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Claim Denied? Understanding and Overcoming Repudiation in Employee Benefits

27 July 2023 Momentum Corporate
Shameer Chothia

Shameer Chothia

Senior Consultant Momentum Corporate (Advice and Administration), Shameer Chothia outlines the whole truth behind repudiation in employee benefits, arming employees with the knowledge to safeguard their loved ones.

Having a financial safety net in place through employee benefits can provide some much-needed reassurance that you and your family are protected if the worst happens. But, did you know there’s more to consider when looking into employee benefit plans other than what is offered?

What if your claims are deemed invalid? We call this repudiation and it’s critical that every employee gets to grips with it.

What is repudiation
Repudiation means rejecting a claim that an employee has submitted to receive coverage from their benefits plan. This is an important concept to understand when it comes to protecting yourself financially, especially in desperate economic times.

An unexpected medical or life event could leave you with a significant financial burden without proper coverage. It's crucial to know your rights and understand the terms of your benefits to avoid any potential rejected claims or disputes with your insurance providers. So, keep an eye out for any clauses within your benefits plan that have to do with repudiation, and make sure you fully understand what they mean.

Common reasons for repudiation
Nobody wants to be caught off guard when it comes to their insurance policies, especially if they expected to receive a payout for a critical illness, retirement, or life insurance claim. Unfortunately, there are a handful of reasons why your insurer may choose to deny your claim.

Some examples include providing misleading information when applying for coverage, failing to disclose pre-existing medical conditions, or engaging in a dangerous activity that was not disclosed in your policy. Even worse, your employer could have reneged on the contract or mislead you as to the extent of your benefits package.

It's important to understand these common reasons for repudiation, so you can take the necessary steps to prevent them from happening. By being honest and thorough when filling out your insurance application, you can help ensure you're covered when needed.

Knowing your rights as an employee
Considering the legal and contractual nature of this process, it's important to know your rights as an employee, especially when it comes to your benefits. You work hard for them, so it's only fair that they're given to you. But what happens when you believe they've been wrongfully denied?

Well, the first thing you should do is gather evidence to support your claim. This could include emails, payslips or any other documentation that prove you're entitled to your benefits. Next, you should contact your HR department or manager to discuss the issue. If your concerns are still not addressed, you can take matters further by filing a complaint with the relevant authority or seeking legal advice. Remember, you have the right to fair treatment in the workplace, so don't be afraid to stand up for yourself.

Having said that, I can guarantee you that the insurance company wants to pay out all valid claims, so get in touch with your insurer to help you solidify the requirements for validity – they will be sure to provide you with all the information you need.

Tips for avoiding repudiation
Fortunately, there are some simple steps you can take to avoid this. Firstly, make sure you understand the benefits you're entitled to and read through your employment contract thoroughly.

Secondly, be vigilant about keeping your documents in order and up to date. This includes any medical certificates, disability claims, or insurance policies you may have.

Lastly, don't be afraid to seek legal advice if your employer does not honour their responsibilities towards you.

Being proactive and informed can safeguard yourself and your loved ones from any unpleasant surprises.

Knowledge is power
Unfortunately, repudiation is a situation that can easily arise in business or personal dealings. That’s why it’s so important to know what repudiation means, how to identify it, and what to do about it. Armed with this knowledge, you can save yourself a lot of time, money, and hassle in the long run. Don’t let the fear or ignorance of repudiation hold you back from making smart decisions. Instead, empower yourself and know your rights and obligations in any contractual relationship.

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