Tan Kin Lian's Blog: Non-disclosure and medical insurance

Monday, July 21, 2008

Non-disclosure and medical insurance

Someone asked me to explain about the impact of non-disclosure of pre-existing condition on medical insurance.

Under the contract, the insurance company has the right to reject a claim due to the non-disclosure of a pre-existing condition. They are likey to reject the claim, even if the non-disclosure was unintended, namely the policyholder was not aware about it.

What is pre-existing is also a matter of judgement. Most medical conditions can be traced to be pre-existing. For example, if the patient has a high cholesterol and does not disclose it, the insurance company may reject a claim that is related to this condition.

As a person grows older, most illnesses are likely to have some pre-existing connection. It is quite unfair for the insurance company to reject a claim on flimsy grounds. From my experience, many insurance companies in Singapore are quick quick to find a reason to reject a claim.

Hence, it is very important that you choose an insurance company that you can trust, and take act fairly in the interest of their policyholders. Unfortunately, many insurance companies are too driven by their profits and are willing to sacrifice the trust of their policyholders.

Consumer protection in Singapore is weak. Consumers are not willing to fight for their right in a court of law, as the legal cost is high.

9 comments:

siewkhim said...: Fighting for our right in the court of law is expensive and the outcome is unpredictable except for some very special cases the outcome of winning is almost 100%.

The only proctection we have is to play by the book and to disclose everything that we ought and should have known as expected of an honest person.

The key here what "we ought and should have known".; July 21, 2008 5:40 PM
arizona carpet cleaners said...: Non-disclosure is a huge no-no. The insurance company has rights to base their underwriting decision and premium on all information.; July 21, 2008 10:16 PM
Unknown said...: Dear Mr. Tan,

Some insurance policies like shield plans provided by certain insurers cover congential diseases. The waiting period is only 2 years. What are your views on this?

Wilfred Ling
http://www.wilfredling.com; July 21, 2008 11:32 PM
siewkhim said...: Yes, it is not crucial whether non-disclosure is material or not. As long as there is a non-disclosure, the insurer has the right by law to repudiate the claim.

This has been established by precedent, statute and common law.; July 22, 2008 12:07 AM
Unknown said...: Medical insurance claims also depend on the medical reports filed by doctors. I agree with Mr Tan that as a person grows older, sicknesses linking to pre-existing condition may be more and complex as well. The insured needs to be protected against quick and unfair judgement calls.; July 22, 2008 1:49 PM
siewkhim said...: I don't quite understand how this is an issue.

The most important thing is whether the policyholder has reasonable knowledge that he has or is suspected of having medical impairments before the insurer quotes the premium and accept the risk?

If he has knowledge, just disclose lah. The policyholder has to be equally honest in the whole deal.

With age we are likely to develop medical impairments not discovered or made known to the policyholder before the policy was issued. If that is so, the issue of pre-existing conditions do not arise.

The problem arises when these impairments known to the policyholder were left undisclosed. For example if a claim for a kidney ailment was made but a pre-existing condition e.g.abnormal BP was not disclosed at the point of contracting the cover, the insurer has the right to reject the claim because abnormal BP would subsequently lead to kidney ailment.; July 22, 2008 3:51 PM
zhummmeng said...: Yes , consumer protection is zero.
The regulator bochap and let the insurance companies do what they like; let the agents do anything, cheat, lie and rob the poor unwary consumers at roadshows, in the homes everywhere. Let the companies manufacture shady, dubious complicated products that no one understands and incentivize the salesmen and women with high commission to lie and misrepresent.
Surely the regulator is aware of what is going on. Making Singapore a financial hub is not turning it into a big casino.
The empire must strike back!!!!; July 22, 2008 8:52 PM
Anonymous said...: I recently applied for medical insurance and disclosed a great deal, even small aches/pains.

Maybe I shouldnt have been surprised - I was offered the policy with exclusions on everything I declared.

But I feel some of the exclusions are unjustified or excessive e.g. I declared back pain in NS but was excluded by medical insurer for SPINE CONDITIONS.(NS doctors then couldnt find any problem with my back).

Is there any avenue/justification for me to renegotiate or perhaps take medical test at my own cost?

Or is it a " take it or leave it" scenario for me?; July 24, 2008 10:59 PM
Falcon said...: Optimus,
You have stumbled on a little known fact of insurers. Tails they win Head you lose. If a policy covers 30 illnesses and you declare ten problems. They merrily exclude you on these 10 so you are actually paying to insure for that remaining 20. But don't be too happy, once you come down with one of the illnesses, they will scrutinise what you have put down and look for more excuses to exclude you from that illness you are down with. So when you are well, they merrily collect your premiums and when you are down, they treat you like a suspect and try to throw a rock at you. Why are we paying to be treated like this? I say, just keep your money in a special account and invest it and when you are down with an illness, take out those money and spend it to cure yourself. This way, you spare yourself the agony of having to deal with a team of fit and healthy bald headed vultures circling menancing above you waiting for you to draw your last breath. You will have less one thing to worry about when the storm starts.; July 28, 2008 4:06 PM