The Advertising Regulatory Board has ordered Discovery to remove or amend advertising material for its severe illness benefit provided by its life insurance business, calling it misleading.
Last month the ARB also ordered the group to withdraw a misleading gap cover ad as it did not specifically clarify that there was a 12-month waiting period before its claimed maternity benefits kicked in.
In the latest instance, the ARB found in favour of complainant Ross Lazarus who took exception to Discovery’s advertising of its severe illness benefit, which stated that clients could “claim more than once”.
The suggestion that the company would pay multiple claims for severe illnesses “regardless of whether the dread diseases are related to the first claim or not” was untrue, given the policy’s limitations, found the ARB.
Discovery said the wording was not paid-for advertising, but marketing material posted on its website, reports News24.
Lazarus was diagnosed with Parkinson’s in 2020, which was upgraded to a category “Disability A” illness in 2022. After diagnosis, he received payment from Discovery for his severe illness, as well as overhead expenses benefit cover, which was paid for two years.
However, when he inquired whether a possible future diagnosis of dementia would also be covered under the severe illness benefits and overheads expenses benefits, he was told this was not possible as it was related to his current Parkinson’s diagnosis, for which he had already been fully compensated.
Lazarus argued he had been advised by a Discovery case manager that he would be covered for both a new and unrelated condition that rendered him unable to work.
Discovery’s response to the ARB was that it was not an insurance ombudsman, and it would therefore not delve into specifics around Lazarus’ claim. It also pointed out that various disclaimers appear across its website and advertising as per its product rules, terms and conditions.
The group also argued that all policy holders receive a Discovery Life Plan Guide, which explains the more intricate aspects of their policies. The main limitation argued by Discovery was that since compensation for the permanent and severe impact of Lazarus’ original Parkinson’s diagnosis, which is considered a neurological condition, a subsequent payment for a hypothetical neurological condition was not possible, as he had already been compensated.
While the ARB accepted that no reasonable person would expect an insurer to simply pay compensation for any and every claim it receives, it said promising customers they could claim multiple times, “regardless” of whether a new claim is related to a prior one, contradicts any notion of this limitation.
“It effectively invites customers to claim each time they receive a new dread disease diagnosis under the assumption that this new diagnosis will result in another form of compensation, even if the new diagnosis is related,” the ARB said of Discovery’s wording.
In contradiction to the ad, the ARB found there were circumstances in which policyholders would not be able to claim for a new dread disease diagnosis.
While it acknowledged this was a reasonable limitation, it did not correlate with Discovery’s invitation to clients to: “Claim more than once … regardless of whether the dread diseases are related to the first claim or not.”
It said Discovery’s advert “convey(s) a misleading impression” and should be removed or amended immediately. It also instructed its members not to accept adverts from Discovery under its severe illness benefit cover that invited clients to “claim more than once”.
Discovery told News24 that it would clarify the wording of its severe illness benefit on its website, but would maintain the essence of the “claim more than once” wording.
“Discovery Life’s severe illness benefit offer is unique in respect of paying multiple claims for related, non-progressive conditions. These subsequent qualifying claims can be of a higher, lower, or same severity,” the group said.
“In 2023, nearly 30% of all severe illness benefit claims were for a second or subsequent severe illness benefit claim, collectively valued at R416m. It is worth noting that our benefit guides contain clearly defined objective medical criteria, as well as graphical illustrations of the treatment of multiple unrelated, progressive, and non-progressive related claims.”
See more from MedicalBrief archives:
Discovery gap cover maternity ad ‘misleading’, says regulator
Discovery’s ‘chronic cover’ ad misleading, regulator finds
Discovery launches fund to boost screening and preventative healthcare