Why was my claim declined for pre-existing condition?
PERSONAL Accident and Sickness Income Protection would have to be one of the most important types of insurance policies you could possibly have, especially as an employee (wage earner).
However it would also be the most contentious, misunderstood and abused insurance policies in the market.
For the purpose of this discussion forum, when we refer to “Income Protection” we are referring to “Personal Accident & Illness Income Protection”. The intention of such a policy is to provide the policy holder with a portion of their usual income, whether that be a nominated sum insured or an average of their income over a 12 month period prior to their claim date. In general, these types of policies only cover the policy holder for New Injury or Illness.
These policies always contain Exclusions for some types of illness and injuries, as such, it is very important to understand what you will be covered for and for what you will not be covered for before taking out a policy.
All insurance policies have what is referred to as “Terms & Conditions”.
In its simple form “Terms” essentially means the amount and type of cover for which you have selected and appears on your “Schedule of Cover” from which your premium is calculated.
The “Conditions” of your policy are basically the rules for which you must abide by for the policy to remain effective. One of the “Conditions” contained within most policies is called the Reporting Period. What this refers to is, that for every illness or injury the policy holder suffers that has the potential to lead to a claim must be reported to the insurer with the specified time frame provided within the policy.
Example Only: If your policy has a 30 day reporting period under your “Conditions” you must seek medical treatment as soon as practically possible to prevent the injury or illness from deteriorating and report it to your insurer within 30 days reporting period from the time the injury or illness occurred. If you fail to report the injury or illness to the insurer within the “reporting period” of your policy, or fail to seek medical treatment for the same, the insurer may have reason to decline any future claim made that is related to your unreported injury or illness, as this may be considered to be a pre-existing injury or illness.
To cut to the chase, and put it simply. The most common reason an insurer will decline a personal accident and sickness claim, is simply because the policy holder has not been aware of and/or abided by their responsibility under the “Terms & Conditions” of their policy.
You should always make yourself aware of your responsibilities under the Terms & Conditions of your policy either by reading them yourself or asking your insurance broker to explain them to you. If you abide by the Terms & Conditions of your policy, have had no pre-existing injuries or illness as defined under the policy and your injury or illness is not an Exclusion under the policy, there should be no reason for an insurer to decline your claim.
Remember, the major reason any insurance premium is increased is because a lot of claims are being paid out. That being said, Personal Accident & Sickness Premiums have increased significantly over the past couple of years, which would suggest that many more claims are being paid than declined
I personally am a big believer in personal accident & Illness income protection, especially for any wage earner. If we lose our ability to earn an income, we will struggle to feed the family let alone pay bills; you may not even be able to pay for the insurance on the house or car! It’s that simple.
Personal Accident & Sickness a very important insurance to have, but please, make yourself aware of your “Responsibilities” under your policy.
Important: All answers and information contained within this article should be considered as General Advice Only. This advice should only be considered as General in Nature and its intent is only to prompt the readers to investigate their own individual insurances. It has been prepared without taking into account the readers own individual objectives, financial situation or needs. Because of that, before acting on the above advice, the client or any persons should consider its appropriateness (having regard to their objectives, needs and financial situation) and seek further independent advice from their own financial advisor.
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