When in­sur­ers won’t pay up

Kapi-Mana News - - OUT & ABOUT - ROB STOCK MONEY MAT­TERS rob.stock@fair­fax­me­dia.co.nz

In­sur­ance is sup­posed to be there when you most need it.

It should pay off the mort­gage should you die, cover the bills if you fall crit­i­cally ill, or pay for daily nurs­ing should you be­come per­ma­nently dis­abled.

And yet, each pol­icy is filled with ‘‘ex­clu­sions’’ and ‘‘re­stric­tions’’ on when claims will, and will not be paid.

Don’t get me wrong. I love in­sur­ance. My dad, who took his in­sur­ance se­ri­ously, died young, so I know the value to a fam­ily.

But you have to ap­proach in­sur­ers with your eyes wide open, and that means read­ing the poli­cies you buy to en­sure you know what you are cov­ered for, and the times when in­sur­ers will de­cline your claim.

Read­ing your poli­cies is the only cure for the mag­i­cal think­ing that many peo­ple bring to in­sur­ance, which pretty much amounts to this: If some­thing bad hap­pens, the in­surer will pay.

Well, this top 10 should re­veal that that is not al­ways true.

GOLDEN RULES

Know, don’t guess Read your poli­cies Send in your med­i­cal notes

The in­surer wants to know ev­ery­thing about the risk it is taking on, of­ten in­clud­ing the minute de­tails of your health history. Best to at­tach a full copy of your med­i­cal notes to any life/trauma/dis­abil­ity/ health/crit­i­cal ill­ness pol­icy ap­pli­ca­tion, to pre­vent your in­surer tear­ing up your pol­icy for ‘‘non-dis­clo­sure’’ at claims time.

1. Your er­rors: 2. You die, or are hurt, while com­mit­ting a crime:

You do not al­ways need to have been charged for an in­surer to con­sider you were com­mit­ting a crime. Some­times, your crime has to be ‘‘ma­te­ri­ally’’ il­le­gal. Keep those speed and blood-al­co­hol lev­els down while driv­ing.

Some poli­cies, such as travel in­sur­ance, re­quire a level of com­mon sense. Reck­less be­hav­iour, like a self­guided trip around a Manila slum, may not be viewed very favourably at claims time.

3. You were reck­less: 4. Get­ting caught in a riot:

In­sur­ers pre­fer you not to do things with a high chance of death or in­jury. Ri­ot­ing is one, as is head­ing off to war, or get­ting blown up by a ter­ror­ist. And yet, some of the word­ing on some life in­sur­ance poli­cies is very broad. Just be­ing caught in a riot, with­out be­ing an in­sti­ga­tor, can be enough.

‘‘In­sur­ers pre­fer you not to do things with a high chance of death or in­jury.’’

Should you die, or be hurt us­ing them, your

5. Il­le­gal drugs:

fam­ily may find they strug­gle to get your in­surer to pay up.

Should you be­come per­ma­nently dis­abled af­ter fall­ing from a tree you were climb­ing drunk at a stag party, your dis­abil­ity in­sur­ance may not pay up.

6. Be­ing drunk: 7. HIV or sex­u­ally trans­mit­ted dis­eases:

Some­times this is a blan­ket ex­clu­sion, which feels like a han­gover from the Aids panic of the 1980s and 1990s.

If you are made re­dun­dant in the first three months af­ter taking out

8. Re­dun­dancy:

re­dun­dancy cover, there will be no pay­out. It can be hard to spot such ex­clu­sions.

Los­ing an eye may sound like a per­ma­nent dis­abil­ity, but you have to lose both to be cov­ered by some dis­abil­ity poli­cies.

9. Not hurt enough:

Your heart at­tack may turn out not to be se­ri­ous enough to trig­ger a trauma in­sur­ance claim, or your can­cer not nasty enough.

Read your pol­icy. Seek to un­der­stand it. And never, never, take an ini­tial ‘‘no’’ at claims time as fi­nal.

10. Not ill enough:

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