Old Mutual reveals the main reasons it turns down insurance claims

Life insurer Old Mutual says it paid out R4.49 billion in underwritten risk cover claims in 2017, amounting to 96% of all valid risk cover claims received for a third consecutive year.

According to the groups’ claim statistics, the top two reasons for claims in 2017 were once again cancer and tumours (30%) and cardiovascular disorders (18%). Cancer, heart attack, coronary artery bypass graft (commonly referred to as CABG) and stroke constitute the ‘Big Four’ severe illnesses that account for 81% of all the severe illness claims paid.

The 2017 statistics also showed that 99% of the severe illness claims were for conditions that Old Mutual covers at 100%. Overall, Old Mutual South Africa said it paid R10 billion in underwritten, non-underwritten and corporate claims in 2017, which equates to over R83,000 every working minute.

The statistics also showed that 95% of all valid disability income claims were paid, highlighting the importance for consumers to protect their income against illness or injury that could hamper their ability to work, even if it’s only for a temporary period.

Furthermore, 75% of all disability income claims paid were from people under the age of 50 and claims from men accounted for 63% of all disability claims.

Key take-outs from Old Mutual’s 2017 underwritten claims statistics for 2017:

  • Death cover claims paid: R3.48 billion (99% of valid death claims);
  • Disability cover claims paid: R412 million (82% of valid disability claims);
  • Severe illness and physical impairment cover claims paid: R590 million (82% of valid severe illness and physical impairment claims);
  • Retrenchment cover claims paid: R7 million;
  • Claims according to gender: 58% male and 42% female.

Old Mutual stressed the importance of customers getting the right advice from accredited financial advisers and taking the time to understand their cover, so they know what they are covered for and when to claim.

This will help to avoid mistakes like submitting claims under the incorrect type of cover (e.g. submitting a claim for a broken arm under death cover), as well as submitting a claim when the cover no longer exists because it was cancelled or premiums weren’t being paid.

“While only 4% of claims were declined in 2017, the majority of these declined claims were turned down because the event being claimed for did not meet the benefit definition,” it said.

Why 4% of claims were declined:

  • Benefit definition not met [72%]
  • Non-disclosure [17%]
  • Suicide exclusion [5%]
  • General exclusion [3%]
  • Underwriting exclusion [2%]
  • Fraud [1%]

Since 2005, Old Mutual said it has paid over R156 million in immediate cover claims – R26 million in 2017 alone.

Immediate cover claims are paid before a customer has paid their first premium. The main causes of death claims paid include cancer and tumours (26%), accidental death (22%), cardiovascular disorders (21%), respiratory system disorders (10%) and central nervous system disorders (7%).

Read: These are the best and worst life insurers in South Africa in 2018

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Old Mutual reveals the main reasons it turns down insurance claims