Why Insurers Don’t Pay Claims

Johannesburg, 17 May 2018 – Unfortunately many of us don’t realise the true value of insurance until a claim event happens. When that day comes, we are all quick to ask if insurance was in place and understand that insurance is not simply a grudge purchase, it’s an absolute necessity. Here we will look at why insurers don’t pay claims.

Henk Meintjes, Head of Risk Product Development at Liberty says, “When you consider that Liberty paid out R4.46 billion in 2017, the need for long-term insurance cover becomes clear. This is money which our clients and their families need to manage their finances through these difficult times.”

Life and health insurance helps you and your family make lifestyle changes and pay monthly expenses following a death, critical illness or disability, which prevents you from earning your normal income.

Why Insurers Dont Pay Claims

Unfortunately, not all claims submitted to insurers are valid. When looking at all claims received by Liberty in 2017:

  • 8.6% were for conditions that did not meet claims requirements and
  • due to non-disclosure, they declined 1.6% of claims




Non-disclosure – Why Insurers Don’t Pay Claims

Meintjes explains non-disclosure. “When important medical, financial, lifestyle or occupational questions are dishonest or where they give important information when they first got the cover, this is non-disclosure. It ranges from deliberate fraud to innocent omissions where certain information is simply forgotten.”

Dishonesty – Why Insurers Don’t Pay Claims

When insurers find out clients did not answer questions on their application forms fully or honestly. They may reconstruct the underwriting decision. If the information was relevant to the underwriting of the policy, the cover may be declined or offered on different terms including medical loadings, exclusions or limits on the sum. Unfortunately, they only see this new information at the claim stage and may result in denial of the claim.


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All info was correct at time of publishing