To disclose or not to disclose

As a journalist in the insurance field I have written many articles on the importance of disclosing all relevant information when considering a new policy. I have implored clients to do so because (and I quote!) "this will ensure that at claims stage you

A true story
I applied for life assurance when I applied for a new bond. On the (good) advice of my financial adviser, I also applied for permanent disability cover on this policy. This was when things started (unexpectedly!) going wrong. I (obviously) followed my own advice and disclosed all relevant information when completing the application form, including the 20 light sedatives my general practitioner prescribed when I consulted her for a minor (and completely unrelated) ailment and she learnt that I was going through a traumatic experience. I explained the circumstances in the form and trusted that the (very good and all too common!) reason for this prescription would be taken into account.

My doctor, when she consequently received (among other forms) a mental health questionnaire, phoned me in astonishment and asked why on earth she would be sent this form as she did not have any indication of such problems in my file. I calmed her by telling her that I disclosed the 20 light sedatives she had prescribed earlier this year, as I believe that all relevant information should be disclosed. She, dubiously, completed the form mentioning that sheprescribed the sedatives to assist me during a stressful time (never mentioning anything about depression), that I did not even take half of these tablets, that I had never suffered from depression (replying to a direct question in this regard) and that, in her opinion, I would never suffer from it in future.

Surprise waiting
Great were our surprise (mine, my financial advisers and my GPs) when we were told that I would be completely excluded with regards to disability cover. When we requested a reason for this we were informed that a reason would be sent to my GP. I immediately alerted her to look out for this communication and made an appointment with her to discuss the situation and to solicit her assistance in fighting the decision. She soon received a fax stating that I was denied permanent disability cover because of the recent treatment I received for depression. I immediately thought that my doctor probably answered the questions unclearly of ambiguously, resulting in this strange decision. However, she had meticulously kept copies of all the forms she completed as well as all the reports she wrote. Not in any of these reports/forms did she mention anything about depression or any similar type of disorder. She immediately wrote a letter to the insurance company stating that in her opinion the decision was unfair and unreasonable and that it should be reconsidered. This letter was faxed to the insurancecompany but we were informed that they still stood by their initial decision as the reinsurer they referred the case to initially also agreed to the exclusion.

This was when I decided to take matters into my own hands. I spoke to the chief underwriter of the company in person and after explaining my unique situation to him (as I did previously to several other people in person and in writing) and faxing the letter written by my doctor (as I had done before) again, he reversed the original decision and I got my cover!

Eureka! But you might want to ask why am I still writing this article if I had already won my battle?

The facts
It is my opinion that never in the original decisionmaking process was the real and unique facts of my case taken into account, i.e. the decision that was taken was not a logical one by far. I know that most permanent disability claims stem from either depression or lower back problems. However, I did not suffer from one of these conditions! In addition, it is simply not logical let alone fair! - that people are excludedalmost automatically as soon as they had a brush with a temporarily stressful situation and received treatment for this without their personal circumstances being taken into account.

And although I was treated well by the insurance company in question and am extremely happy about the outcome of my problem (which is why I am not mentioning any names!), I wonder on what grounds this decision was reversed. The same facts still applied, the same information was still available.

Other clients
The next questions to be asked are these: How many clients does this kind of thing happen to? And how many of them question these decisions? How many financial advisers and doctors are prepared to help clients fight these decisions?

The answer is obvious. Most clients will simply accept such decisions, as they do not always have the knowledge and assistance to question these. They also do not have the benefit of being a journalist in the industry who is in an excellent position to write uncomfortable stories on the subject

My plea
I do understand that an insurance company needs to be put into a position where it can assess risk correctly, and that such insurers have the right to decided which risks are acceptable and which not. These companies should, however, take all relevant facts into account in context before taking decisions that could directly effect a clients cover and indirectly effect his or a her future insurability.

I still advocate full disclosure. However, I urge insurance companies to stop penalising people who do disclose fully and start treating each case on its own merits. In addition, if a decision seems questionable it is the duty of the financial services intermediary to assist his client in getting a fair decision.