JOHANNESBURG, November 21 – Life insurer Momentum on Tuesday capitulated to public pressure and changed, not only its stance, but its payout policy regarding death claims in cases of violent crime, regardless of previous medical history.
Momentum has been under severe public criticism since the weekend when it emerged that the company had declined an application for a R2.4 million life insurance payout for Durban resident, Nathan Ganas, who was killed in a hail of bullets trying to protect his wife during a hijacking in the driveway of their Shallcross home last March.
Ganas’ claim was declined by the insurer on the grounds that he had not disclosed that he was diagnosed with raised blood sugar levels which may have occurred before he completed his application for the policy in 2014.
Momentum had initially stuck to its guns that it would only allow Mrs Ganas to keep the of R50,000 it immediately paid to cover urgent expenses and refund their policy premiums, adding that paying the full claim would jeopardise other clients’ premiums and encourage further non-disclosures.
But on Tuesday, Momentum said that it was clear from market reaction over the last two days that under certain circumstances, current industry practice creates the impression that insurers were looking for reasons not to pay a claim.
“Momentum is in the business of paying claims and we have therefore taken the criticism to heart. We have created a solution that will pay an amount equal to the death benefit, limited to a maximum of R3 million, 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 said in a statement.
Momentum said this payout will be fully funded from its profits, and not from its clients’ premiums. 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.
The company said the payout was not in addition to the normal death benefit, as it only applies in circumstances when the death benefit will not be payable or has been reduced. Momentum reserves the right to reject any fraudulent claims.
“The guarantee will apply immediately to all our life cover clients, and will be applied retrospectively. We are identifying clients who were impacted in this way and we will contact their families to arrange payment. This includes Mrs Ganas. The importance of full and honest disclosure at application stage cannot be overemphasised,” it said.
“The only time your health status matters, is when you apply for cover. This is when you need to share all your medical and health information. 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.” (ANA)