Dear Mr Tan,
My family members have been insured under X Shield for several years. Last year, we decided to upgrade the plan and add rider to enhance our coverage. All documents were submitted on the same day. Later we received policy contract, we were told that our daughter's plan will only commence in 1 Feb 08.
On 30 Dec 07, my daughter was admitted to hospital for investigation. After several tests, we were told that medical attention need to be administered immediately. In early Jan 08, we submitted a claim on X.
To our greatest surprise, X had just refunded our daughter's rider premium and resend us a new policy contract putting her coverage back to the initial coverage saying the upgrade and rider has been decline due to "pre-existing condition". Can X approve upgrade and then later decline it, is it fair for policyholder in our case?
REPLY
If X has approved the upgrade previously, a contract has existed. It does not matter that the upgrade will commence later. To my knowledge (and I am not a legal expert), it is not correct for X to cancel the upgrade and refund the premium.
I think that X can cancel the policy if there is a pre-existing condition that is material to the upgrade, but it must be known previously to the insured. I am not sure about their grounds on this matter.
You can raise this matter with X. If they do not give you a satisfactory explanation, you can file a complaint with FiDREC,
http://www.fidrec.com.sg/website/faq.html
did you or your daughter know or ought to have known of this condition for which she was admitted ?
ReplyDeleteFrom what I see, the upgraded plan and rider both start on 1st Feb.
ReplyDeleteIf she was hospitalised on 30th Dec, she should be just covered for the old Shield plan.
As policy only commence on 1st Feb, the insurance company have the rights to reject the policy prior to health condition that occurs before the commencement date.
It was unfortunate that this happen, but we have to be fair to the insurance company as well.
In my view, the date of acceptance of the upgrade is more relevant than the commencement date. The contract has already existed at the date of acceptance.
ReplyDeleteTake this example. If I contract to buy a house under construction, the contract existed before the house is completed. I cannot get out of the contract, if something happens to the house before it is handed over to me.
The Purchaser of the house has certain protection under Law Soc Conditions of Sale. It is not quite correct to say you cannot get out of the contract since there will be standard escape clauses.
ReplyDeleteAlso, the Purchaser is entitled to take up fire and other insurance to safeguard his interest