurance you have had a heart attack when you apply for insurance. Claims may also be declined if:

The cover has expired on a life policy

For example occupational disability cover expires when the life assured reaches the selected retirement age, or age 65, whichever is earlier.

A child member is no longer covered on a funeral policy

Children under the age of 21 can be covered as additional members on a funeral policy, or up to age 25 if they are full time, dependent students. Children over these ages cannot be covered on their parent’s 1Life Insurance funeral policy. They can, however, take out their own funeral policy.

Top tip: Review your policy annually and make sure you inform 1Life Insurance of any material changes, and that all the child members on a funeral policy still qualify for cover.

You can read more about why claims may be declined, reduced or delayed on this blog.

Why a pay-out on a life policy may be less than the sum assured

There are cases where all documentation requested for a claim is received and the claim is paid, but the pay-out is less than the sum assured. For example, the sum assured on a life policy is R500 000 and R450 000 is paid. These are two reasons why:

An accelerated benefit was paid

Accelerated benefits are amounts that are paid from the total sum assured for certain benefits. The remainder of the sum assured is paid at a later date. This means you can receive some of the full sum assured in one payment, and the rest in another payment.

For example, 1Life pure life policies have a R50 000 Pay now death benefit that can be paid quickly to cover the costs of a funeral. This amount is not an extra amount added to the sum assured, it is part of the sum assured. If you have life cover for R1 000 000, including a Pay now death benefit, the R50 000 can be paid within 48 hours of the valid claim so you can cover funeral costs. However, when the remaining valid claim is paid, the pay-out will be R950 000, because R50 000 has already been paid.

Your continuity of cover was broken

Continuity of cover means that you continue to enjoy cover and don’t have to undergo any further underwriting for your life policy, unless there are significant changes. There are 4 changes you must inform 1Life Insurance about as they can affect your cover. These are:

  • Taking up smoking
  • Changing your occupation
  • Taking up a hazardous pursuit such as bungee jumping
  • Being outside of South Africa for longer than 14 consecutive days

For example, if you take up smoking, neglect to tell 1Life Insurance, and unfortunately pass on, your claim may be reduced. This is because smokers have a higher mortality rate than non-smokers, (they die earlier) and so have higher premiums. For example, if your R500 as a non-smoker bought you R1 000 000 cover, it may only buy you R750 000 as a smoker*. If you neglect to tell 1Life Insurance you took up smoking your claim may be adjusted and sum assured reduced to reflect smoker rates.

Final thoughts

Insurance policies are contracts. Make sure you and your beneficiaries know the important terms and conditions so you and your loved ones are covered and can claim when they need to. The vast majority, well over 95%, of insurance claims in the country are paid. To make sure your claim is paid, read your policy document, make full and honest disclosures when you apply for insurance, make sure you or your beneficiary know that you have to claim in time and keep 1Life Insurance informed of any important changes!

*Figures are for illustrative purposes only and do not reflect actual policy premiums or sums assured.

The information contained in this article was correct at date of publication

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