A claim rejected due to non-disclosure causes a great deal of stress for everyone involved
According to a recent survey nearly 5% of all life and serious illness claims are declined due to the fact that customers did not disclose all relevant medical facts at the application stage.
Read and weep people, but do not forget to disclose all relevant information. The consequences of non-disclosure can potentially have profound impacts.
It’s so much better to be safe than sorry. Find out what motivates people to not disclose information… you never know, you might unwittingly do it yourself.
What is Non-Disclosure?
It is a term used to describe a situation where an insured person acting on their behalf gives false information or omits to disclose a material fact. The insurer may consider the policy to be invalid and take steps to protect the interest of the company and its existing policyholders.
Always disclose full details, even if in doubt about the fact.
Fraud & Deliberate Non-Disclosure
This is usually rare, but it happens. This is an area where brokers must take all precautions and act in due diligence.
It is possible that you will be caught if the broker believes that you have given misinformation and can ask the life company to request additional proof. This may amount to a doctor’s note if they suspect you of withholding facts or giving the wrong information.
Attitudes & Beliefs
- “Sure it doesn’t matter” – Sometimes customers fail to understand the consequences of not providing the full picture of their health. Well, it does matter and even if you get past the application stage the insurance company may conduct random sampling and request medical evidence. Your broker is obligated to provide clear examples and explain the full consequences of non-disclosure under ‘The Consumer Protection Act 2012’.
- “It won’t happen to me” – We humans approach life with a happy disposition, at least regarding our health. We don’t think too often about the day we will die or about one’s mortality. The average age for Serious Illness claims is 49 and for death claims on Life Cover it is 58.
- “I won’t get cover if I disclose” – A lot of customers feel that by disclosing a condition they will be declined cover or won’t be able to afford a ridiculously high premium. Nearly 90% of lives are accepted at standard rates so don’t worry. This area is often problematic for people with hypertension or those who suffer from mental health issues.
We often may feel under pressure when purchasing mortgage protection as we see it as a necessity, which we must have. Under these circumstances you may not appreciate the implications of non-disclosure.
Ask your broker to give you an information guide on non-disclosure and remember to read every question very carefully when filling out the form.
If you are still unsure, ask your broker to run through the questions with you.
One thing we are all guilty of is glossing over things and not giving a second thought to it.
Sensitive Issues
Some conditions are often a source of embarrassment, uncertainty or denial with individuals. However, it is important to make note of everything. Here are some examples:
Mental Health – Unfortunately, a stigma still exists in regards mental health issues and people may be reluctant to disclose this information. Never be ashamed of something like this.
Alcohol Abuse – Sufferers may be reluctant to disclose this history as they feel there is nothing wrong with them or are embarrassed by their condition.
Investigations Pending – Referring to pending results is important as this in itself may be the motivation for taking out life cover.
Cardiovascular Factors – “I’m only a social smoker”. The insurer has heard this before. Note that the Irish Ombudsman regards non-disclosure of smoking habits as deliberate non-disclosure.
Gynaecological/Prostate or Urinary Disorder History – As personal as this may be, remember to write it down.
Benefits of Full Disclosure
- Personal reassurance
- Fair premium
- More affordable premiums
- Faster underwriting
- Faster claim payments
- Less exposure to the Ombudsman and legal disputes