Tan Kin Lian's Blog: Rejection of claim on grounds of non-disclosure

Thursday, July 17, 2008

Rejection of claim on grounds of non-disclosure

A policyholder switched from Medishield to a private Shield plan. He was not asked about his cholesterol level. He did not declare this condition as the doctor did not advice on the need to take medication.

He had to carry an angioplasty operation. The insurance company rejected the claim on the ground of non-disclosure. They even refused to pay the claim that would have been allowed under Medishield.

The policyholder wrote to the insurance company to ask for the grounds of rejection. There was no reply for one month. He intends to lodge a complaint with Fidrec.

Lesson: There is no point to pay a higher premium under a private Shield plan, if you are not sure about the practice of the insurance company in rejecting a claim on the grounds of unintended non-disclosure.

12 comments:

Crazy Aries said...: let assume, if i own an insurance company, if someone never declared his/her pre-existing illness, on purpose or not, take up a better medical insurance plan from me.

Within a year, made a claim due to pre-existing illness, isn't it unfair to me if i admit his/her claim.

However, if the claim for the pre-existing happen, maybe 5 years or more later, i might accept the claim (at least 50%).

just my personal opinion.; July 17, 2008 2:50 PM
siewkhim said...: Dear Kin Lian,

I don't quite understand you. You mean to say that the insurer cannot reject a claim on ground of non-disclosure?

About 15 years ago my brother who took a life policy from Income (your were the CEO then) failed to disclosure an medical impairment in his proposal form. His death claim was rejected by Income.

Please explain?; July 17, 2008 4:03 PM
Tan Kin Lian said...: The insurance company must be reasonable in rejecting a claim on the grounds of non-disclosure.

The policyholder must be aware that the medical condition is material and ought to be disclosed.

If there is so much uncertainty about the cover, there is no point in paying a lot of money to be insured.; July 17, 2008 5:57 PM
Falcon said...: A friend just asked my advice today about switching to a private shield plan as one of his friends who is an agent has recommended he does that. He felt that since he cannot take out his medisave money he might as well utilise it for a more comfortable stay in hospital should the need arises.
I told him that if he does not mind staying in B2 he does not need the additional cover as his insurability under medishield is unquestionable since he has been on it for more than twenty years. Should he switch he will have the same problem like that mentioned in your posting. His claims may be challenged and there is no point in paying more to be in a more precarious position. Furthermore, cpf money is still his money and the mindset that cpf money cannot be taken out and therefore should be spent more liberally is not sound.; July 17, 2008 6:27 PM
Sgbluechip said...: Hi Mr Tan, due to the brain drain phenomenon, many good doctors including top surgeons are constantly being drawn into the private medical practice. If I were to contract a rare illness, am I right to say it will ensure me a higher survival rate if I were to seek private surgeons treatment?

I feel that the doctor-patient ratio will be more favourable and allow doctors to devote more time and attention to me.

Consider Andrea D Cruz liver transplant a few years back. Only the private practice can offer the expertise and higher rate of success.

In view of the above, is it better to insure through private shields? I am currently still on Medishield only, hence I seek your advice.

Thanks!

Lendevear; July 17, 2008 8:05 PM
zhummmeng said...: You will find churning practices by insurance agents even more rampant with NTUC joining the fray of giving higher commission to their agents. Under Mr. TanKL the commission was 15% first year for Incomeshield but NTUC is giving 35% now as first year commission. Consumers will be at the mercy of these agents who churn their shield between insurers.
Who suffers? There bound to be some consumers 'caught failing' to disclose material information.
Beware of unethical and unscrupulous insurance salesmen.; July 17, 2008 8:44 PM
C H Yak said...: I am aware of this "nasty" insurance business tactics because I had to help my sister to "fight" through a claim against an established local insurer last year. BTW, not Income. This is the other Insurer who offered private Shield plan when Medishield was farmed out to private insurers. We could guess which Insurer this is.

The claim executive sought my sister's permission to ask for medical records from the family doctor pretending to expedite the claim, but instead used certain information obtained from the doctor to challenge the claim on the ground of "non-disclosure".

At the point of sales, the Agent had asked my sister to declare any medical conditions, other than conditions and symptoms such as common cold, cough, blocked nose and flu which need not be declared.

My sister had a history of "blocked nose" prior to the conversion to private Shield plan. About 2 years after conversion, her "blocked nose" condition was diagnosed as certain other medical condition. She had a operation and made a claim.

The Insurer then asked her to fill up a claim form which has various technical medical terms. Subsequently, the Insurer used the records the claim executive obtained from the family doctor to prove "non-disclosure" on my sister's part to reject the claim.

I had to advise her to file a police report, and cc the complaint letter to CPF, MAS, etc. We also had to threaten a complaint to the S'pore Medical Council.

So beware when converting to private Shield! Because if one is not good at writing letters, a lawyer has to be engaged and that is costly. It was a blessing that my sister's claim was finally allowed but after much hassles.

If insurance companies are run purely on profitability motive without strong corporate social responsibility, and a lack of governance by regulators, the layman consumers would certainly suffer.; July 17, 2008 10:32 PM
Khiat Han Hwee Adrian said...: Hi Zhummmeng,

How do you know that NTUC Income is giving 35% as 1st yr comm? Are you from NTUC Income? You seems to have first hand news.; July 17, 2008 10:54 PM
zhummmeng said...: Adrain, you don't need to be inside to know if you have some friends inside and outside.
You should know better as you are Ntuc agent. If it is not true then these friends were pulling a fast one on me.
Well, let me tell you, Adrain. NTUC agents are now very keen to sell Incomeshield. In the past they weren't becuase the commission was low , but now they are like buaya and even would go to churn other shields.
So , is it true?; July 17, 2008 11:29 PM
Khiat Han Hwee Adrian said...: Zhummmeng,

I'd not heard of an increase in Commission. Thats why I don't know where you get the news from.

Anyway, I hope this posting do not give others an impression that Insurance companies are there to cheat people and dispute every claims they received.

There are too many factors to be taken into consideration when someone says the insurance company don't pay claims. The claimant have a tendency to exagerate their situation to support their case. They sometimes easily push the fault to the agents. Lets be fair to the insurance companies and the agents.; July 18, 2008 12:31 PM
siewkhim said...: On ground of a non-disclosure regardless of its materiality, the insurance company has the right to reject a claim.

Any payment by an insurer after rejecting the claim is not an admission of liability but is made out as ex-gratia.; July 18, 2008 4:42 PM
darth said...: is this insurer a sponser of sports events?; July 21, 2008 12:30 AM