Momentum does claim about-turn

PRESSURE: MANY PEOPLE VOWED TO MOVE POLICIES

This will apply to all existing, as well as future, life cover clients.

Despite previously sticking to its guns over a rejected life insurance payout for a client who had not disclosed a pre-existing medical condition, although it was not related to his violent death, Momentum appears to have been pressured into paying out the R2.4 million to Nathan Ganas’ widow, Denise.

The company made the announcement yesterday, adding it would do the same in the case of other clients whose claims had been declined after falling victim to violent crime. Its initial refusal to pay the claim had a major impact on the public’s perception of the company, with many vowing to move their policies.

Momentum said yesterday: “It is clear from market reaction over the past two days that under certain circumstances current industry practice creates the impression insurers are looking for reasons not to pay a claim. Momentum is in the business of paying claims and we have, therefore, taken the criticism to heart.

“We have created a solution that will pay an amount equal to the death benefit (limited to a maximum of R3 million) in the case of violent crime, regardless of previous medical history. This will apply to all existing as well as future life cover clients.”

The payout would be fully funded from profits and not by clients’ premiums. The company said claims would be paid out in the event of violent deaths “even when material medical nondisclosure impacts the legitimacy of the contract. The payout is not in addition to the normal death benefit. It only applies in circumstances when the death benefit will not be payable or has been reduced”.

The company also extended this cover to all clients in future and retrospectively. “We are identifying those impacted in this way and we will contact their families to arrange payment. This includes Mrs Ganas.”

The company re-emphasised the importance of full disclosure. “The only time your health status matters is when you apply for cover. This is when you need to share all your medical and health information. If your health deteriorates after commencement of the policy, there is no need for you to inform Momentum. Your claim will be completely valid if the information provided at the start of the policy was accurate. With the exception of the new guarantee, full disclosure remains nonnegotiable.”

Momentum had previously declined the claim for the Durban resident killed in a hail of bullets trying to protect his wife during a hijacking last March. Ganas’ claim was declined on the basis he had not disclosed that he had been diagnosed with raised blood sugar levels, which may have occurred before his application for the policy in 2014. The company had insisted that paying it would result in an increase in claims, which would ultimately increase premiums for all clients just because “a client has not acted in good faith”.

“The rejection of the claim was referred to the Ombudsman for Long-Term Insurance, who determined that Momentum’s decision was correct. In this instance, had the information been known to us, no cover would have been issued in the first place, and no claim would have been paid, regardless of the cause of death,” Momentum said at the time. –

We have, therefore, taken the criticism to heart.