Dubai: A 57-year-old Indian expat has cautioned residents against taking a job loss insurance policy without reading the small print, lest they feel “cheated” after paying a hefty premium.
The Dubai-based man said an insurance policy he bought in September 2016 covered him for involuntary loss of employment for a period of six months and was capped at Dh300,000.
Revised policy
He said in April 2017, he received an email from the company, informing him about a change in the policy’s terms, as per which the benefit was reduced to Dh150,000. He said the email also provided him with a link to a 12-page annexure which detailed the terms and conditions of the revised policy.
“I did not go into the details, but I verbally checked with the company on how the new terms would impact me. From what I was given to understand, the change had essentially halved the policy amount. Also, the monthly Dh1,500 I was paying towards a saving plan and the policy premium would continue, although the share towards the policy would increase.”
The man, who decided to continue with the policy, lost his job in October 2017. “But when I approached the insurance company for the promised payout, I had a rude shock when I was told the amount due to me was Dh37,500, or just 25 per cent of the promised Dh150,000.”
He said the company cited a clause from the 12-page annexure which stated that if an individual’s job is terminated but his visa is not cancelled and he remains in the country, the benefit payable is only for three months or 25 per cent of the total sum covered, whichever is less.”
“Can a clause hidden inside an annexure contradict the face of the policy? Shouldn’t such a condition be informed to the policyholder upfront?” he asked, alleging that it tantamounts to “misrepresentation”.This is unfair, unethical and demonstrates lack of good faith,” he added.
Company’s response
The insurance company in a statement to XPRESS said, “Generally, we have seen that the assured tends to get confused between the policy schedule and the terms of the policy and believes that the policy does not give a correct picture of the terms, which is an incorrect approach. The schedule merely identifies the nature of the policy, however, the terms clarify the rights of the assured and the insurer. It is clear that this client was well informed of the new terms. The assured is not forced to accept the terms of the insurance company and is at the liberty to cancel the policy. However, he decided to continue.”
The company said the man had also registered a complaint with the Insurance Authority.
“However, based on our clarifications on the terms of the policy, the Insurance Authority has accepted our position and decided to close the complaint in our favour,” it noted.
