Friday, September 18, 2015

Indisputability clause in an insurance policy

If your insurance company rejects a claim under a life or health insurance policy and give the reason that you (the policyholder) did not disclose a pre-existing condition, you should look at "indisputability clause" in the policy document.

This clause usually states that the insurance company will not dispute a claim after, say, 1 or 2 years, except in the case of fraud.

If you were not aware of a pre-existing condition or did not know that it need to be declared, the the insurance company is not allowed to reject the claim. If the insurance company wishes to reject it due to fraud, it has the onus to prove that the policyholder intends to defraud the insurance company. It is difficult for them to prove that there was intent to defraud.

1 comment:

Anonymous said...

No trouble when buying any insurance because insurance agents' aim is to close the case at all cost, ie even throwing ethics out of the window with the blessing of the company. The trouble comes when there is a claim. This is when the insurance company will do all due deligence and leaving no stone unturned to AVOID PAYING THE CLAIM.
A claim means the life fund return is affected and reduced by that amount and the policyholders' bonus is affected.
Policyholders' interest is inverse to the insurers'. Insurance is a bet by insurance company that the policyholders will NOT make a claim and the reverse is true. However, insurance companies have better odds.
Consumers should know the the insurers are NOT charities ; they are out to make as much money from you. So , becareful, select or engage an adviser and not salesman and make sure that there is no loophole for the insurers to deny your claim.

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