Over the years, we have reported many heart-warming stories about insurance.
Mark overcame Stage 3 cancer with the huge dose of courage, determination and some claim payout.
And we have Andrea who was not only kicked cancer in its ass but was also so inspired that she decided to help others too.
That is the life insurance industry that we know and love.
On the other hand, there is another side that we don’t love but begrudgingly accept.
That is the technical side of an insurance contract.
The whole point of insurance
Nobody buys a non-functioning phone, no matter how attractive the aesthetics are.
You will definitely not purchase a dysfunctional vehicle, regardless of how convincing the car salesman is.
Therefore, there are absolutely zero reasons to get insurance if you are denied a claim pay-out when you need it the most.
It is not rare to read about claims being rejected by insurance companies.
The public may be indignant; the press may be scathing.
However, those do not change the fact that when the policy terms and conditions have been breached, the insurer has every right to decline to pay.
The perfect solution to not having your claim declined is to take out your policy, read every single line and make sure you are in total compliance.
But hey, we do not live in a perfect world.
And most of the time, most of us are too lazy to even look for the documents, let alone go through the entire contract.
That is why we painstakingly went through several policies to find some common clauses that may cause your claim to be denied.
So that you don’t have to.
Suicide – killing yourself and your policy
You can’t burn your own house and hope that the insurer will pay.
However, you can kill yourself for an insurance pay-out.
That is AFTER the waiting period which is usually 1 year.
Clearly, this clause is meant to discourage customers that intend to commit suicide immediately after purchase.
A death-seeking individual is unlikely to have either the patience or the foresight to plan his or her suicide one year in advance.
Fun but morbid fact: it is actually illegal to attempt suicide in Singapore.
In any case, if you find yourself walking towards this path of self-destruction, stop and get help.
Regardless whether your policy is already 1 year old or not.
Imagine you had just held up a bank with nothing but a piece of note.
But the security guard shot you on your foot, crippling you in the process.
Thankfully, you did get a huge disability-income insurance policy to pay for the permanent disability right?
Not at all.
Insurance policies are not allowed to cover illegal acts as it is against the public interest.
That is why your motor policy does not pay for your speeding ticket even though it might result in an accident.
Claim tainted by fraud
Thinking of fabricating a medical bill to exaggerate a claim pay-out?
Do NOT do that.
Even if only some part of a claim is fraudulent, you may face the prospect of the insurer denying your entire claim.
If you fabricate a claim outside of Singapore and think that you can get away with it, read the following sentence slowly but surely.
An automotive consultant bought several policies in Singapore on his mother’s life, faked her death in Pakistan in order to make claims but was eventually busted.
Fraud simply doesn’t pay.
Non-disclosure of material fact
If you have nothing to hide, skip this section.
Otherwise, you must never lie on your insurance proposal form.
You run a risk of invalidating your claim if you have done so.
Even if you did not set out to lie, you may have created a misrepresentation by neglecting to disclose certain facts.
This is especially true when it comes to medical conditions.
And misrepresentation leads to claim denial.
Wrapping up the business
It never feels good to be denied of anything.
It is a lot worse when that rejection comes at the time when you are at your most vulnerable.
That is why it is imperative for you to understand these 4 situations whereby you may be denied of your claim payout legally.
Avoid making these mistakes and you will be just fine.
Nevertheless, for the full picture, it is still important for you to run through your policies or at least have your financial advisor explain them to you.
And someone close to you is inching towards these same insurance mistakes, do share this with them!
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.