So we're having an interesting discussion about our benefits here at work.
The question came up about what "Evidence of Insurability" really means.
Background: our group insurance company (Sun Life) is offering Critical Illness Insurance without "evidence of insurability" up to a certain amount $25K. The disclaimer is that should a critical illness present itself within the first 12 months of coverage starting, no benefits would be paid.
This concept, we understand. Assuming the premium to buy this coverage is worth it, the debate is the following:
Say 15 months down the road, after the 12 month period has elapsed, someone get's diagnosed with a critical illness, some of my co-workers believe that the insurance company will pull all strings to show that there was some underlying condition that occurred within the first 12 months that could have caused the critical illness.
But my argument is, say someone is freshly diagnosed with a critical illness in that 15th month (like cancer or something), for which there was no medical evidence for before - should that even be an issue.
I guess they're just thinking it might be a too good to be true offer.
Any insurance experts to chime in?
THIS IS THE DISCLAIMER:
*** For any coverage that did not require evidence of insurability ($50,000 or less, and/or any
dependent child coverage), no benefit is payable for any covered condition that occurs within
12 months after the effective date of the insured person’s coverage, and that resulted from
any injury, sickness or medical condition (whether or not diagnosed) for which, during the 12
months prior to the effective date of insurance, the insured person:
• had symptoms
• consulted a physician or other health care practitioner, or
• was provided any health-related care, advice or treatment, or that a reasonably prudent
person, with such injury, sickness or medical condition, would have consulted a physician or
any other health care practitioner.
This is all pretty standard, including the 12 month waiting period, the Non-Evidence Maximum (NEM), and the requirement to fill out an Evidence of Insurability form. The idea of the Evidence of Insurability form is simply to get you to answer as many questions as possible about your history and lifestyle. The insurance company isn't really interested in what you answered on the form until you have a claim. Then they will go over it with a fine-tooth comb and look for any slight falsehood or inaccuracy as a basis for denying your claim. The more things they ask, the more difficult it is to dig up accurate answers, and the more intrusive and embarrassing they can make the questions, the greater the chance that you will fib or get something slightly wrong.
Hi There,
I've been a licensed insurance broker for a number of years now and have much experience dealing with group and individual plans.
What I'm picking up from the questions is that you want a reasonable level of certainty that if you were to claim at some point in the not-so-distant future, can the claim be denied.
The simple answer is YES! Your claim can ALWAYS be denied when you do not have an actual policy contract! The other poster is correct in regards to creditor insurance and mortgage insurance...the same is true for group insurance. You are not the policy owner and you won't have a policy contract (which is a legally binding contract, underwritten and approved prior to the commencement of coverage).
I represent insurance companies and use their products each day and they are in the business of making money and will avoid a claim however they can. That being said...Group insurance (critical illness included) is good but it should not be primary instrument for proper risk management.
That's my 2 cents. I hope that it helps.
If you ever have any other questions and want unbiased advice, feel free to submit a question to www.canadianlifequotes.com/contact
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