I guess there are times in life when a “thumb-suck” might be an appropriate answer but filling in an application for insurance is not one of them.
Had 2 interesting cases recently which again highlight the importance of full disclosure when applying for any form of insurance. The first one emerged when we were reviewing an existing policy for a client that was done through a previous advisor. The issue revolved around her income and occupation which was clearly not correct. When completing an occupation form with her we asked her more about her occupation and her income and how the previous information was arrived at. Her reply? “My broker told me to give him a thumb-suck!” This was clearly not correct and we pointed out the danger of this kind of approach to her – would she like the insurance company to do a thumb-suck when assessing her claim?
The second case had to do with a client applying for some income replacement cover and in the application process it emerged that although she did not currently have a sore back, she was seeing a physio for treatment (mainly preventative in her words). She was reluctant to disclose this on the application form (for risk of a back exclusion and had apparently even been advised by her physio not to disclose this). We pointed out the risk to her in that if she failed to disclose it and it later emerged at claim stage that she had been seeing the physio, then the company could be within their rights to repudiate any claim. In the end she disclosed, the company called for x-rays and as a result of the x-rays which showed a degenerative disc, the cover was granted with an exclusion on it.
While this might seem unfair and harsh on the part of the company, at least she knows where she stands, what is not covered and that at claims stage there will be nothing that she has tried to hide.
You cant afford to thumb-suck when it comes to filling in insurance forms – you don’t get a second chance to become disabled or contract a severe illness!
