NATIONAL NEWS - The ombudsman for long-term insurance, Judge Ron McLaren has cautioned policyholders about non-payment of premiums.
“Ensure that your premium payments are up to date. If your circumstances have changed, you should check that the debit order or stop order is operating correctly to ensure that your policy stays in force.”
The ombudsman also warned about Covid-19 scams. “To help protect yourself, you should reject offers that come out of the blue, beware of adverts on social media channels, avoid being rushed or pressured into making a decision and do not give out details relating to bank accounts and insurance, pensions and investments,” McLaren said. He urged people to read through their policies and to go through the annual statements to make sure they know exactly for what they are covered.
“Check that the beneficiary nominations are still relevant and advise your insurer should you wish to change a beneficiary. If you have become unemployed, inform your insurer as it may affect your benefits.”
If people were worried about what happens if they cannot pay their premiums during this time, the ombudsman said the problem must be discussed with the insurer. On whether the life or funeral policy will payout as a result of death caused by the coronavirus, McLaren said this will depend on the policy provisions.
Regarding the question of a credit life policy paying in the event of loss of employment as a result of the impact of the virus and the lockdown, he said this will depend on the policy provisions and the particulars of the claim. “There is no single answer to this question. The loss of employment would have to fit into the terms and conditions of the policy.
“It is more common to have retrenchment cover but there are some policies that provide for loss of income. Some insurers may choose to provide benefits outside of the strict provisions of the policy. The claimant should read his/her policy and also contact the insurer to find out what the policy covers.”
The ombudsman said if one is so ill as a result of the virus that one is unable to work, he or she will have to complete a waiting period (if applicable) in terms of the policy before qualifying for a disability benefit unless the insurer chooses to waive the waiting period.
“Insurers will have to be agile to adjust to these circumstances, keeping in mind the expectations contained in the communication by the Financial Services Conduct Authority (FSCA).”
The FSCA recently urged regulated entities (such as insurers) to bear in mind the current circumstances and assist their customers with even more empathy, flexibility and understanding during these difficult times.
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