SCORPION ADVISES ON WHEN INSURANCE WON'T PAY OUT!

When Sina’s mum died, she put in a claim with her mum’s life insurance policy.

She was the beneficiary.

But the insurance rejected her claim because they said there was missing information about her mum’s death.

This despite receiving all the documents they asked for from Sina.

Azikhiphi! That’s not on!

So, Sina went straight to her nearest Scorpion branch for help.

What does the law say?

In Mzansi contract law, there is something called stipululatio alteri.

This means the insurance company can promise to give your nominated beneficiaries (people that you choose to receive the benefit, like Sina) some sort of benefit (your cover payout) when you die.

How does it work?

When you take life insurance, you need to nominate beneficiaries. If you don’t want beneficiaries, your insurance will pay out to your estate.

There are two types of beneficiary clauses:

• Revocable – your beneficiary has no rights to your policy until you’re dead.

This means you can change or remove the people you have written down as beneficiaries.

• Irrevocable – you won’t be able to remove or change your beneficiaries without their permission.

Your beneficiary gets rights to your policy once they accept the nomination in writing. This means that you’ll be allowing someone else to make decisions about your life cover.

Can a claim be rejected?

Your life insurance provider should pay out the claim to your beneficiaries, but there are cases where a claim may be rejected:

• You didn’t give the insurance the full facts about the person’s medical condition, their way of living or how they died.
• They commit suicide within two years of taking out the policy.
• They die before the waiting period is up.
• They die in war or a terrorist act.

None of these are true for Sina’s claim, so the insurance should pay out.

If they reject the claim, the matter can be referred to the Long-Term Insurance Ombudsman’s offices.

Can Scorpion help Sina?

Scorpion can speak to the insurance provider on Sina’s behalf, and if they still insist on rejecting the claim, they can help Sina refer the matter to the Long-Term Insurance Ombudsman.

If you want legal help, join SCORPION LEGAL PROTECTION