Full disclosure ensures your claim is paid out

Lisa Gibbon, Divisional Executive for Onboarding at Liberty

Transparency builds trust – and for the life insurance industry, this means that full disclosure safeguards the consumer’s long-term security, particularly as the country navigates a post-COVID-19 reality and widespread economic instability.

Liberty’s Claim Statistics for 2022 revealed the positive impact of full disclosure and transparency in the insurance application process, as overall, 94% of claims submitted were paid during the year, marking an increase in payments from the previous year during which 93.6% were paid.

Liberty paid out R6.98 billion in claims last year, primarily from its flagship Lifestyle Protector product as well as from other retail life insurance policies.

Lisa Gibbon, Divisional Executive for Onboarding at Liberty says: “The pandemic marked a period of significant loss for many people, including Liberty clients. This is why we are heartened to see the reduction of COVID-19-related claims. However, the tumultuous global economic climate and the ever-increasing inflation rate underscores the real need for insurance, now more than ever.”

The added financial weight placed on households and businesses across the country due to the impact of loadshedding, increases in fuel as well as food costs, have also emphasised the importance of preparation and long-term security.

“Insurers have remained steadfast in ensuring that South African policyholders are provided with the appropriate cover during these challenging times. However, the importance of full disclosure cannot be emphasised enough, especially during the underwriting phase.

“The application process relies on full disclosure between the insurer and the insured;  it ultimately becomes a critical factor in determining whether the tailored cover applied for at the outset comes to fruition when a claim arises” Gibbon explains.

Full disclosure means cover is more certain.

Claims that were not paid by the insurer were a result of factors such as claims being submitted for disease conditions that were not covered in the critical illness policy, or where the claims did not meet the benefit criteria.

Gibbon explains that the latter reason is one of the main causes for the repudiation of claims as these repudiations result from the fact that the condition the client suffers from is not one that is covered by the benefit that the client has on their policy.

“Our reason for existing as an insurer is to fulfil our promises to our clients through offering certainty in times of increasing uncertainty. Our Lifestyle Protector product, which turns 20 years old this year, has broadened the range of protection available to clients through life changes,” said Gibbon.

“However, this journey is one that also requires the valuable guidance of an accredited financial adviser to understand processes, and how to get the most value from your premiums,” Gibbon adds.

It is critical that clients are aware of what their insurance covers to understand which claims are allowed or not allowed in their policies.

In 2022, claims that went unpaid because of non-disclosure decreased from 0.4% in the previous year to 0.3%.

This means that these clients did not disclose, or chose to omit, pertinent information relating to their health, finances, lifestyle, or occupation during the initial underwriting phase.

Furthermore, by thoroughly investigating high-risk claims and following standard industry practices for fraud detection, Liberty was able to eliminate fraudulent claims altogether for two consecutive years.

Get over the fear, bank on trust.

The underwriting process is important and safeguards current and prospective policyholders when the client suffers from a condition for which they are able to claim on their policy.

Whether dealing with a financial adviser or a broker, it is crucial to disclose all requested information truthfully to prevent the possibility of claims being declined in the future.

Whether you already have risk cover, or are seeking insurance, be mindful of the following:

  • Prepare: Underwriting will require specific details regarding your medical history, that of your family (to determine hereditary conditions), financial and occupational information, and your lifestyle practices (like smoking or alcohol consumption). It is important to have this information readily available.
  • Be Honest: Do not provide incorrect information or withhold facts to try to get a lower premium. This may result in your claims being declined, or your policy being cancelled. Rather be truthful and transparent, and even if you aren’t sure if the information is relevant, disclose it anyway. It is also important to be honest about your previous insurance history, if applicable.
  • Build understanding: Even if your financial adviser or broker fills in the insurance application for you, it is your responsibility to read through everything carefully before signing. Make sure you understand the terminology, and the benefits you are entitled to – as well as the policy conditions.
  • Update information: Insurance is a long-term journey. Update your information regularly, and keep your insurer informed of any changes to your medical condition or lifestyle practices as the years progress.
  • Assign a beneficiary: Choose a beneficiary whom you want to take care of, as they will benefit from the proceeds of the life cover.  You may also specifically want to nominate your estate as your beneficiary.
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