Exclusion Clauses – No Pay Out When You Were Relying On It
August 11, 2015
Exclusion clauses are not interesting to most South Africans.
When they look for a good funeral plan, the underwriter must be a reputable long-term insurance company.
They know that this ensures they have successful legitimate claims and payouts in the case of insured events
However they want more from their funeral insurance plan. They don’t appreciate hearing that there are exclusion clauses even though their funeral policy comes from a reputable insurance company.
Make Sure you Know what Exclusion Clauses cover
On scanning their funeral policy, they see that the name of the underwriter is there, the claim procedures and the benefits payable. They don’t like seeing that there are exclusions.
It is for this reason that it is important to read the fine print carefully so you know exactly what you’re getting and what you will not be getting for your money.
You may have had a suicide in your family for instance, only to discover that your funeral policy has excluded suicide, and it won’t pay out. Read the policy carefully and make sure you understand the terms of the policy. This will ensure you don’t hvae massive expenses and that your ‘unreasonable’ funeral policy provider does not disappoint you.
If you are Not familiar With your Contract you Could be In for a Surprise
It is important to realise that there are some circumstances where an insurance company will not pay out a Funeral Benefit. Take Suncorp Funeral Insurance for instance. Exclusion clauses with them apply for the first 12 months after your policy start date.
Known as the ’12 month accidental death only period’, if you had an injury before you took out the insurance policy, and you die during the first year of your policy because of that injury, the Funeral Benefit isn’t going to pay out.
When an exclusion clause applies and the insured person dies as a result of the excluded event, the funeral benefit will not pay out. Way back in 2003, there were many complaints about AVBOB because they repudiated policies at the very time that families needed to bury their loved ones.
AVBOB wanted these families to pay back their pay-outs. This followed AVBOB investigations which revealed that the deceased person could have died of AIDS related illnesses.
There are certain imposed conditions upon which a person applying for funeral cover is not going to be covered. They won’t be receiving any funeral benefit. Certainly there are some exclusion clauses which can’t be frowned upon by anyone. One or two of these where a benefit will not be paid if a claim arises from it are –
- you haven’t been honest with the information you have supplied for a claim
- or you have committed a criminal act
- or you have been outside of South Africa for more than 3 months
The Ombudsman receives a fair share of complaints from people who claim they were not aware of exclusion clauses. And they can’t claim. To be aware of the exclusions in your funeral policy, insist on getting a copy of the contract. Look at the waiting periods and the exclusion clauses of the policy.
Do Thorough Research
When you choose funeral cover, make absolutely sure you’re choosing a reputable insurer. Do research, read what customers say about them and make sure you can trust them to pay out adequately when you need them to. Avoid exclusion clause issues this way.
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All info was correct at time of publishing