Why It’s Important To Let Your Insurer Know When Changing Jobs

We never hear about all the claims life insurers pay, we only hear about the ones they don’t pay! “Bud, did you hear about Robbie, he was involved in that accident a month ago, and it looks like the insurance company isn’t going to pay him out. Daylight robbery if you ask me! You pay and pay and the day you need them, they turn around and snub you!”

The truth of the matter is that insurers do pay, they just don’t pay invalid claims. That’s why it’s so critical that you know what your obligations are, as a policyholder.

In this article, we’ll take a closer look at your obligation, as a policyholder – that you need to let your life insurer know when you change jobs and specifically when the nature of your occupation differs.

But why does it matter what you do for a living?

What you do for a living actually does matter to your life insurer because different occupations carry varying degrees of risk. Someone working behind a desk in an office environment, for eight hours a day, is less likely to become disabled than a sales representative who is in his car all day calling on clients and navigating our treacherous roads. You agree?

And insurance rates (premiums) are always based on risk. The more risk the insurer takes on, the more they charge. So if you put down on paper, at disability insurance application stage, that you work behind a desk in an admin role, and at claim stage your life insurer finds out you’ve been rolling around Joburg as a sales rep for the last few years, you can understand they might be a little peeved! And they have good reason to be peeved because you didn’t disclose this new information to them and, as a result, you haven’t been paying the correct premiums for your disability cover.

Insurance is simply a transfer of risk. You run the risk of becoming permanently disabled and unable to work. You hand that risk over to the insurer who charges you a premium to carry that risk. The greater the risk the higher the charge, and if you don’t let the insurer know you are at a higher risk they can’t charge you appropriately and that’s not part of the contract you entered into.

This is what you need to remember - as a policy holder you are obliged to let your life insurer know when your occupation changes or the duties of your current occupation change (that’s the time spent doing different activities during the day).

If you’ve got a disability product in place and you change your occupation or your daily activities change, get in touch with your insurer and check the detail you put down on that application form. It could mean the difference between a pay-out or a repudiated claim.

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The I-Hound