It’s Rugby World Cup time…. Richie Mounga is lining up a penalty kick. As he is in the process of kicking, two groundsmen come running out and move the goalposts! Couldn’t happen, right?
Yet, strangely enough, that is exactly what some banks offering life insurance policies do. They retain the right to move the goalposts if it is in their interests to do so. Let me explain why this insidious practice needs to be condemned.
Life and Health insurers are not all equal
Most mainstream life and health insurers honour the fact that an insurance policy taken up by a client. In good faith, with full and honest disclosure, is an unbreakable contract. They may enhance that policy by adding further benefits (at no additional cost). But they cannot unilaterally remove or lessen the conditions of the contract. This approach is the norm.
Yet, we continue to become aware of policy wordings from some companies. Which “move the goalposts” in relation to their clients’ policy. For example, one insurer provides “Serious Illness Trauma Cover”. This is not only poor-quality cover which bears no comparison against the more comprehensive Trauma covers provided by mainstream, quality insurers, but the policy wording also allows this company to unilaterally make any changes it wishes to the client’s policy. This insurer states:
“We can change the Serious Illness Trauma cover definitions and add or remove medical conditions covered. We can also change whether medical conditions are high severity or low severity…. We’ll give you at least 60 days’ notice of any changes and the date they’ll apply from…. If you’re not happy with any changes you can cancel your Serious Illness Trauma cover…. We may change the premium rates, the criteria for when different premium rates apply, and/or the method of calculating the premiums.”
This means that the cover you think you have, may not be the cover that actually applies at claim time. Furthermore, rather than premium rates being fixed for the usual, full, 12-month period, these policy wordings enable premiums to be increased with just 6o days’ notice. And if you don’t like the changes, you can cancel your cover! In other words, “if you don’t play by our rules, we don’t want you!”
Seek a comprehensive review
Frankly, these types of policy wordings, are a disgrace. Furthermore, they are typical of several banks’ insurance policies, If you have life insurance products in place with any bank here’s the best thing that you can do. Seek a comprehensive “warrant of fitness” insurance review with a quality insurance adviser. You owe it to yourself, your family and your business to have total confidence in your protection plan. Make certain that your interests are firmly protected.
It’s what we do!
Theo Simeonidis
UProtectNZ Insurance Services