Telling small white lies may seem insignificant in some aspects of our lives. However, a small white lie when it comes to taking out a life policy could do more damage for you and your loved ones when it is time to place a claim.
Many insurers uncovered an increase in fraud and dishonest claims to the value of R787.6 million in the previous year. While telling a lie may seem like an easy way to get access to policies and the payouts, it could cost you more than you have bargained for.
The second leg of the pandemic sees an increase in fraud
According to a report by ASISA, 2021 ended with South African life insurers detecting 4 287 fraudulent and dishonest claims worth R787.6 million across different types of policies. Leaving out information that can affect your policy. Being guilty of non-disclosure or deliberately misleading an insurer could result in a claim being denied or imprisonment for fraud.
Honesty is the best policy when it comes to taking out any policy. Being honest with your insurer can help you and your loved ones paying a hefty price of having something as important as your policy being denied when you need it the most.
Dishonest and fraudulent claims can have far reaching consequences that affect honest policy holders. For example, it could have a domino effect on other policy holders who will ultimately have to pay higher premiums to make up for these irregular claim rates.
Fake blood results, misleading information and scams
Scams and syndicates have increased in the past year. While security measures are put in place to protect clients and insurers from dealing with fraudulent activities, there have still been a few cases where syndicates use false information to get access to policies. Funeral policies are the leading policies in South Africa that experience dishonest and fraudulent claims. Dishonest and fraudulent claims for funeral policies cost South African insurers R128.2 million last year.
There were also cases of clients presenting false HIV test results by using someone else’s blood and applying for a disability cover for someone who was already disabled. There are also incidents of beneficiaries of life cover policies being involved with the death of a policy holder. Syndicates do not shy away from finding ways to get access to funds by providing false information and fraudulent activity within the insurance space, resulting in R4.6 million worth of loss in dishonest and fraudulent policies.
A silver lining for clients and insurers
Protecting what matters the most when you need it the most boils down to having the right policy in place. Despite having paid out R787.6 million in fraudulent and dishonest claims, payouts for honest policyholders were the highest paid in a single year with South African insurers paying a R608 billion in claims and benefit payments.
With honest clients trying to provide a financial safety net to provide and protect their loved ones in the form of policies, they can have peace of mind knowing that they will be protected. Updating your policy and informing your insurer about health changes that can affect your policy can prevent any nasty surprises for you and your loved one.
