This is one of the most common questions people have when seeking Life Insurance - how will a pre-existing condition affect their ability to get covered.
Often people assume that an existing condition excludes them from getting Life Cover. Fortunately, this is not the case, and most people in South Africa will be able to get some level of Life Cover.
There are, however, some important things to understand when choosing and purchasing Life Insurance.
Life Insurance deals with the unpleasant prospect of dying and, like all insurance, it is based on risk. Therefore, factors which influence the timing or likelihood of death will inform the cost of the insurance.
The main cost determining factor is age, which is consistent in its impact within gender demographics. So, Life Insurance for people older than 65 will be more expensive than for those in their thirties.
The second most important cost determining factor is health and lifestyle, and this is where the specifics for each person lead to two divergent types of policy.
The first is a fully underwritten policy which is based on the health status of the insured person at time of taking out the policy. The client’s medical history and any pre-existing conditions are considered to determine their risk and the subsequent cost of insurance. Effectively managed pre-existing conditions should not preclude someone from this type of policy.
The second is a non-underwritten policy with exclusions for specific pre-existing conditions, or a waiting period before the client is covered. For this type of policy the client will not be insured against death from a specific condition affecting them prior to purchase of the policy, or may be subject to a waiting period during which time they will only be covered for accidental death.
In cases where a person does not qualify for comprehensive Life Cover, they could instead apply for Accidental Death Cover – which will provide cover for an unexpected event such as a car accident or similar.
Read more about What is Life Insurance?
Life insurers in South Africa have an excellent track record for paying valid claims. In cases where claims are not paid for fully underwritten policies it is most often due to non-disclosure.
Non-disclosure means that the insured person did not answer completely and/or honestly all the questions asked by the insurer when a policy was taken out. This could include questions relating to pre-existing conditions or health risks.
Each insurer has their own set of questions to obtain the required information from clients. Your duty as a client is to answer all questions honestly and accurately.
Make sure you understand the questions being asked of you and answer truthfully. If you are unsure on what a question is asking, or how best to answer, speak to an insurance agent to assist or decide on the relevance of any information.
Read more about when claims don't get paid out.
For a Life Insurance policy holder, being diagnosed with a condition after being insured should not affect their coverage and they will remain insured as per their policy.
It is important to remember that some insurance products have waiting periods during which time the client may not be insured.
The insurance industry is well regulated in order to ensure fairness for both the insured and the insurer. That said, it is critical to make sure you understand the extent of your coverage as per your insurance policy contract or agreement and any terms and conditions.
Be aware of any general exclusions, which may include clauses relating to suicide or breaking the law.
Read the terms of your insurance agreement carefully and, if needed, have a representative or sales consultant go through the contract with you and clear up any questions you may have.
Life Insurance offers your family financial security in the event of a tragedy and lifestyle or pre-existing conditions, if properly managed, should not affect your ability to get cover.
Here are some questions to ask yourself if you think you need Life Insurance.
What about Salary Protection, Disability Cover or Critical Illness?
Our Life Insurance calculator is easy to use. All you need to do is answer a few questions and you will get an indication of your requirements. We do this by making assumptions, now we all know that assumptions can be dangerous, that is why we let you edit our assumptions in the assumptions tab.
So why not give it a try, we will email you a PDF of your results for your convenience. We will also mail you a link so that you can continue with an online quote via our online quoting system which is incredibly easy to use but thorough enough to give you a price based on your individual risk profile and your medical underwriting.
Posted in Insurance 101 on 06 Sep, 2022