We ALL need a solution to our financial planning, but there’s no point buying a risk management solution like insurance, if your claim is going to be rejected. Insurance company will pay benefits payable but do not make a mistake of non disclosure of a material fact.
The following may sound familiar;
1. Death claims – not paid because hypertension (or any other diagnosis) was not disclosed.
2. Total & Permanent disability – not paid because the known fact of having diabetes on medical records was not disclosed.
3. Major illness claim like Cancer – not paid because a previous history of a (similar) tumor removed surgically was not disclosed.
4. Hospital and surgical expense – not reimbursed because the fact that a previous hospitalization was not disclosed.
5. And the stories go on and on.
I would say a major percentage of claims not paid lies with the fact that there was a non disclosure of a medical fact (condition). My response to you is to disclose any condition (you have that is recorded with a medical practitioner) on the insurance application form and let the underwriters decide.
Let me relate an article found in this blog site. The patient was diagnosed with borderline cholesterol. To make a long story short, medication was not prescribed. In subsequent reviews, medication was not prescribed as the doctor advised it wasn’t necessary. The patient while applying for life insurance ‘felt’ that since no medication was prescribed, the borderline cholesterol was not disclosed. The point here is not whether medication was prescribed or not, the point here is that the patient HAS a condition. As a result of ‘innocent’ non disclosure of a material fact, the claim was not paid. No argument about it.
Story 2. A female’s Cancer claim was rejected. Her Cancer diagnosis was Stage Zero. Her ‘assets’ was removed while diagnosed of Stage zero cancer. The argument was that since her ‘asset’ was removed, the condition was grave. (I am not going into detail but I wondered if the condition warrants her ‘asset’ to be removed). Upon presentation of her MAJOR (not minor or stage zero) illness claim to the insurance company, the condition does not satisfy the benefits payable, upon diagnosis of a MAJOR illness (it IS stage zero not grave).
Dear readers please do not assume upon diagnosis of a major illness, that you are guaranteed of a claim. Please read your policy document that there are other factors and condition prior to diagnosis that must satisfy the condition before a claim is admitted.
When in doubt whether a major illness claim is admissible, do not blame the insurance company, the best person to answer that would be your surgeon. If the surgeon certifies that your condition leading to the surgery and the degree of your diagnosis is met (or synchronize with the policy document), then your claim is admitted.
In summary, disclose ALL relevant facts that are previously (medically) recorded into the application form. When in doubt, disclose any material fact on the application form. Hence, when a claim is admitted, the cross reference of your medical report and the original application form will be vetted, if all is synchronize, the claim is admitted.
After reading this and you feel there is an innocent non disclosure, I suggest that you seek the advice from your financial adviser. When in doubt, please clarify the situation. It is better to solve the problem now than to find out later that a claim is not admissible.
I suggest that at your next review with your financial advisor, you should ask him/her to highlight if any future claims will be a problem. If you warrant a separate adviser’s opinion, do take note that the industry standard for vetting insurance policies range from S$ 30-50 per policy.
(I need to stop contributing here as the claim problem is an endless problem and I wouldn’t be able to stop writing. Meanwhile, please feel free to contact me if you have any doubts.)
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