What is meant by ‘standard terms’ (for insurance)?

A few of my clients told me they have pre-existing illnesses. They wanted to buy product X. I told them that if the insurer remains silent, it is excluded because the standard contract says so. So they went ahead with the transaction (their agents). The underwriting was quite smooth. The premium was accepted and the policy issued at ‘standard terms’.

I told them that based on ‘standard terms’, their condition are already excluded. So they were unhappy and asked their agents to tell them whether their illnesses were excluded or not. Unbelievably their agents told them verbally that their conditions are NOT excluded. When pressed to do so in writing, their agents reply in email that their policy was issued as ‘standard terms.’ They did not say that condition was covered or excluded.

This is how agents harmed their clients. They say one thing but refuse to write in writing. In black and white, they know how to protect themselves by saying that the policy was issued as ‘standard terms.’

Last week I met one of this client who showed me the policy document. I flip to the page of the policy and it says that ALL pre-existing conditions are excluded. I told her – this is the standard terms. She was shocked but as usual say that her agent told her otherwise. She showed me the email. The email from the agent said, “The policy was issued as standard terms.”

My advice to people is this. You need to educate yourself financially. If you need to rely on professional help, you must engage someone who does not play around with words.

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