The office of the Ombudsman for Long Term insurance is appealing to consumers to understand their rights and obligations when taking Life insurance. It says about 90% of insurance claims are resolved in favor of consumers. And it’s recovered about R177-million in favor of consumers in the 2020/2021 financial year.
The office of the Ombudsman for Long Term Insurance says it’s seen an increase in the number of claims from consumers relating to Life insurance policies. They range from the terms and conditions that are not met to the waiting period and general poor service.
About 3,600 complaints relating to Life Covers were brought before the Ombudsman in the 2020/2021 financial year. 32% of these complaints were resolved in favor of consumers.
Policyholders are urged to read the terms and conditions of their insurance contracts. Failure to do so can lead to their claims being repudiated.
“I think the starting point is always to get your policy documents and make sure that you know exactly what you are covered for,” Yvonne Barnard-Theron, Assistant Ombudsman: long term insurance.
The Financial Sector Conduct Authority deals with consumer complaints relating to any bridge of the legislation. It’s urged consumers to first try and resolve their complaints with their insurance companies.
Lack of disclosure is one of the challenges that consumers are facing. But the Ombudsman says issues around non-disclosure have reduced in the last 4 years.
Consumers are urged to fully disclose their medical conditions to avoid their claims being repudiated due to non-disclosure. Medical history is often used to determine the risk profile and premiums of potential clients. But other factors such as age and level of qualification also play a role.
“If you do not disclose all your medical conditions you will be put in a risk profile that pays a much lower premium and you are actually taking away the insurer’s rights to properly under right you and that causes problems,” Barnard-Theron adds.
At claiming stage, Insurance companies often require the medical record of clients to establish whether there was any pre-existing illness that was not disclosed. But if an insured person did not sign a disclaimer, giving Insurance Companies permission for this, then consumers have no obligation to do so. This process can often take a long time to finalize and is likely to further inconvenience the grieving family.
“Hypothetically let’s say there wasn’t a concern for medical information to be disclosed then the insurer won’t be able to make the decision of whether to pay the claim or not,” says Barnard-Theron.
The office of the ombudsman says its doors are open to deal with any consumer complaints regarding life covers. But it warns that every case will be dealt with on its merit when it comes to life insurance claims. It could take up to 6 months to resolve less complicated complaints but more complex cases will likely take much longer to resolve.
VIDEO: Consumers urged to know their rights and obligations when taking Life Cover Insurance