- Page 26 chapter 1 In case of annually renewable accident and sickness insurance , whether a claim is payable for more than the specified period(say one year) if the claimant continous to satisfy the condition of incapacity. If so , why at all a specified period ? If not, aren't the insurer voilating the renewable condition.
Benefits will be paid while the claimant remains disabled up to a maximum of the specified period. The contract may be renewed each year, but the insurer will retain the right to review the premiums, benefits, terms and conditions etc at that time.
this is a very nice question!!! Just to be 100% sure. : If the policyholder wants to renew the policy, and the claims definition stays the same, will he just keep on receiving the benefit? Or maybe the insurer will reject his policy?
Presumably once someone is claiming benefit the insurer can't cancel their cover. It makes sense as otherwise an insurer would just cancel all claimants cover at the next renewal point (even if they are due to pay out benefits for longer!). Might raise a few TCF issues. So, once they are claiming the terms and conditions will be fixed.
My understanding would be as below. Accident and sickness insurance (ASI) is a short term contract. It is generally renewable every year. As to the question about if the policyholder is claim at the time of renewal, Anna's answer said that the claim was up to a maximum of a specified period. Technically speaking, you can see the renewal as a completely new policy. Say you are currently insured with Company A's ASI policy. You have made a claim and the payment started at the 9 month stage of your 12 month policy. The T&C suggested that any claim would last for a maximum period of 12 monthsor till recovery, whichever happens sooner, from the date of first claim payment. At the end of the 12 month stage of the policy, your policy expires, but the payment will continue to what the T&C suggested. Say you go out to the market and obtain quotes and decided to go for Company B for their ASI cover. Company A will still pay you as part of the contract. Company B will cover for any new inception during the following 12 month period. Assuming the policyholder condition is unchanged for the rest of his life, Company A would have paid for 12 month worth of claims to the policyholder, while Company B would not have paid a penny to the policyholder assuming nothing has changed (as the policyholder should not be able to work or somehow the replacement ratio may kick in!) So even though the contract of Company A lasts for 12 months, it just happens that the liability for the company is for a maximum of 12 month. So in summary: - Company A will pay for claims for a maximum period of 12 months (in the example) - Company B has no liability over the contract periods So no conflicts is between Companies A and B. But for your question, company B is company A. In order for the benefit to last forever, the policyholder has to somehow lodge another claim during each contract period. But at the time of renewal, given it is a short term contract, an exclusion might apply. So the policyholder will need to come up with something different. Hope this makes sense. (This also ties in with what Anna answered!!)
Imagine a policyholder takes out an annually renewable policy on 1 January, where benefits are paid for 12 months. The policyholder makes a claim and the benefit starts being paid on 1 July. The policy is then up for renewal on 31 December, when the policyholder is still claiming benefits. The insurer may decide to offer cover for another year, or to refuse to offer cover. If they offer cover for another year, they can change the terms, benefits and premiums of the new policy at this point. The insurer will continue to pay out the benefits for the remainder of the claim based on the terms and conditions on the previous year's policy (up to 30 June the following year, 12 months after the benefit started). If they refuse cover, the insurer will continue to pay out the benefits for the remainder of the claim and the insured will have to look elsewhere for cover. Hope this clears things up
closure... Nice thanks for your replies people! I guess I couldn't see the point of having a policy like this. I see in chapter 6; page 7; in the paragraph that starts with "(2)"; that these policies are actually used to cover e.g. monthly loan servicing costs. For this need it will make sense that benefits stop at a particular time. I am moving away from here now. Going to start CA1 again. FOR THE 4'TH TIME!!!
When my husband was contracting (and thus had no sick leave), he was advised by his IFA to purchase two products from two separate insurance companies. One paid a specified income for any days that you were sick, even for just one day off, up to a maximum period of six months. The second policy had a six month waiting period, but paid an income all the way up to age 65. So by purchasing both, you were covered in a way that was comparable to what you might get from a generous employer. Fortunately we never made a claim, but this is another way that you can use an Accident & Sickness product, i.e. to cover you for the waiting period on your IP contract!
