Employee Benefits - The pitfalls - what you need to know…

We think we are automatically accepted for full life cover if we start a new job, but this is not the case if we have a pre-existing condition. Most insurers will exclude this condition for a period of 1 year. So if you have a condition when you start a new job please inform the broker and or HR of this, as your claim will not be paid if something happens.

The insurer will look at the following when assessing a claim:

Active at work – was the member active at work on the day that the group risk cover started? If not (was member on sick leave) then it’s likely that the claim won’t be paid. If the client was at work on the first of the month that the cover started, then a claim could certainly be considered.

Was the group risk scheme a transfer from another group risk scheme – most insurers backdate the pre-existing condition clause, which means that for a member that moved with the scheme and had been with the employer for a number of years, the pre-existing isn’t actually an issue. The concern here is which insurer would pay the claim – the insurer that the group left, or the insurer that the group moved to?

If there was no transfer, so the member just changed jobs or the scheme took out new group risk cover not having cover before, then it’s important to establish the exact wording of the pre-existing condition exclusion, and whether the member was aware of the condition prior to the cover starting or not. Importantly, a pre-existing condition is meant to catch people who have longstanding problems (e.g. heart problems, back problems etc.) who then intend claiming. For this type of scenario, it is an unfortunate matter of timing and not likely anti-selective on the claimant’s part as their intention was actually to secure employment and they were unaware of any condition being formally diagnosed. How to get through your self-payment gap Find out more by clicking on the link below. http://ow.ly/h5QY30pGyZH

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