JOHANNESBURG - Accidental death and injury insurance are significantly different from, say, medical aid in that it is paid because of an “event” (accident); whereas a medical scheme covers all costs related to a medical or dental condition.
“Accidental death and injury cover offer policyholders financial support; it is not meant to replace a medical scheme,” said Sonja Visser, the chief executive of life insurance provider African Unity Life. “Rather, it is to help accident victims or their loved ones deal with the costs associated with the incapacitation or death of the policyholder due to an accident.”
Accidental death and injury cover can be added to a life policy.
A personal accident policy provides cover if the insured is injured and admitted to hospital or is left disabled and/or dies after an accident.
Policyholders should familiarise themselves with events that this insurance does not cover: self-inflicted injury; injury due to mental disability; hospitalisation, disablement or death due to a hazardous pursuit; hospitalisation, disablement or death due to alcohol or drug abuse; non-accident-related hospitalisation; death and disablement due to an accident or injury that occurred before the policy commenced; and suicide.
In general, people take out life insurance to protect their families from financial hardship when a loved one dies.
However, it is possible that a life insurance claim can be rejected.
The most common reasons claims are rejected are:
- The person who died was still within a waiting period. Most funeral policies have a waiting period before the policyholder or their family can claim. This is to prevent people from only taking out insurance when they have a life-threatening condition. If the policyholder or other insured family member dies within the waiting period, they will not be covered.
- There were exclusions in place. Some assurers will exclude certain pre-existing conditions from the cover. So, for instance, a policyholder with diabetes or a heart problem might be excluded from cover for death due to these conditions.
- You withheld information from your assurer. When you take out your life insurance policy, don't try to make yourself sound healthier than you are. You might smoke or take drugs, or you might have a pre-existing condition or engage in a dangerous sport. Disclosing these does not mean that you will be denied cover, but withholding the information could mean that your claim is denied if you die due to it.
Your premiums aren't up to date. If, at the time of dying, your premiums aren't up to date, your life insurer may reject a claim subject to the insurer complying with legislative prescribed cancellation procedures. By law, insurers must give their customers a grace period, which is usually a month.