How withholding information could affect your claim

Be the 1 to change your family’s life! The pay-out from your life cover policy means you can leave something behind for your family to help them pay expenses after the funeral and build generational wealth while your funeral policy ensures a beautiful send-off for your loved ones. Unless of course your claim is declined! Disclose all material information and a valid claim on your policy will change your family’s life for the better!

Talk to us if you are concerned that you have not disclosed fully

This blog explains how non-disclosure could affect your claims and how you can ensure you have shared all material information with us.

We are here to help if you have or think you may have neglected to share material information with us.  Please contact us or your financial adviser so we can go through your policy and application to make sure your risk was accurately assessed, and that future valid claims can be paid quickly and in full.

Top tip: Material information is the important information you need to share with us to enable us to accurately assess your policy and monthly premiums.

1Life Insurance funeral cover policies

Your 1Life Insurance funeral policy is not underwritten. This means you don't need to disclose any information about your health or occupation, or risk a claim being declined because of non-disclosure.

1Life Insurance life cover policies

How dishonesty could affect your claim

There’s a straightforward outcome to this one – dishonesty on a life insurance application can mean a claim is declined! Here’s why.

When you apply for life cover you are asked about your personal details such as education, as well as questions about your health, occupation and any dangerous hobbies such as bungee jumping. Underwriters use your answers to accurately determine your risk and the appropriate premium for the sum assured requested.

If you don’t share the information when requested, it amounts to dishonesty, or, in insurance terms, not disclosing material information. This could mean you paid too little for your cover, or you were accepted for a sum assured the insurer would not have offered you had they known all the material information. Non-disclosure is a breach of insurance terms and conditions and means your insurer can decline to pay your claim. There will also be a delay as underwriters need to assess the claim and information provided at application to determine how the non-disclosure would have affected cover and premium amounts.

When a claim is declined your beneficiary or beneficiaries receive nothing, R0!

In 2023, South African insurers declined 4.1% of claims, in most cases due to material non-disclosure, leaving over 38 000 beneficiaries without the funds they needed when a loved one passed away.

In practice, not all claims will be declined, some may be reduced.

When a claim is reduced your beneficiaries receive a lower sum assured, such as R500 000 instead of R700 000.

Reduced claims in practice

If an insurance company finds there was non-disclosure, they will carefully reassess your application. For example, your insurer finds out you have a health condition that you knew about when applying for cover, but that you didn’t mention on your application. If you had disclosed this information, you would have paid a higher premium for your cover.

For illustration purposes, let’s say you applied for R700 000 cover and were granted this cover at a premium of R400 a month, based on the information you shared at the time. However, when your insurance company discovers the non-disclosure at claims stage, they calculate that had you declared the health condition you would only have qualified for R500 000 cover for a R400 monthly premium. As such, they adjust the policy to reflect what you paid in premiums and pay-out R500 000 as this is the amount of cover you have been paying for.

What non-disclosure, declined and reduced claims mean for your family

A declined claim can be financially devastating for your family as it leaves them without the financial resources they need. This could mean they have to downgrade their lifestyle and struggle to pay living expenses and education costs.

A reduced claim pay-out can be equally devastating, as your loved ones will have to review budgets and cut expenses, they would otherwise have been able to pay.

Disclose to make sure your loved ones benefit from your policy

You want your loved ones to have access to funds so that they can pay costs such as housing and education. Your life cover policy can do this, as long as you disclose all material information. It is vitally important that you answer questions honestly and fully on a life insurance application when you apply for cover or any increase in cover, giving all the information requested. Leave nothing out, include everything - even if you suspect you have a health problem.

Your honesty will be worth it, because it means your insurance company can underwrite you and offer you cover at the right premium! And when the time comes to claim, valid claims can be paid quickly and in full.

How to ensure you always disclose material information

Take some time when you answer questions and share as much information as possible. If in doubt, such as you are not sure the information is relevant or not, share it!

• Read or listen carefully to the questions on application forms and ask your insurer if you don’t understand any terms, including insurance and medical terms
• Always disclose any medication you are taking or have been taking for more than a period of two consecutive weeks
• Find out the medical history of your close family, mother, father, sisters and brothers
• If you cannot answer a question honestly you need to say so and find the information you need to answer in full and accurately. Don't assume, and don't forget to find the information you need, until you do your cover won't be in place!

Leave loved ones a lasting financial legacy

Disclosure will have a positive impact on your family and can be the difference between loved ones living debt free or being over indebted. Your policy is designed to change the lives of those you love, and if you stick to the policy terms and conditions and disclose all material information it will!

*Figures are for illustrative purposes only