It pays to be honest with your life insurer

It pays to be honest with your life insurer, as demonstrated with the death claims being paid out to the families of people who died last year. Less than 10% of claims were rejected because the person who applied for the policy did not disclose all the information required.

When you apply for life insurance, you have to answer numerous questions about your health as well as the health of close family members to enable the insurer to calculate the risk of insuring your life.

Consumers usually give all the information and claims get paid when they die or become unable to work and earn a living. It cannot be stressed enough how important it is to be honest when you apply for life insurance and disclose everything you are asked about. And never, ever let the broker fill in a blank form for you.

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The Long-term Insurance Act

The Long-term Insurance Act that was promulgated to protect consumers when they take out life insurance, states that insurers have the right to cancel your policy if you did not disclose important information about your health when you applied.

Claims are usually rejected due to false claims, suicide within two years of taking out the policy, death due to an excluded condition and in the majority of cases, important information not disclosed to the insurer.

Consumers usually think they will pay lower premiums or receive cover without exclusions if they do not disclose all information about their health, but this usually comes to light when the person dies and family is left without an income.

You are required by law to disclose all important information when you apply for life cover. According to Section 59 of the act, important information is information that a reasonable, careful person will view as information that the insurer should know about in order to decide on his own on determining the risk.

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Honesty pays in life insurance

It is therefore very important to answer all questions about your health, such as operations, visits to medical specialist, abnormal results for scans and blood tests, hospital stays, medication you currently use and current habits such as smoking.

You are not required to remember all the detail, but it is important to give information about medical diagnosis, the year it happened, the name of the doctor who treated you and a summary of what happened. If the insurer then wants more information, he can contact the doctor.

Also remember to disclose information about your hobbies, such as parachute jumping or deep-sea diving. Remember, when you sign the application, you accept responsibility that everything in it is correct.

If you therefore not live up to your responsibility, the insurer can reject your claim due to non-disclosure.