Important to keep up with insurance premiums

You can’t afford not to pay your insurance premiums. You really can’t, please trust me on this.

If you miss two consecutive payments and disaster strikes just days later, your insurer will reject your claim, saying that your policy was suspended due to non-payment.

Sadly, it has to be that way. If we knew that stop paying our premiums and then quickly pay the arrears should we crash our car or get a chronic disease diagnosis, we wouldn ’ t have much incentive to keep paying faithfully every month, and the insurers we’ funds could would start to wobble and collapse.

So I knew I had little hope of changing the outcome of M’s husband’s insurance claim rejection, but I thought I’d appeal to Discovery Life on compassionate grounds, anyway.

M and her husband, parents to a four-year-old, had planned for loss of income, death and disability diligently, paying their premiums for many years.

Then came 2020. With the husband a partner in a restaurant business and M in travel, their income was obliterated. The restaurants were forced to close, and M was retrenched in July.

Then, on March 5 this year, her husband was diagnosed with stage 5 (end stage) renal failure.

He’s now undergoing dialysis three days a week.

It wasn t just the fact that her

’’ husband s claim was rejected due to two missed payments that upset them, she said, it was that it was done by means of a generic letter, and the insurer got the date of her husband’s diagnosis wrong, too, by four days.

This policy was taken out in July 2006, with a dreaded disease value of R841,000.

“So after more than 14 years of having this cover in place, two payments are missed ... and then, boom! Sorry for you — take your problems somewhere else.”

Her husband’s dire diagnosis came just five days after his policy lapsed.

M paid the two months’ missing premiums four days later — about R1,600 — but it was too late.

As I said, I took up the case on compassionate grounds, not at all hopeful of a changed outcome as a result.

I was right.

In his response, Discovery Life CEO Riaan van Reenen began by saying the company paid out 99% of all claims.

In this case, he said, M approached the couple ’ s financial adviser asking for assistance with the husband’s policy, Discovery having initiated “market-leading premium relief measures”.

The adviser send the relevant documents for signing on November 23, copied to both spouses.

The adviser’s office then sent five follow-up requests via email until December 4, without any response, so the offer was not taken up, Van Reenen said.

When the January 2021 premium was unpaid, the husband was sent a letter noting this and warning that benefits could be suspended if payment was not made during the 30-day grace period; that is by the end of February.

Similar letters were sent on February 2, 12 and 19.

And when the February premium was not paid, the policy was suspended at the end of that month.

“The client again received communication on 3 March 2021, this time advising that the policy was suspended and that there was no more cover at that point,” Van Reenen said.

Two days later that dire diagnosis was made.

“Insurance cover operates on the basis that premiums are paid before an insured knows if they will suffer a covered event.

“In this way, premiums received in advance for the group of policyholders are pooled together, the combined amount being available to the insurer to settle claims in the period.

“This is the principle of insurance. There cannot be cover when premiums are paid after insured events occur — if this were allowed, only the policies on which claims happen would contribute premiums, and not from policies on which there were no claims.

“An insurer would never collect the many premiums needed to settle a single claim.”

In the interest of fairness and consistent treatment of all their clients, Van Reenen said, “we cannot make exceptions to the rules agreed with clients in their policy contract”.

“This by no means negates our empathy for this valued client.”

M’s husband’s cover had been reinstated without the imposition of any exclusions or loadings, he said.

“He is covered for new lifechanging events that occur in the future, as long as the policy premiums are kept up to date.”

With a heavy heart I e-mailed M to give her the bad, but not unexpected, news.

An hour later, I got a call from Van Reenen.

He said it had occurred to him that M’s husband’s diagnosis may have happened five days after the grace period lapsed, but given that it was already end-stage renal failure, he must have already been in renal failure at least during the grace period, if not before.

“The date of onset is very relevant.

“So I pushed the case back to the medical team, which will investigate further, starting with getting more information from our client.

“I am hopeful of a different outcome,” he said.

Suffice it to say M was in tears when I phoned her.

To be continued.

In the meantime, please check that your policies are up to date!