Momentum CEO: This is why we were right to reject the R2.4m life policy claim
Update: Momentum announced on Tuesday afternoon that it would be paying out the death benefit. It said it had created a new rule to 'pay out when [a] death was a direct result of violent crime, even when material medical non-disclosure impacts the legitimacy of the contract'.
Momentum Life CEO Johann le Roux says that based on the outrage following the insurance company's rejection of a R2.4m payout, it is clear that the public is not as informed about policy payouts as they would have hoped.
Momentum's rejection of a life insurance payout due to the non-disclosure of a pre-existing health condition by policy holder, Nathan Ganas, has sparked anger on social media and widespread debate about the guidelines governing insurance companies' right to reject or approve claims.
On Twitter and Facebook, policy holders have threatened to cancel their insurance with Momentum if the decision is not reversed.
Ganas died from gunshot wounds in March 2017 when he was hijacked in his driveway. But the insurance firm refused to pay his R2.4m policy claim after it was discovered that he suffered from high blood sugar levels.
Momentum said its decision to reject the claim has also been confirmed by the Ombud for Long-Term Insurance.
"We recognise that although we are doing the right thing, it is apparent that the public at large are not as informed as we hoped. As an industry, we need to elevate the importance of full disclosure," said Le Roux on Monday.
He said clients do not have to inform them of a change in their health after the commencement of their policies, or if they develop any medical condition that they were unaware of or which didn't exist at the time of taking out the policy. In all of these instances, Le Roux said the client would be covered.
"That is exactly the purpose of life insurance - to cover them for these events," he said. "If they find out later that they have a condition or if their health deteriorates, they are not obliged to notify the insurer regarding their existing policies but will have to notify the insurer if they take up additional cover," he said.
Non-disclosure of pre-existing conditions, however, was a different matter.
He said in some instances, a life policy could also be rejected during the application process.
"This may vary based on several factors. Examples may include occupation (bomb disposal), avocational (base jumping), financial (no insurable interest or over insurance)."
Le Roux said that they have no doubt that the matter was handled fairly.
"We have a responsibility to all clients in terms of following standard procedure across the board. The ethics and principles that guide Momentum is that we take into consideration our full community of insured clients who fully disclose all relevant medical information during the application stage," he said. "In addition, in this case we have made a business decision to waive the requirement for a repayment of the R50 000 paid as instant cash."
"Refunding premiums where benefits are being declined due to non-disclosure is our normal practice, therefore we are also paying back premiums received on this policy."
Le Roux said should the Ganas family wish to pursue the matter further, they should submit any new information that may not have been provided when the claim was assessed. She (Mrs Ganas) can appeal the ruling or she can take the case to a court of law."
According to EWN, Denise Ganas, the widow of Nathan Ganas, has decided to take the matter to court.
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