Non Disclosure

Claim officers are quick to use the non-disclosure clause to reject life and health insurance claims. They are treading on dangerous grounds.

Most life insurance policies have an "indisputable clause". The insurance company is not allowed to dispute a claim after a certain period (say 1 or 2 years), except in the event of fraud. To dispute the claim, the insurance company has to prove that the policyholder intends to commit fraud. The burden of proof is on the insurance company.

To reject a claim within the disputable period, the insurance company has to show that the non-disclosure is deliberate, i.e. that the policyholder knows about the medical condition and deliberately withhold it to get the insurance accepted.

Here is my advice to a policyholder who faces a rejected claim on the grounds of non-disclosure.

1. Ask the claim officer to state the following:
a) The wording of the non-disclosure and indusputability clause.
b) The facts and evidence to support their decision to reject the claim

2. Present your facts in writing to support your position that the policyholder acted in disclosing relevant information.

3. Meet with the claim officer and manager to resolve the matter. Have any formal decision recorded in writing.

If you decide, at a later stage, to bring a complant to FiDREC or to take up a legal case, your position will be supported by the written evidence.