Assured of nonpayment

Insurers won’t miss an opportunity to collect premiums, but will find every excuse for not honouring their end of the deal

It’s every consumer’s nightmare. You diligently pay insurance premiums every month, for years even, hoping you’ll be covered for some dreaded disease or that horrible accident that may never happen, but which you certainly don’t want to happen. Miss one payment and you have the insurance house calling you about how much you risk your cover.

Then comes the dreaded disease! And the insurer finds every possible reason why it should not honour its part of the bargain. Mrs RH (who asks that her name not be used) has found out the hard way that being insured does not always assure the consumer of cover when they need it the most.

After paying PPS Insurance monthly premiums starting at R2,200 since May 2012, Mrs RH was told in December last year by her former employer, Sasol, that her employment would be terminated because of her medical disability.

This decision came after months of tests and treatment by her own doctors and those acting on behalf of the company, who all found that she would need to be declared permanently incapacitated.

She was diagnosed in March 2014 with encephalitis and spent some time in hospital.

“I was put on temporary disability by my employer, and received temporary disability benefits from PPS.”

Then came the decision that she was medically unfit to work.

The department of labour also agreed that Mrs RH met the conditions for permanent disability.

All this should not have been of too much financial concern to the chemical engineer, as she had insurance cover in place with PPS, which claims to specialise in providing insurance cover to professionals.

Mrs RH’s policy covered her to continue receiving her salary equivalent should she be unable to work in her specified profession, either temporarily or permanently. In the policy she had also made provision for the payment of a lump sum should she be disabled, “to ensure that should I have any debt or medical expenses I am able to fulfil my financial obligations,” she says.

After paying out the temporary disability benefits, PPS said it would prepare to service its permanent incapacity obligation a few months before the temporary benefits expired.

But instead of paying out the claim, PPS appointed its own specialists and Mrs RH had some difficulty receiving the monthly payments from PPS. The insurer was apparently trying to wiggle out of its obligation — for which it had been collecting no less than R3,360 in premiums.

It went out of its way to prove that Mrs RH was “not disabled”. It sent her to occupational therapists, who also concluded she was not fit to work as a chemical engineer.

This was all after Sasol and the Unemployment Insurance Fund had put her on — and paid her out for — permanent disability. When PPS did not get its way with the occupational therapists, it referred the matter to its own medical officer committee, which, unsurprisingly, contradicted all the other specialists (including its own).

Declining to pay out the due claim, PPS used advice from this committee that found that Mrs RH was able to perform household chores unaided. She therefore could find another job, it concluded, declining to pay.

When I asked PPS on what grounds it had declined the claim, it took the company two weeks to fob me off with the standard “client confidentiality” disclaimer.

PPS did, however, say this much: “Our claims philosophy at PPS is to pay all valid claims. PPS would not unfairly disqualify any condition or application without valid reason.”

It provided no valid reason for declining Mrs RH’s seemingly valid claim, other than that she could still work “elsewhere”. PPS advised her to appeal, first through its internal processes, before approaching the ombudsman.