WARNING! What you need to know before cancelling insurance policies
After a viral dispute between the Molefi family and Old Mutual, many people have been cancelling their insurance policies.
Concept of life insurance. family protection, protective umbrella, 123rf.com
Relebogile Mabotja speaks to Wendy Knowler, Consumer Journalist.
Listen to the interview in the audio below.
After hearing about the Molefi family's dispute with Old Mutual, many people have been calling for an end to the insurer.
In this case, the client complained that Old Mutual was not paying out her mother’s pension.
After some back and forth and legal battles, Old Mutual revealed that the reason for the dispute around the payout was an undisclosed divorce which would affect how a pension is paid out.
Knowler notes that an insurer does have the right to deny your claim over any information not disclosed, even if it is not directly relevant to the claim.
“Disclose everything when you are taking out these life policies… you don’t want it to come back to bite you.”
- Wendy Knowler, Consumer Journalist
However, the ‘court of public opinion’ will also have an impact on these cases.
Multiple clients vowed to cancel their policies, with a large number showing proof that they followed through on their promise.
However, there are implications of cancelling your insurance policy, which some may not be aware of.
Denise Gabriels, Lead Ombud for the National Financial Ombud Scheme South Africa (NFO), says that in the case of a cancelled risk policy you are not entitled to get any of your premiums back.
Scenarios where you can get a refund are, if you cancel within the cooling off period of 31 days, or if there was not a clear understanding of the contract between the parties.
In addition to this, if the cancelled policy is a funeral policy, there is a chance you will have to go through a waiting period with your new policy before you can claim.