Things not to do when taking out Life or Disability Cover

Life Cover don'ts in South Africa

The purpose of taking long term insurance is to ensure peace of mind in the event of trauma or death. the last thing you want is for payment to be delayed or worse yet the claim denied completely.
Making sure that your claim is paid requires a little more than just making sure that your premiums are up to date.

For your cover to remain valid you need to comply with the requirements of the policy as this is a huge reason for claims not being paid but luckily this is not hard.

1. Not disclosing all relevant information on your policy

Intentionally withholding or giving false information to your insurer is a violation of your policy rules and can result in all claims being rejected.
The policy holder should clearly disclose all previous medical conditions and any other details whether they feel its relevant or not and many people have not been paid due to wanting to hide information in order to get a lower premium.
Its much better to disclose everything and get paid when the event occurs than to pay a lower premium and get nothing.

2. Taking out less Life or Disability Cover than you need

Financial peace of mind regarding your family when you die is the goal in terms of life cover and being able to maintain your lifestyle in the case of disability is the goal of disability cover- dont forget this 
A budget is required to see exactly what your needs and the needs of your family is as well as expenses when deciding on the level of coverage needed. Your cover requirements need to be revised as your circumstances change and at the very least should take the effects of inflation into account.

3. Not letting your Advisor know you changed jobs

A change in job activities can effect how much your Life Cover or Disability Cover costs (this is risk remember) and if your job becomes more dangerous you may need to pay more and the need for these types of cover increases too. The good news is that if you move from a manual or dangerous job to a more administrative position you can attract lower premiums.

4. Keeping your cover a secret

Not telling those you love where they can find your documentation if an insured event happens can be disastrous as there is a possibility they may never claim when the need for such cover arises. It is therefore advised that you should let your loved ones know where your documents are and who should be called if an insured event occurs

5. Not Claiming in time

Nearly all claims have a specified time during which an application for a claim benefit must be made. This is one of the most common reasons that claims are not paid. Claimants often forfeit benefits if they delay starting the claims process or delay in providing the needed documents. This can be closely related to the keeping your cover a secret heading above

6. Neglecting to Update your Beneficiary list

Your Insurance Company will always pay as per the nominated beneficiaries on your policies.
You should take care to change beneficiaries as required as per divorce; new family members etc.

7. Withholding information at claim stage

Ensuring that the insurer is given full accurate information and documentation will speed up your claims process significantly. Conflicts in the information will slow this process to seemingly a crawl with identifying information like ID numbers this is especially important.

8. New risk Non Disclosure

Starting a new hobby or activity that is dangerous or just starting to smoke can raise your premium. Not disclosing these can lower your payout or maybe they may not even pay at all.

9. Ignoring the exclusions

The circumstances under which a policy will not pay is very important. Standard exclusions on most policies will include illegal substance use and breaking the law

10. Allowing the insurer not to pay

If for any reason you feel that the insurer is being unfair by not paying take it up with them. Most insurers want to pay your claim- its good business. If you feel that you have a valid claim and the insurer does not honor it take the case to the ombudsman. That being said the responsibility for understanding the conditions of your policy lies with you so read  your documentation and let your advisor explain anything you don't understand.