- Posted by Roger Hendricks
- On 02/20/2017
- 0 Comments
This article is the reason why we are in business. Instead of the client disclosing all relevant medical information at application stage, the insurance company goes out and gathers all the information at claim stage.
How is the client responsible to remember all relevant medical information? Most clients cant remember what doctors they have seen in the last 6 months never the less in their whole life time.
We as DiscloseAll take it upon ourselves to gather all medical information on our client’s behalf and disclose all the information on application stage. This means that once a claim gets submitted. The insurance companies can not investigate or find anything else that the client forgot or failed to mention. In other words – No more non-disclosures
This is OUR service to OUR clients.
Non-disclosure: the main culprit of repudiated claims
John’s policy commenced on 1 January 2013. He selected a temporary income protection benefit with a 14 day non-retrospective waiting period. At underwriting stage, he disclosed a back condition which resulted in a spinal exclusion.
On 1 March 2013, John notified FMI of a claim for the period 12 February to 18 March 2013 for a surgical procedure to treat a gastro-esophageal condition. Medical investigation revealed that he had been on chronic treatment for the gastro-esophageal condition before the commencement of his policy but had failed to disclose the condition at underwriting stage.
The claim was declined based upon the fact that had FMI known about the chronic treatment for the gastro-esophageal condition, an exclusion would have been applied to the policy and therefore the claim would not be valid.
Heard a story like this before? Insurance companies are often seen in a bad light for not paying claims. But the truth is that many repudiated claims are a result of non-disclosure. Last year, the majority of FMI’s repudiated claims were as a result of policyholders not telling the whole truth about previous medical conditions at application stage.
According to Magda Briers, FMI Head of Claims, “Over the past two years, we have seen a significant increase in the level of non-disclosure on policies. And over the past two to three years, we have seen a significant decrease in the time from policy inception to the date the first claim arose, particularly in cases where non-disclosure is found.” This could mean that applicants are deliberately withholding important medical information or that they do not know which information to share with the underwriter handling their application.
Troubles at claim stage
Non-disclosure is usually discovered during claims assessment where the claims assessor reviews the application information as well as the claim information to identify whether the original information was complete and accurate and the claim is valid.
This is often where issues of non-disclosure arise by which stage it is too late to do anything about the situation. The claim is repudiated, and the policyholder is most often unhappy, even if they understand why their claim has not been paid.
What the industry needs to do
The best way to deal with non-disclosure is through client education. Insurance applicants need to understand that it is too late to disclose important medical information at claims stage and that ignorance of what should have been disclosed at application stage is no excuse.
Instead of a fear-based approach, we encourage advisers to explain the application process to clients. They need to understand that if a pre-existing medical condition applies, they will probably still receive cover but with a loading or an exclusion. While this might be seen by some as hampering their chances of a claim, the opposite is actually true; if you know what you are covered for, you can avoid a long and frustrating claims process, safe in the knowledge that when you do claim, your claim will be a valid one.
While some policyholders may hold back medical details during application stage for fear of not receiving the cover they want, others might not know that they need to disclose certain conditions in the first place. It is important for applicants to disclose all historical and current medical conditions up-front, leaving the decision of relevance up to the qualified underwriters handling their application.
Read more: https://www.fanews.co.za/article/magazine-archives-fanews-fanuus/60/life/1313/non-disclosure-the-main-culprit-of-repudiated-claims/18982