LIFE ASSURANCE DEATH CLAIMS: NUMBERS FOR 2012

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).