Weekend Argus (Saturday Edition) - - PERSONALFINANCE -

Life com­pa­nies paid out 99 per­cent of all claims made last year against fully un­der­writ­ten life poli­cies on death, to a value of R6.8 bil­lion, ac­cord­ing to the As­so­ci­a­tion for Sav­ings & In­vest­ment SA (Asisa).

In 2012, life as­sur­ers hon­oured 34 724 death ben­e­fit claims on fully un­der­writ­ten life poli­cies and de­clined 352 (one per­cent). The 352 re­pu­di­ated claims amounted to R213.8 mil­lion, about three per­cent of the to­tal value.

Mo­men­tum, which is be­low the aver­age, re­pu­di­ated one per­cent of claims (14, with a value of R9.9 mil­lion).

Peter Dempsey, Asisa’s deputy chief ex­ec­u­tive, says the statis­tics are limited to fully un­der­writ­ten life poli­cies be­cause th­ese poli­cies are de­signed to pay claims as long as the pol­i­cy­holder has met the terms and con­di­tions of the pol­icy. This type of life cover is only is­sued if the pol­i­cy­holder has com­pleted the full un­der­writ­ing process, which may in­volve a com­pre­hen­sive as­sess­ment of the as­sured’s med­i­cal his­tory.

Ex­cluded from the data are fu­neral cover and credit life poli­cies, which are con­sid­ered par­tially un­der­writ­ten life poli­cies.

Dempsey says that with the ex­cluded poli­cies, very limited or no un­der­writ­ing is re­quired on ap­pli­ca­tion, and they usu­ally re­quire ap­pli­cants only to an­swer a few health-re­lated ques­tions. The re­sponses are taken at face value and ap­pli­cants are not re­quired to un­dergo med­i­cal ex­am­i­na­tions or blood tests.

He says the 352 claims against fully un­der­writ­ten life poli­cies were de­clined for the fol­low­ing rea­sons: non-dis­clo­sure (70.3 per­cent), sui­cide (20.11 per­cent), un­der­writ­ing ex­clu­sions, such as se­ri­ous pre-ex­ist­ing health con­di­tions (6.13 per­cent) and fraud (3.42 per­cent).

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