Ever wondered what are some of the things an insurer cannot deny a claim for? While insurers have a list of exclusions in place for things that they will not cover to protect themselves and policyholders, there are things they cannot deny a claim for.
The TCF Act ensures that insurers do not behave unlawfully towards clients when it comes to placing a claim on a policy. Here are a few surprising things you need to know.
Not sticking to the agreement of a policy
Making sure that a policyholder understands what they are purchasing when it comes to life insurance is part of the TCF Act. The TCF Act also states that a product or service should perform as promised and should not be misleading in any way. Therefore, when it comes to the claim stage, insurers must deliver on their promise to make the payout if everything checks out.
Refusing to payout because of a medical condition
This has caused confusion and outcries from beneficiaries who say insurers won't pay because a policyholder has died due to a medical condition. During the underwriting process, it is vital to disclose all medical or lifestyle habits that can put your life or health at risk.
Should you be diagnosed with a medical condition after taking out a policy, it is crucial to inform your insurer. Being dishonest with your insurer by leaving out vital information about your health, or lying so that you can get cover at an affordable premium can lead you to be guilty of non-disclosure. This can cause the claim to be denied. However, if the policyholder along with their doctor were unaware of a medical condition and dies from it an insurer still has to honour the claim.
Denying paying out for a terminal illness
Given that you were honest during the underwriting process and it is discovered that you have a terminal illness after taking out a policy, your insurer has to honour the claim. A terminal illness is a life-changing disease that leaves a person with less than a year to live. A doctor will have to medically diagnose you to place a claim on a policy that covers you for terminal illness. You will have the option of having 50% - 100% of the claim paid out while you are still living to cover your expenses and take care of your loved ones. An insurer cannot deny a claim for terminal illness if this has been listed as a benefit in the policy.