26 October 2021: Insurance – The outbreak of the Covid-19 pandemic has shone a spotlight on the need for consumers to familiarise themselves with their insurance cover and what they need to comply with in order to lodge a successful insurance claim, says Kabelo Gude, Chief Operations Officer at Hollard’s Life Solutions division.
Gude points out that, according to the 2020 Annual Report of the Ombudsman for Long-Term Insurers (OLTI), the Ombudsman received 14 198 requests for assistance in 2020, with 6 756 chargeable complaints. A chargeable complaint is one that has been reviewed by an organisation through its internal processes for it to be considered. Of those, 1 373 cases, or 32% of the cases lodged, were settled in favour of complainants.
In the period under review, the Ombudsman received 456 complaints directly related to Covid-19 or the lockdown, with the majority of these (36%) being about credit life benefits, while funeral cover disputes accounted for 42% of all complaints received by the office that year.
Gude points out that the most common complaints directed at long-term insurers over the past 18 months revolved around poor communication, failure to provide necessary information, and claim repudiations.
“Now more than ever, it’s essential for consumers and policy holders to familiarise themselves with their policies, to ensure that their premiums are up to date, to understand any exemptions and exclusions and know what their policies cover. Merely submitting certain documents to an insurer does not necessarily mean that a claim will be paid. Each type of claim has different requirements and may be assessed differently,” explains Gude.
He highlights the following around the claims process:
“The number of deaths in South Africa due to Covid-19 currently stands at just over 86 000, according to the National Department of Health, and we’ve seen some concerns raised by policyholders resulting from a lack of understanding of the claims process. This is not to say that a majority of claims aren’t paid – in fact, Covid-19 has seen Hollard pay out record amounts in death benefits, with just over R3,6 billion paid to date.
To ensure an efficient claims process, it’s important for policyholders to know how to make a claim. The most common mistake policyholders make is not submitting all necessary documents. Supporting documents are very important in terms of establishing the veracity of a claim, and these documents assist in fast-tracking the claims process.
Assigning third party persons to lodge a claim on behalf of a policyholder may have an impact on the outcome of the claim. Each claim is assessed on its individual merits. So, it’s essential that policyholders familiarise themselves with their policy cover,” Gude explains.
Gude notes that Covid-19 has placed many consumers under financial strain and that many consumers have started defaulting on their insurance premium payments to free up limited financial resources. He reminds policyholders that most funeral policies lapse after three payments have been missed.
“At Hollard policyholders who choose to reinstate their funeral policy within three months from the effective lapse date are not subjected to any waiting period and no arrear premiums are due, but this may not be the case with all insurers. Again, it’s essential for policyholders to understand what their particular policy says with respect to reinstatement”.
“We understand the financial strain that many consumers are facing, and that it has been exacerbated by Covid-19. While we appreciate that many pressing priorities are fighting for a share of wallet, the pandemic has taught us the importance of having active insurance cover because of the safety net it provides your loved ones. We encourage consumers who are battling to keep up with their premiums to consider reducing their payments and cover to ensure they can maintain cover.
“After all, insurance is important, but the importance is only realised when the unpredictable happens,” Gude concludes.