Apr 16 2021, 10:35 AM
QUOTE(Limster88 @ Apr 16 2021, 10:28 AM)
The problem with the Malaysian style of attaching health riders to an ILP plan is that when an underwriter needs reject the life plan, everything attached to it will be rejected as well.
Mental conditions have a great impact on life cover. Suicide after the waiting period is claimable, so for a person with history of mental issues it is one of the risks the insurer had to take into consideration. Depending on the risk philosophy of the company, some companies will decide that these risks are not something that they want to take.
In the end it is all about price. A more conservative insurer that screens out applications more tightly can limit its future claims. This gives it more room to either earn more profits, or, reduce / control premium prices to be more competitive in the market.
And yes, insurers adopt the utmost good faith concept in approving policies. This is also in line with PDPA regulations. After all, if you are honest upfront, there's nothing to worry about right? An insurance policy is just a contract, so the insurer is bound by it if the premise of the contract is valid.
The government also do not want the insurers to willy nilly obtain and keep people's personal health information, so this is the current practice. Not all policies will turn into claims, so there is no need for insurers to be so intrusive and check everyone's health background. You think that the insurers don't want to get everyone's information? Given the chance they definitely want to. More information means more accurate actuarial projection, means better pricing and competitiveness.
Long ago, before PDPA laws came into force, we used to have this LIAM system, where insurers will share with each other on the health conditions of their clients. There is no escape. If you are rejected by company A, then you try to apply with company B, you will also be rejected coz they also know about the health conditions too.
Then came PDPA enforcement and all these ended. Now the industry had to operate on a more limited information and therefore had to start trusting their customers based on utmost good faith.
The only time the insurer has expressed approval to check everything regarding to your medical background is during claims, because this is the only time that PDPA rules allow them to fully access your medical records. So you can be sure that if you do not disclose information to your insurer and they find out about it, it will then go to post claims underwriting, where we will re-underwrite the application again, assuming that if we know about the condition in the first place, what will the underwriting decision be.
For example, let's say someone lied about smoking during the application, thinking that they can pay cheaper premiums. This commonly happens.
The problem will come when they claim, coz when their doctors ask them about their health condition, people tend to answer honestly so that the doctor will be more accurate in their diagnosis. So upon claims and the insurer gets the medical report from the doctor, claim assessors will cross check the declaration and information from the doctor and if they find out that this client had been smoking when the application was signed, you can bet that before paying out the claim, the insurer will readjust the contract and calculate all the back pay of premiums that this client needs to pay, which they can either deduct from the claims payout or if it is not enough, demand the client to pay the balance. If the client refuse, then obviously this contract is not valid from the start, and the insurer can void it.
Thanks bro for articulating whatever that is in my mind into writing. Kudos Mental conditions have a great impact on life cover. Suicide after the waiting period is claimable, so for a person with history of mental issues it is one of the risks the insurer had to take into consideration. Depending on the risk philosophy of the company, some companies will decide that these risks are not something that they want to take.
In the end it is all about price. A more conservative insurer that screens out applications more tightly can limit its future claims. This gives it more room to either earn more profits, or, reduce / control premium prices to be more competitive in the market.
And yes, insurers adopt the utmost good faith concept in approving policies. This is also in line with PDPA regulations. After all, if you are honest upfront, there's nothing to worry about right? An insurance policy is just a contract, so the insurer is bound by it if the premise of the contract is valid.
The government also do not want the insurers to willy nilly obtain and keep people's personal health information, so this is the current practice. Not all policies will turn into claims, so there is no need for insurers to be so intrusive and check everyone's health background. You think that the insurers don't want to get everyone's information? Given the chance they definitely want to. More information means more accurate actuarial projection, means better pricing and competitiveness.
Long ago, before PDPA laws came into force, we used to have this LIAM system, where insurers will share with each other on the health conditions of their clients. There is no escape. If you are rejected by company A, then you try to apply with company B, you will also be rejected coz they also know about the health conditions too.
Then came PDPA enforcement and all these ended. Now the industry had to operate on a more limited information and therefore had to start trusting their customers based on utmost good faith.
The only time the insurer has expressed approval to check everything regarding to your medical background is during claims, because this is the only time that PDPA rules allow them to fully access your medical records. So you can be sure that if you do not disclose information to your insurer and they find out about it, it will then go to post claims underwriting, where we will re-underwrite the application again, assuming that if we know about the condition in the first place, what will the underwriting decision be.
For example, let's say someone lied about smoking during the application, thinking that they can pay cheaper premiums. This commonly happens.
The problem will come when they claim, coz when their doctors ask them about their health condition, people tend to answer honestly so that the doctor will be more accurate in their diagnosis. So upon claims and the insurer gets the medical report from the doctor, claim assessors will cross check the declaration and information from the doctor and if they find out that this client had been smoking when the application was signed, you can bet that before paying out the claim, the insurer will readjust the contract and calculate all the back pay of premiums that this client needs to pay, which they can either deduct from the claims payout or if it is not enough, demand the client to pay the balance. If the client refuse, then obviously this contract is not valid from the start, and the insurer can void it.
This post has been edited by lifebalance: Apr 16 2021, 11:59 AM
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achieved a full and final settlement in one of the two insurance policies she is claiming for.....
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