One of the most common grievances about the insurance industry is that it can be a nightmare trying to get your insurer to pay up. Now, what should you do if you ever find yourself in such an unfortunate situation?
Words by Seng Bingyang
Recently, a blog post on insurance claims appeared on my Facebook newsfeed that I noticed was shared by quite a number of people.
In a nutshell, this is what the post is about:
[Free Ebook] How should you invest your first $20,000?
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
- A mother suffered from excessive bleeding after childbirth (post-partum haemorrhage, a pregnancy and childbirth complication), and her hospital bill came up to approximately $24,000.
- Unfortunately, post-partum haemorrhage is not one of the complications covered under her chosen insurer’s hospital plan.
- She felt indignant but at the same time blamed herself for not going through the terms of the policy contract.
- She felt that she had been misled into purchasing an inadequate health policy because of the information provided by the insurer and the salesperson.
- The mother also expressed her displeasure at the insurer’s marketing and promotional activities. This is because she felt that the insurer had hidden under the fine print indicated on their marketing brochures and had misled the public with their TV commercials. She wrote the article to warn readers of such “unethical” behaviour.
Like many others who stumbled upon this post, I felt extremely sorry for the mother and her family. It must be traumatic to realise after a happy occasion like welcoming a new-born into the family that she is now entirely responsible for the hefty hospitalisation bill (largely due to the pregnancy complication).
It doesn’t help to know that she had actually taken steps to ensure that this would not happen by purchasing a hospital plan prior to the incident.
Now, what can we learn from her story and how can we ensure that we do not fall victim to a similar event?
Oftentimes in public, I have overheard people speak of their own preferences for certain companies’ products and their inclination towards certain types of advisers.
This leads me to believe that on another given day, someone somewhere might come along to speak of their bad experience with ABC Company or XYZ Company. Another someone might appear to condemn his agent or adviser.
In other words, every company or person out there will have their own critics.
Therefore, I find that it is extremely crucial for the public to be aware of a few things and not let a “distasteful experience” like the one the mother had cloud the importance of being appropriately insured.
So, let us quickly go through the following important points:
1. Brochures and TV Commercials are marketing materials. Marketing materials are largely meant to promote products and services. While there are exceptions, we can generally assume that they do not equal an offer, one of the essential elements needed to form a contract.
Many years ago, there was a popular McDonald’s commercial that went “A visit to McDonald’s makes your day.” And in the last decade, we have been constantly fed the tune of “ba-da-ba-ba-ba… I’m lovin’ it.”
Well, because you and I definitely know at least one person who doesn’t love it and who doesn’t find that a visit there makes her day, would you say that McDonald’s has misled consumers?
We should just take TV commercials with a pinch of salt, and use brochures as nothing more than basic information. It is important to go through your policy contracts, including exclusions and waiting periods, and not just the premium and investment return (if any).
2. All insurance companies grant a 14 day free-look period and this is when you can look through this document with your agent thoroughly and ask any additional questions you might have. Should there be any discrepancies between what you want and what you are getting, you have the choice to withdraw the application at no cost/penalty.
3. In all my years in the insurance business and as a consumer, I have never come across a company that can provide a product of the best quality with the best service at the lowest cost.
I can understand that as savvy consumers, we are always shopping for the “cheapest deal”. Yet it is more important to decide what you want out of this “deal”.
Akin to budget flights, I’m sure none of us expect to be showered with tender loving care on a no-frills airline. But of course, we can expect basic service like being flown from point A to B without compromising our safety and lives. Similarly, you can trust that your chosen insurer will do their very best to honour their contracts, whatever the agreed terms are.
4. This brings up another point that puzzles me: isn’t this one of many good reasons why you want a financial adviser by your side?
In the face of a tragedy, many of us stop thinking rationally while under stress. Therefore, it would make sense to have a professional help you during the claims process, which allows you to spend your time getting well without having to worry about the financial aspect of the tragedy, wouldn’t it?
If you need more convincing and perhaps some useful tips on how to select a financial adviser, read this for more information.
What can you do if you truly believe that you have a strong case against the insurer?
For any disputes with a financial institution such as an insurer or a bank, you can attempt to seek redress by approaching Financial Industry Disputes Resolution Centre Ltd (FIDReC).
FIDReC is an independent and impartial institution specialising in the resolution of disputes between financial institutions and consumers.
It provides an independent and affordable avenue for resolving disputes across the financial sector in Singapore, without having to engage a lawyer.
Note that FIDReC’s ruling is binding on the financial institution, i.e., if FIDReC rules that the financial institution has to compensate you, this decision has to be adhered to. However should you, the consumer, be unhappy with the ruling, you are free to reject the decision and pursue your complaint through other avenues, such as hiring your own lawyers.
What this means is that there is no disadvantage at all for you if you choose to take your case up with FIDReC.
Here’s a personal experience of how I worked with Fidrec to reverse a decision that I felt was unfair to me.
Before I end off, allow me to reiterate the importance of discerning fact from opinion in our daily lives. Let’s strive to always understand the truth, because the truth will set you free. You’ll be thankful you did.
This article originally appeared on Seng Bingyang’s blog and has been republished here with permission.