ConsumerTalk with Wendy Knowler

Here's how material non-disclosure affects life insurance claims

Disputed insurance claims have been a hot topic recently, following the saga involving Momentum.

Momentum announced last week that it will pay out a death benefit (not exceeding R3 million) for all clients killed in a violent crime, regardless of their prior medical history.

The provider decided to pay R2.4 million life insurance policy to a Durban widow whose husband was gunned down in a hijacking, after a great deal of public outcry.

The company had initially come under fire for refusing to pay the sum claiming the victim, who died in a hail of bullets, failed to disclose that he had suffered high blood sugar levels.

Read: Life insurance 101: Mention every detail of your medical history - consumer guru

Consumer journalist Wendy Knowler explains that material medical non-disclosure can jeopardise an insurance claim.

An insurance policy can be cancelled on the basis of material non-disclosure only if the undisclosed medical condition or diagnosis would have stopped the insurer from granting the policy in the first place.

In other cases of non-disclosure, the insurance firm must reconstruct the policy taking into account the increased risk profile and higher premium in order to determine what to pay in the insurance claim, Knowler says.

Also read: Momentum to pay all violent crime claims, regardless of previous medical history

Knowler says life insurance companies should investigate a client's medical history when a policy is taken out instead of when the beneficiaries make a claim.

Meanwhile, financial advisor Martin Godfrey says insurance brokers need to be more thorough with their questions.

They discuss the life insurance industry's rights to reject a claim, the Momentum saga and examine another case study.

Material non-disclosure means that a reasonable person should have known that that [information] was material to the policy they were applying for.

Wendy Knowler, consumer journalist

The cause of death, in terms of South African insurance regulations, is not relative or applicable when you don't disclose something.

Martin Godfrey, financial advisor

By not disclosing, he lied. Whether it was intentional or not is not the answer and not the question.

Martin Godfrey, financial advisor

The insurer needs to know everything they can.

Martin Godfrey, financial advisor

Listen to the entire ConsumerTalk discussion during The Pippa Hudson Show:

Every Wednesday, on The Pippa Hudson Show, Wendy Knowler provides useful insights and tips on how to make the most of your buying power.

For more stories visit the ConsumerTalk feature page.

Got a consumer case you need help resolving?

Email: consumer@knowler.co.za, put Cape Talk in the subject line, followed by the issue e.g. cellphone contract dispute.


Recommended

by NEWSROOM AI
Read More
Elderly people prime targets in spiking credit card fraud, banking ombud warns

Elderly people prime targets in spiking credit card fraud, banking ombud warns

The Ombudsman for Banking Services has seen an alarming spike in credit card fraud since January this year, aimed at pensioners.

MTN fee hike could've been executed better, says consumer ombud

MTN fee hike could've been executed better, says consumer ombud

Consumers have spoken out against the decision by MTN to unilaterally increase these fees mid-contract, explains Wendy Knowler.

 'Valid for today only!" - how online retailers pressure customers to spend

'Valid for today only!" - how online retailers pressure customers to spend

Consumer journalist Wendy Knowler shares some of the tactics used to rush consumers into making a deal and how not to fall for it.

Dealerships must pay for cars damaged or stolen in their care, it's the law

Dealerships must pay for cars damaged or stolen in their care, it's the law

Once you hand over your keys to a car dealership, the Consumer Protection Act says that they are liable for anything that happens.

Howler CEO responds to complaints about the new cashless system used at events

Howler CEO responds to complaints about the new cashless system used at events

Some Howler users have complained about the slow refund process, while others claim to have been overcharged at events.

Is your car one of thousands to have been recalled so far this year?

Is your car one of thousands to have been recalled so far this year?

'In South Africa the recall of cars applies to thousands across seven of manufacturers' says Wendy Knowler.

Popular articles
Meet Woolies slayer Shannon McLaughlin, founder of Ubuntu Baba Baby Carrier

Meet Woolies slayer Shannon McLaughlin, founder of Ubuntu Baba Baby Carrier

Ray White interviews McLaughlin, about three months after she shot to fame for taking on the alleged copycat, Woolworths.

Gordhan's lawyer wants Mkhwebane to supply proof of 'special circumstances'

Gordhan's lawyer wants Mkhwebane to supply proof of 'special circumstances'

Gordhan’s lawyer Tebogo Malatji says the minister is facing a fourth probe into the same issue of the Sars investigating unit.

Khulu Phasiwe: My little boy would repeat everything I said about load shedding

Khulu Phasiwe: My little boy would repeat everything I said about load shedding

Former Eskom spokesperson describes how his duties in dealing with the media often began at 5am and lasted until 10pm.

Cape Town train fire CCTV footage leads to arrest

Cape Town train fire CCTV footage leads to arrest

Regional head of Metrorail Richard Walker discusses the Sunday train carriage fires and the arrest of one suspect.