When a Policy won’t pay out?

Worried whether Different Life will ‘Um and Ah’ with your claim?

This is always a sticky question. Ask any insurer: The number one cause of claims being rejected is because of non-disclosure.

Non-disclosure is when you fail to tell the whole truth when applying for cover. At Different Life we’re trying our best to play fair with you.

For instance, you’ll notice when answering our health questions, that we’re not asking you to remember things which happened 40 years ago. We only ask about health issues which have occurred during the past 5 to 10 years.

In the interests of full disclosure, we know that not everyone is open and honest with us when applying. This means we need to ask the awkward questions at claim stage, and if the two versions don’t match up, then it can affect the outcome of your claim.

In other words, rather get a ‘no’ from us upfront than have us say ‘no’ to those you love later.

Getting back to the exclusions…

Different Life has really tried to make your insurance contract as simple as possible, and we think you’ll agree. Each of the benefits on offer has different situations when a claim won’t be paid. Let’s take a look at each of the benefits and when they won’t pay.

Life insurance

There is one very important exclusion:

  • If you cause your own death, and it is our belief that you committed suicide or attempted to commit suicide

Then, depending on how you answered the underwriting questions, there could be other exclusions which you will be made very aware of right at the beginning.

For example, let’s say you have high blood pressure. If this was somehow an issue , death caused by either heart attack or stroke may be excluded,  but you’d know about it when applying.

Let’s move on.

Salary Protection

During the first 12 months

Two important things to remember here:

  1. No monthly income will be paid for the first 3 months of your claim. In other words, you keep paying your monthly cost during those 3 months but you don’t get to enjoy the benefit yet.
  2. From month 4 onwards you will; be paid 75% of your monthly after tax income. This will be tax-free.

For the first 12 months of your disability or illness, you will be paid if you cannot work at your specific occupation.

From month 13 onwards it changes

After the 12 months have expired, you will only qualify for the monthly income IF You can’t work in any other occupation for which you are suited by means of:

  • Skill
  • Education, and
  • Training

This monthly income will continue to pay until:

  • You recover from the disability or illness
  • You turn 65, or
  • You die

You also cannot claim when:

  • You’re actively participating in war, riot, terrorism and anything related.
  • Your injury is self-inflicted
  • You fail to provide evidence of your ongoing disability
  • You fail to follow reasonable medical advice in order to prevent the disability
  • You excessively consume alcohol, drugs, medication

Moving onto…

Critical Illness Cover

Remember that this is a benefit which pays out upon your being diagnosed with one of the pre-defined critical illnesses.

But a claim won’t be paid unless you first survive for 30 days. Why not? Because then there would have been a payout for a critical illness claim as well as a potential life insurance claim. Please don’t get mad - all life insurers have the same 30 day waiting period.

If the condition is caused by the intentional consumption of poison, drugs, fumes, or medication which is not prescribed by a doctor, then the claim won’t be paid  either.

Lastly, if a particular condition is excluded based on how you answer our health and lifestyle questions, then the claim won’t be paid..

For example:

  • You have high blood pressure and high cholesterol.
  • We exclude cover for heart attack and stroke.
  • You then end up having a stroke,
  • With the result that we don’t pay your claim

But this won’t come as a surprise since we will make you aware of this exclusion when applying for your life insurance.

And last but not least…

Disability Cover

Remember that the Disability Cover expires when:

  • Your turn 65
  • Your retire (earlier than 65), and
  • You die

Many of the exclusions which apply to Disability Cover have already been mentioned under Salary Protection. Here they are once again.

You cannot claim when:

  • You’re actively participating in war, riot, terrorism and anything related.
  • Your injury is self-inflicted
  • You fail to follow reasonable medical advice in order to prevent the disability
  • You excessively consume alcohol, drugs, medication unless prescribed by a medical doctor

The other exclusion would be a health exclusion because of how you answered the health and lifestyle questions. Once again this would be  communicated upfront when applying for the cover.

There you have it. No grey areas.

Here is our three-step process to bullet proofing your claim

  • One - Tell  the whole truth, and nothing but the truth, when applying so that your risk can be honestly assessed
  • Two – Read the offer to see whether any risks because of health or lifestyle have been excluded
  • Three – Read your policy wording to see when you can and cannot claim.

No insurer wants to not pay your claim. There is no greater satisfaction than being able to bring a silver lining to someone’s grey cloud.

At Different Life we know that, which is why we make life different.


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Posted in Insurance 101 on 10 Aug, 2017