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Discovery: Why we refused elderly man's R14m insurance claim

Sep 27 2019 19:03
Compiled by Lameez Omarjee

Discovery Life has said it did not deliberately withhold a life cover benefit to one of its clients.

Earlier this week the Cape Times reported how 65-year old Brian Daniels was denied a R14m payout from the life insurer after he was in a near-fatal car accident.

According to the report, Discovery Life refused to pay out Daniels on the grounds that he was 65 years and four months old at the time of the crash, when the cutoff for payouts is 65 years and one month.

However, in response to questions from Fin24, Discovery has said the reasons for not making a payout were unrelated to Daniels' age, but rather because he does not have a terminal condition meeting the policy requirements, which would warrant a payout.

"The client has a life insurance policy, on which they only have the life cover benefit which is payable in the event of death.

"This policy was not selected with benefits such as severe illness or disability cover, which are specifically designed to assist clients for a broad range of life changing events," Discovery Life said in an emailed response.

Discovery Life added that traditionally, life insurance companies only allow clients to receive a payment under their life cover benefit on death or terminal illness. A terminal illness benefit would allow the client to receive the full sum assured, if the client is diagnosed with an illness where life expectancy is less than 12 months.

Discovery Life said it has a medical panel, who works along with the treating specialist, to confirm the life expectancy of the client.

In the event that a client's life expectancy is reduced, but they could live longer than 12 months, Discovery Life may allow the client to access a portion of their cover through the Medical AccessCover Benefit. This benefit does not come at a premium, but it can only be paid out if certain medical criteria are met and if the client's existing life insurance policy premiums are fully up to date.

The Cape Times reported that following a car accident, Daniels tried to receive a payout under the Medical AccessCover Benefit - which is offered up until the age of 65.

However, Daniels could not access this benefit as he did not have a condition that fit the required medical criteria, according to Discovery Life.

Discovery Life's policy guidelines, which Fin24 has seen, show the conditions covered by the Medical AccessCover Benefit. The benefit may lapse for certain conditions after a client has reached a certain age, or may only come into effect after the client has reached a certain age.

Medical conditions include various forms of Stage 4 cancer, conditions affecting heart health, kidneys, as well as heart and lung, and pancreas transplants.

Cape Times reported that Daniels had been hospitalised for three weeks and, once discharged, was unable to walk, suffered muscle loss and a crushed larynx. 

"The Medical AccessCover Benefit only pays out on the more severe life changing events where there is a significant impact on a client's life expectancy and is not a replacement for severe illness or disability products which cover a far wider range of conditions," Discovery Life told Fin24.

"While we have full sympathy for this client, based on this investigation, the client’s condition did not meet the medical criteria of the Medical AccessCover Benefit," Discovery Life added.

When asked if Discovery Life considered any other way to help the client, the life insurance provider said it had explored all possible options. If Daniels had perhaps had some form of disability cover, he may have received a payout, the insurer said.

Appropriately covered

Discovery Life's head of technical marketing, Andrew McCurrie, told Fin24 by phone that this case highlighted the importance of making sure one is fully covered for any risks affecting one's quality of life.

Discovery Life's claim statistics for 2018 show that at various stages of life, clients face various risks. For example, the leading cause of death for clients under the age of 30 are suicide or car accidents.

Other trends show that suicide and depression are increasing risks for middle-aged clients (those aged between 41 and 50). Among women, breast cancer has been a leading claim for female clients aged between 51 and 60.

Discovery Life's trends also show that the leading cause of death among older men has been heart and artery conditions, followed by cancer.

financial services  |  life insurance
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