This story was narrated to me by Angela, a woman who bought 2 insurance plans more than 10 years ago. She is now having difficulty exercising her claims under those policies and is still in the middle of negotiations with the insurer for the payout.
She shared her story with me to help others understand the importance of documentation in insurance, and hopes that others can learn from her example.
Names have been changed to preserve confidentiality – as this matter is still being pursued legally. All other pertinent data are factually accurate. Exact dates have been deliberately obscured. (Editor’s side notes written in italics and denoted with Ed)
Always been a careful person – and good with numbers
I’ve always been someone that is cautious in nature. It has always been in me to question, or double check information presented to me.
Growing up, I never had a problem with subjects like Mathematics because of its precise nature.
For my degree, it was only natural that I pursued accountancy, and graduated with good honors.
Being careful as well as being comfortable with numbers explains why for the past 10 years, I have been working in finance and enjoy what I do for a living.
Caution flew out the window (for a free gift)
In my second year of work after graduation (Ed: in the early 2000s), I recall passing by a shopping complex and there seemed to be some kind of promotion involving insurance.
As usual, my guard was up when I was approached by a staff and he began to explain the promotion to me.
It turned out that they were offering free electronic devices for a set amount of insurance and investment products purchased.
I reasoned with myself: There shouldn’t be any harm in doing this deal. Afterall,
- I was working and had a stable salary
- I did not have any insurance plan whatsoever
- I was a trained accountant, familiar with rate of returns and projections. I should not have any difficulty understanding insurance on the spot.
- This was a good opportunity to get some cover as well as get the free gift
So I went ahead to purchase 2 plans and a structured deposit (Ed: Banking Investment Product). Before the purchase, I combed through the documents presented carefully, paying additional attention to the numbers – How much I would be covered for, how much can I expect to get back after the plans mature.
The sales staff then asked me a few more questions and filled in some forms to be submitted to the insurer. We had been talking about the plans for nearly an hour. It was already late then and I signed the forms since he filled them up in front of me.
At that point of time, it probably saved me 5 minutes. With hindsight, I wish I had spent that 5 minutes to make sure everything was in order. But I didn’t.
A shock: Open heart Valve surgery 10 years later
Sometime in late 2015, something didn’t feel quite right as I was experiencing some severe gastric pains.
After checking myself into a hospital, it turned out I had mitral valve prolapse. It happens when the two valves of the heart are unable to close fully or smoothly. I had to undergo emergency open heart valve surgery and was admitted to the ICU for a number of days.
It was something of a rude shock for me: I never thought that these things happened. I was healthy and never smoked, or drank. I usually don’t even stay up late.
Nevertheless, the operation was a success and I recovered fully. I was relieved to still be a parent to my two wonderful children, as well as a wife to my loving husband. The thought of any claims never crossed my mind.
My insurance agent, however, pointed out to me that based on my existing policies, I was eligible to claim under the Critical illness sections of cover: Open Heart Valve Surgery.
(Ed: When you find an agent like that, hang on to him/her for dear life!)
So I duly submitted my claim.
An even bigger shock: My claims were rejected
I was dumbfounded when I got the reply. What?
I paid my premiums on time.
I am still paying my premiums, right till this day.
Everything was properly signed and acknowledged, and under the terms of the policy, I was entitled to over $32,000 in claims.
Was my emergency heart surgery not considered “serious” enough?
Did I have to go under the knife again just to satisfy their claim conditions?
The Exceptions clause and the Fateful tick
It turned out that I was rejected because of this clause:
The insurer was using that clause to reject my claim because in the early 2000s, I underwent a muscle biopsy. This was a few years before I purchased the plans. The doctor that performed the biopsy could not make any conclusive findings.
And the reason they were invoking the clause was because of this tick:
Looking back, I can now recall the conversation with the sales staff for this particular section:
Him – Do you have any medical conditions right now?
Me – No.
Him – Have you ever gone for any X ray, ECG, etc etc tests?
Me – Yes, during 2000. I had a biopsy done.
Him – What were the results of that? Did they find anything?
Me – No, the results were inconclusive. Do I need to declare it?
Him – Since nothing found, then I think no need to declare. After all, if you declare now, you need to provide the entire report and they will have to analyze. This will delay the application, then you may not qualify for the gift since the promotion period is over.
Me – Ok.
The rest was history.
Doctors Vs Claims Specialists
Today, I am still contesting the insurer’s decision. The claims staff at the insurer seem certain that my heart valve surgery was either directly or indirectly caused by the findings in the biopsy.
My first doctor didn’t diagnose with me any disease or abnormality whatsoever.
My second doctor who performed the heart valve operation feels it happened on its own accord, not having been caused by anything else. Why should the claims specialists beg to differ?
This case is still under legal mediation today, but should the outcome be less than what I seek, I am most prepared to take my case further and exercise all options available to me.
My reasons for sharing
More people need to know and understand what are they getting themselves into when they sign contracts or documents.
Even though my experience with insurance thus far is less than satisfactory, I would still urge people not to shy away from it, but just bear these points in mind:
- Always read what you are signing for, regardless of how simple you think it is – or how capable you are.
- Don’t be swayed by convenience or a free gift. The benefits of the policy far outweigh that of any free gift that you may receive. The convenience you receive could haunt you in the form of claims rejection and the efforts to recover the claim, which has taken me close to 80 hours thus far.
- Never think that you know everything – it always helps to have a second opinion. I wish that I had consulted more independent sources of advice before making that decision. (Ed: Among the 2 insurance plans that Angela purchased, one of them was an Investment Linked Plan, which I explained its nature to her. She would have never gotten it as a first plan if she knew the exact nature and function of the plan, as she does today)
Epilogue (From the Editor)
I thank Angela for her courage in sharing her story. It is certainly not an easy pill for her to swallow, and it is commendable that she took the time to relate all its details to me so that others could benefit in the future.
In all fairness, it is very difficult to say who is right or wrong in this case. In Angela’s mind, she has done which was necessary, and was misled by the sales staff.
For the insurer, they also have to protect all the interests of their policyholders in general. This involves minimizing adverse selection (people who are more likely to benefit from a claim buy more insurance, hence worsening the premium rates for the others).
Insurance must be truly unique insofar as combining the intangible (protection, peace of mind, financial stability), and having some truly technical clauses that we would never come across in our everyday lives.
It is this unique aspect that we find fulfillment in what we do, which is to educate and empower people about Life Insurance, so they can live their lives in financial peace and stability.
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Your story could help others too.
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