Q: Should I know the Terms and Conditions of a contract that has not been provided to me? Is it my duty to ensure that the insurer provides me with
the contract?
A: Contracts differ according to financial industry services and products.
• A long-term insurance contract is for a specific term of insurance and it remains the same for the insurance period, e.g. 20 years or for a life term, and any change will be upon agreement between the insurer and the insured by amendment.
• On the other hand, the contract for short-term insurance is an annual contract, in other words in it is renewed on the annual basis. The terms and conditions of the contract are usually adjusted annually as the insur-er mitigates and controls their risk appetite through different variables, e.g. claim history.
• It is the duty of the financial service provider to ensure that the terms and condition of the contract are provided to the other party. Similarly it is the clients’ responsibility to ensure that they know what they bought or are paying for, and understand the benefits and the conditions thereof. So it is only good to ask for your contract if you do not have it.
Clients must note that practically they can amend the contract anytime, e.g. add or remove benefits.
Q: Do I need to submit documents to the insurer at claim stage if they did not request the same documents at application stage? Can I sign the ap-
plication form on behalf of the life insured if I am paying for it?
A: When a person claims benefits, a loss needs to be proven. Such loss must be in line with the risk it is covered for and that the risk was uncertain at the time insurance was issued. This applies to both life insurance as well as short-term insurance. The life insurer needs to verify that the insured did
not have an ailment prior to taking out insurance that was not disclosed. If the insurer cannot prove that the insured was not ill prior to taking out the policy, the insurer will assume that the illness was certain at application stage. Also, if the insured cannot prove that the insured owned the item be-ing claimed for, the insurer will assume it did not exist. In commercial claims the onus of proof falls upon the claimant.
Accordingly, documents requested must be provided. It must be noted that such documents must be mentioned in the claim procedures.
You may only sign on behalf of someone if you have a mandate or power of attorney to do so. The consequence is that if you sign on behalf of someone without the written authority to do so the contract will not be valid.
Q: Can I sign on a blank form and have the insurer complete it later?
A: Never sign blank documents! Forms to apply for financial service prod-ucts become the basis of your contract and forms to claim for a benefit are the basis to the outcome of your claim. You must always know what you are signing for because you are bound to the terms of the contract/outcome of the claim even if you sign blank documents.
Q: What is required as proof to claim benefits from someone else’s insur-ance policy? Will the fact that the person is my relative or that I am stated
as an heir in their testament/will suffice?
A: Insurance is a contract between the insurer and the insured. The insured normally nominates one or more beneficiary to have the right to claim from the policy. Generally speaking, insurance benefits do not form part of the will, therefore the insurer will only pay as per the contract. If there is no nominated beneficiary, the benefit is paid to the estate account after the executor of the estate lodges the claim.