In 2016, Liberty paid out 91.8% of claims, to the value of R4.3 billion. This is 13% more (in value terms) than 2015. At a media event in Cape Town on Thursday, Henk Meintjes, head of risk product development at Liberty, pointed out that during tough economic times, there is an increase in claims submitted, with both the number invalid and valid claims increasing.
Of the total claims submitted in 2016, 0.3% were denied because the claim event was specifically excluded in the policy documents, 1.1% were denied because the policyholder did not disclose important information at the application, and 6.8% were denied because the condition claimed for did not meet the claims requirements specified in the policy documents.
Yet despite this, 2016 saw an increase in the value of the claims paid out. According to Meintjes, there is R17 million worth of claims paid out every working day, or one claim every eight minutes settled by Liberty.
Among the top reasons for claims are cancer and cardiovascular conditions. However, the reason for claiming changes at the various life stages of the policyholders. “Many people believe that misfortunes won’t happen to them but when you consider the statistics, the importance of insurance protection against debilitating events becomes quite clear,” highlighted Meintjes.
Disclosure vs. non-disclosure
However, even if you have various insurance products in place, if you fail to disclose important and relevant information that could affect your claim and/or insurance, your claim could be denied.
The ‘fudge factor’ comes into play here. Meintjes explained that this refers to people not necessarily lying outright on their policy application forms, but maybe glazing over a few of the facts. For example, you state that you went to the doctor to have a lump examined. However, you fail to mention of the policy application that the tests came back indicating cancer.
According to Meintjes, the areas of non-disclosure include medical, financial (such as lying about your salary), occupation (in other words not fully explaining what your daily tasks entail), and then a range of other areas make up a smaller portion.
There are a number of reasons why people will not disclose information:
- Innocent: People innocently forget about, for example, a medical issue they had in their teenage years.
- Partial: This is where people will disclose some of the relevant information, but leave out parts they believe may affect their premiums or claimability.
- Fraud: Here people will outright lie about things that would affect the insurance policy.
- Better terms: People may fail to disclose certain pieces of information in the hope that they will get better terms on their policy.
- Sales process: Here it may simply be that things slipped through the radar when information was captured.
If you fail to provide full medical and financial information when you apply, this could result in a delay in the underwriting process, a cancellation of a benefit, or a reduced payment at the claims stage.
To avoid falling victim to a denied claim as a result of non-disclosure, Liberty advised that you take the time to consider the questions on the application for carefully and provide all relevant information. If you are concerned about disclosing some of the information to your financial advisor, you do have the option to use tele-underwriting, where you contacted a qualified nurse or other medical professional associated with your policy provider who will go through the policy application with you and help you fill out the medical questions.
It is important to regularly review your insurance policies to ensure that they remain in line with your needs. If you are uncertain about what you have disclosed to your insurance provider, and think you may have left something out, Meintjes highlighted that everything that you disclose to your policy provider is attached to the policy document, which you can refer to and contact the provider accordingly.
