Make sure you properly disclose all when taking out a life policy

show, there are grey areas.

The grey areas are a problem, because a claim can be repudiated even if you genuinely forgot something or considered it inconsequential.

The problem is far greater with disability claims than with death claims.

Life assurance companies are often accused, both unfairly and sometimes fairly, of “underwriting in arrears”. In other words, they start looking at the claims stage for reasons to repudiate a claim.

And they have a lot of resources to use, which enables them to catch you out if you did not properly disclose information upfront.

One of the assurers’ main weapons is a company called Astute, which is owned by Old Mutual, Sanlam and Liberty (next week’s column will deal with Astute in a bit more detail).

Among other things, Astute allows life companies to swop information they have on you. So, for example, it could show up, through a check at claims stage, that an alcoholic who did not drink for 22 years was rejected for a life policy 24 years previously because of alcoholism.

If this was not declared upfront, I suggest that the repudiation of a claim would be justified.

I raised the issue of the life companies doing better checks when policies are issued, rather than at the claims stage, with the Association for Savings & Investment SA, to prevent the problem, mainly for dependants, of repudiations (see “Assurers generally ‘very lenient’ at claims stage on non-disclosure”, below).

It all boils down to telling your life company as much as you can about your lifestyle and health to ensure that, if something happens to you, your dependants will receive what you planned they should receive.