The Reality behind the headlines
The recent controversy over Momentum’s repudiation (decline) of a violent death claim on a life policy because of an unrelated, undisclosed medical precondition has kicked a hornet’s nest of opinions, so I thought it was a good idea to expose some of the potential pitfalls in life cover and investment that you may not be aware of and could lead to claim repudiation or investment loss.
The term non-disclosure applies right across the board, from medical aids and gap-cover, short-term insurance and life cover. If you have been to the doctor for anything – even if the medical professional considers it nothing, disclose it or it will come back to bite you.
Medical aids very few options to exclude ‘risk’ from their membership – all they can do is a 3 month waiting period and a 12-month condition specific exclusion – and they enforce that rigorously. I have come across cases of hospitalisation for bronchitis excluded because a cold was not disclosed in a child. In the small print of your application you will have given them the right to investigate your medical history so put in every medical practitioner’s visit, no matter how minor. Any claim made in the first 3 years of a life cover is almost always investigated, thereafter it is only usually if they have their suspicions. Gap covers are governed by different regulations but the same 2 exclusions/waiting periods apply. Just a word of warning, think very carefully before changing gap covers because you might just restart the 12-month exclusion clock. You are under no obligation to disclose whether or not you have a gap cover to a medical practitioner – and there have been instances of practitioners increasing prices to match the gap cover.
When you are taking out short-term (car house etc) you are always asked about your claim history and whether or not you have had any accidents (unsaid – whether you claimed for it or not). Just because you didn’t claim, doesn’t mean you aren’t supposed to disclose. You are also asked if any claim has been refused/repudiated. Don’t fudge this either, even if you’re disputing this or taking it to the ombud.