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The Insurance Contract

The insurance contract



When you take out ‘Life Insurance’, it is important to understand exactly what you are covered for – and what you are not covered for.




Health insurers put conditions on the benefits they pay out to keep costs and premiums down. Insurance providers are required by law to disclose all relevant information to policy holders in their policy documents. But a disclosure works both ways. Insurers rely on full and honest information given by applicants to assess risks and set premiums accordingly.


Providing information to the insurer




Either at the time of application (for underwritten policies) or the time of claim (for auto-acceptance policies), you will be required to provide information about your health, lifestyle and family history.



This information is used by the insurer to assess your likelihood or risk of requiring medical care and for assessing claims.



Like all contracts, insurance policies are made in good faith. Your insurer relies on your honesty and you are legally required to disclose and facts or information relevant to your application for insurance. Failure to disclose relevant information may lead to your policy becoming void.


Important information for you to understand



Pre-existing conditions:
You will be asked about any pre-existing medical conditions. These are ailments, illnesses or conditions where the signs or symptoms are present before you take out insurance or upgrade to a higher level of cover. A pre-existing condition may not prevent you from obtaining health insurance cover, but you may be charged higher premiums to cover it or your insurance may not cover you or any future medical expenses related to this.


Exclusions:
This refers to a health condition – or certain procedures or circumstances – that your insurance provider does not provide cover for. Excluded health conditions tend to be Pre-existing conditions or those connected to the misuse of drugs – prescription and non-prescription – and alcohol.


Benefit limits and maximums:
Some policies may limit benefit amounts to a set maximum for some operations and procedures, while some policies have clauses that restrict benefits for all conditions. This means you need to read policy documents carefully in order to compare and contrast exactly how much you can claim.


Stand-down periods:
An insurance company may impose a waiting period before you can make a claim. The length of a claim stand-down period may vary from policy to policy.


Change of circumstances:
Most policies will allow you to add or remove family members, such as your children from your policy, add or remove options, or change the excess.


14 day free look period:
Your insurer will send you policy documents when your policy has been set up. You will have 14 days from the day you receive them to decide whether the product is suitable for you. If you want to cancel your cover, you must do so within the stated period and tell the insurer that you want to cancel your cover. If you have made any payments you will usually receive a full refund unless you have made a claim.


Going overseas:
Few policies have accident cover for overseas travel, so travellers are advised to take out separate travel insurance. Many insurers allow you to suspend your policy and cover if you are travelling overseas for an extended period.



Source: Sunday Star times – Essential guide to Health Insurance


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Futureproof Life is a family owned business specialising in risk management & lifestyle protection solutions for businesses & families.
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Phone 09 413 6070