Here are the survey results (51 replies).
Wednesday, June 17, 2009
Life insurance - indisputable clause
A life insurance policy is likely to have an indisputability clause. This clause states that the insurance company will not dispute any claim after it has been in force for one or two years, except in the case of fraud.
The purpose of this clause is to protect the consumer (i.e. policyholder) from unreasonable rejection of a death claim due to non-disclosure of material information. After a policy has been issued for a few years, it will be difficult to establish if the non-disclosure is intended or an oversight. The indisputability clause states that the insurance company will not dispute the claim on this account.
The claim can be disputed if the premium is not paid.
Some claim offiicers are willing to dispute a claim under the "fraud" clause. They claim that policyholder is commiting fraud by the non-disclosure. This stand is in contraction to the indisputablity clause.
If the insurance company wish to use the fraud clause, they have the burden to prove that fraud was intended by the policyholder. The non-disclosure event does not amount to fraud. Other evidence had to be produced, e.g. that the policyholder knew about the duty to disclose and take steps to hide the facts. This type of evidence is usually not available, probably because fraud was not intended in the first place.
I hope that insurance companies are aware about the intent of the indisputability clause to protect the consumers from unreasonable rejection of claim on weak grounds. If such a case is challenged in court, it is likely that the insurance company is not able to prove the intent to commit a fraud, and that the claim will be paid.
Tan Kin Lian
The purpose of this clause is to protect the consumer (i.e. policyholder) from unreasonable rejection of a death claim due to non-disclosure of material information. After a policy has been issued for a few years, it will be difficult to establish if the non-disclosure is intended or an oversight. The indisputability clause states that the insurance company will not dispute the claim on this account.
The claim can be disputed if the premium is not paid.
Some claim offiicers are willing to dispute a claim under the "fraud" clause. They claim that policyholder is commiting fraud by the non-disclosure. This stand is in contraction to the indisputablity clause.
If the insurance company wish to use the fraud clause, they have the burden to prove that fraud was intended by the policyholder. The non-disclosure event does not amount to fraud. Other evidence had to be produced, e.g. that the policyholder knew about the duty to disclose and take steps to hide the facts. This type of evidence is usually not available, probably because fraud was not intended in the first place.
I hope that insurance companies are aware about the intent of the indisputability clause to protect the consumers from unreasonable rejection of claim on weak grounds. If such a case is challenged in court, it is likely that the insurance company is not able to prove the intent to commit a fraud, and that the claim will be paid.
Tan Kin Lian
Tuesday, June 16, 2009
FISCA Service
FISCA (Financial Services Consumer Association) has been registered. I will propose that FISCA create a website to allow customers to post their personal experience on the following:
1) Bad service
2) Good service
The customer has to be identified to FISCA and should have documentary evidence to back up their statement They should be prepared to face the business entity. FISCA will give the business entity the right of reply.
With this service, I hope that businesses will be encouraged to provide good service and look after their customers.
1) Bad service
2) Good service
The customer has to be identified to FISCA and should have documentary evidence to back up their statement They should be prepared to face the business entity. FISCA will give the business entity the right of reply.
With this service, I hope that businesses will be encouraged to provide good service and look after their customers.
Monday, June 15, 2009
Treat customers fairly
In the past, businesses were worried about their reputation. If they received a bad report in the newspapers about how badly they treated their customers, they would have taken immediate steps to rectify the bad image.
In recent times, businesses are not concerned about their reputation, for the following reasons:
a) Bad treatment of customers is quite common among their competitors as well
b) If some customers go away, they can use marketing to reach out to new customers (who may not be aware about their reputation)
c) The newspapers are less active in highlighting bad service, as they depend on the advertising revenue of these businesses.
What can consumers do? They should judge a business according to its record of treating customers well. If the business is too focused on making more profit, then they are likely to neglect their customers.
Tan Kin Lian
Fail to declare hypertension
Dear Mr. Tan,
REPLY
If you had declared hypertension, the insurance company would have loaded up the premium due to this medical condition.
As you have been paying a lower premium, compared to the loaded premium, a fair approach is for the insurance company to pay the claim on a pro-rata basis, i.e. based on the premium that you have paid compared to what you would should have paid, if the condition had been declared.
This approach of paying pro-rata has been applied in many situations, e.g. if a property had been underinsured, and can be applied here. It is fair to the insurance company and to the consumer.
I bought a medical insurance but forget to declare that I have hypertension. I went for a kidney operation and the insurance company wanted to reject the claim due to non-disclosure, although the kidney condition is not related to hypertension. Is this fair?
REPLY
If you had declared hypertension, the insurance company would have loaded up the premium due to this medical condition.
As you have been paying a lower premium, compared to the loaded premium, a fair approach is for the insurance company to pay the claim on a pro-rata basis, i.e. based on the premium that you have paid compared to what you would should have paid, if the condition had been declared.
This approach of paying pro-rata has been applied in many situations, e.g. if a property had been underinsured, and can be applied here. It is fair to the insurance company and to the consumer.
Reading Test
Only great minds can read this.
fi yuo cna raed tihs, yuo hvae a sgtrane mnid
Cna yuo raed tihs? Olny 55 plepoe out of 100 can.
i cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg.The phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno't mtaetr in waht oerdr the ltteres in a wrod are,the olny iproamtnt tihng is taht the frsit and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it whotuit a pboerlm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef,but the wrod as a wlohe. Azanmig huh? yaeh and I awlyas tghuot slpeling was ipmorantt!
fi yuo cna raed tihs, yuo hvae a sgtrane mnid
Cna yuo raed tihs? Olny 55 plepoe out of 100 can.
i cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg.The phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno't mtaetr in waht oerdr the ltteres in a wrod are,the olny iproamtnt tihng is taht the frsit and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it whotuit a pboerlm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef,but the wrod as a wlohe. Azanmig huh? yaeh and I awlyas tghuot slpeling was ipmorantt!
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