Martin Lee @ Sg
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Can an Insurance Company Change Terms and Conditions?

There was an interesting article in yesterday’s newspaper in which a person questioned whether an insurance company had the right to impose additional terms on an existing policy.

For this particular case, the person’ Jerry had a son who was diagnosed with hearing loss after he had already bought some insurance policies for him.

When he tried to make a claim and was unsuccessful, he was informed that there would be exclusions added onto the policies.

Anyone who reads Jerry’s account will probably be sympathetic towards his cause.

I do not know enough about his case to answer all of Jerry’s questions. But I do have the following comments to make:

  • Usually, extra conditions might be added onto a policy if an insurer discovers that there was material non-disclosure during the application stage. An insurer could also decide to terminate and void a policy if there was non-disclosure.
  • Most policies will have a clause to exclude pre-existing conditions (whether or not you declared them during the application stage). In some cases, you might not be aware of a pre-existing condition but if the signs and symptoms of the condition were already present, it could still be considered as a pre-existing condition by the insurer.
  • A person with hearing loss would definitely be considered at a higher risk for accidents. He or she will be less aware of the surroundings and might not be aware to react to warnings. Eg car sounding a horn.
  • It is important to get insurance cover (especially those covering hospitalization) from an early age before any health conditions occur. If you wait until they occur, they will become excluded from cover.
  • However, when it comes to congenital conditions (pre-existing conditions from birth), there are not many ways you can get coverage for it. As it is not really a person’s fault in not getting insurance early, I feel that the State should address this portion.
  • Insurance plans are divided into two categories: life and general insurance. For general insurance plans that are renewed annually, most of the time, you do run the risk of the terms and conditions changing upon renewal every year.

Let’s see how Jerry’s insurance company responds.

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2 comments
john says 6 years ago

can an insurance company arbitrarily change your policy profile, i.e reduce/change/exclude original benefit?

Reply
    Martin Lee says 6 years ago

    Dear John, in my post, I have highlighted specifically a few situations where it might be possible. Non-disclosure being one of them. At the end of the day, an insurance policy is a contract between two parties. If the contract wording allows for it, then it is possible. Another wording that is common could be that premiums (chargeable) are non-guaranteed.

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