Sunday, September 27, 2015

What's Wrong #5 - Upgrading of Shield plan


An elderly lady had incurred a hospital bill for $300,000 but the insurance company refused to pay the claim.

The elderly lady was insured by the insurance company under its Shield Plan C for several years. The agent approached her and  advised her to upgrade to an A plan. He asked her a few questions and entered them into the upgrading form. She relied on the agent to handle the paper work as she was not conversant in English. The upgrading was approved.

15 months later, the elderly lady was diagnosed for colon cancer in a public hospital. The hospital advised her to seek treatment in a private hospital as she was covered under an A plan.

Due to complications, the total bill for the treatment in a private hospital amounted to $300,000. She submitted a claim under the insurance policy. 

The insurance company rejected the claim on the grounds that she did not disclose that she was suffering from diabetes at the time that she upgraded the cover. The elderly lady said that the agent did not ask her the questions in detail, and she was not familiar with the requirements.

What's wrong?
The insurance agent probably took some short cuts in completing the upgrading form. Perhaps, the agent was also not familiar with the requirements.

The elderly lady or her family should have checked the coverage of the policy with the insurance company before starting the treatment in a private hospital.

How to put it right
Before accepting a new application or upgrading for Shield insurance from an elderly person, the insurance company should ask the policyholder to go for a medical checkup. 

They should not reject a claim due to non-disclosure, if the mistake was done by the agent. 

The regulator, i.e. Monetary Authority of Singapore, should set out the code of practice for rejection of health insurance claims of this nature. I have been approached by many policyholders on similar problems.


3 comments:

Anonymous said...

The problem is that the present arrangements works very well in the interests of the insurer so why will it bother to do otherwise? It's like tails it wins & heads you lose.

Anonymous said...

This shield plan must be from NTUC Income because no other insurers have C plan.
Can't blame him or her ...the agent not qualified and worse don't care for the interest of the client.
This is best dealt with by MAS.

Kin Lian Tan said...

This shield plan is not from NTUC. It is from an "international" company.

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