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What Momentum's about-turn means for clients

Nov 21 2018 08:39
Khulekani Magubane, Fin24

Momentum on Tuesday evening announced that it would be paying out a death benefit to the widow of its slain policy holder Nathan Ganas. The life insurer had initially said it would not pay out the policy due to non-disclosure, but backtracked after coming under heavy criticism.  

Here's what Momentum's decision means for their policy holders. 

Violent crime guarantee

The group announced that it had created a solution that would pay "an amount equal to the death benefit (limited to a maximum of R3m) in the case of violent crime, regardless of previous medical history. This will apply to all existing as well as future life cover clients."

It added: "The guarantee will pay out when the death was a direct result of violent crime, even when material medical non-disclosure impacts the legitimacy of the contract." 

Full disclosure still a must

Momentum said that failure to disclose pre-existing conditions on taking out a policy could still lead to a claim being rejected. The new guarantee only covers cases of death by violent crime. 

Retrospective adjustment

Momentum said the payout would not be in addition to a normal death benefit payout, and would only apply in circumstances when the death benefit will not be payable or has been reduced.

"The guarantee will apply immediately to all our life cover clients, and will be applied retrospectively," it said. 

It's looking for clients who may be impacted

The group said it was in the process of identifying clients who were "impacted in this way and we will contact their families to arrange payment".

Payout provisions

The company said the death benefit payout would be fully funded from Momentum’s profits, and not from the premiums of clients.

Death benefit and health changes unrelated

Momentum said the only time when the status of a client's health is taken into consideration will be when a client applies for cover.

"If your health deteriorates after commencement of the policy, there is no need for you to inform Momentum – your claim will be completely valid if the information provided at the start of the policy was accurate," it said. 

Reaction 

Initial reaction to Momentum's decision on social media - where it had previously come in for heavy criticism - was mixed. While some praised the company for making the change, others said it wouldn't be enough to get the life insurer back into their good books. 

momentum  |  insurance  |  hijacking
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