Rejected health insurance claims due to alleged non-disclosure

When you buy life or health insurance, the insurance company ask you to declare your medical history. The consumers do not know what should be declared and what does not need to be declared. He or she relies on the insurance agent to help fill up the application form.

The agent is likely to avoid declaring medical conditions that will lead to questions and possible rejection of the application.

When the insured makes a medical claim, the insurance company checks with the doctors that treated the insured in the past. Quite often, they find a medical condition that was not declared in the application form. They use this non-declaration as the reason to reject the claim.

This has been the practice of the insurance companies up to now. It is a bad practice and is quite unfair to the ordinary consumers.

There is a better way. I am surprised that the insurance companies do not adopt this better way. I am also surprised that the regulator, i.e. Monetary Authority of Singapore, did not insist that the insurance companies adopt this better way, to avoid the unfair rejection of claims.

What is this better way?

The insurance company should check with the doctors at the time of the application to obtain the past medical history and decide if they wish to insured the consumer. If they are not happy with the past medical history, they should reject the insurance at that time.

The regulator can pass a regulation to require the insurance companies to carry out the checking of the past medical history at the time of application. If the insurance company accept an application, the insurance company should be disallowed by law from rejecting a claim due to non-disclosure of the past medical history.

I hope that the regulator will pass this regulation to avoid the bad cases of rejected claims due to alleged non-disclosure.

Tan Kin Lian