I am based in Dubai, United Arab Emirates.
I had taken an Involuntary Loss of Employment (ILOE) policy in September 2016 which entitled me to 6 months salary (in case of job loss) capped at AED 50k per month (AED 300k). In March 2017 I received an advice from the insurance company that the cover has been reduced from AED 300k to AED 150k and the terms and conditions are revised. A link to the revised 12 pages of conditions in small print was provided which I didn’t read.
I lost my job end-October 2017 and when I claimed, I was advised that the maximum payout would be AED 37.5k (25 percent of the sum insured) due to one clause in the terms and conditions as reflected below.
The benefit payment terminates at the earliest of the following dates:
When the Individual Covered visa is cancelled and/or he leaves the country. If his job is terminated but visa not cancelled and he continues to remain in the country, the benefit payable is only for a maximum of 3 months or 25percent of the total Sum Covered only in case of 6 months indemnity (i.e. total benefit amount per individual) whichever is less.
As per the above clause, if the insured left the country then the payout is nil. If he remains in the country, then the payout is capped at 25percent. Therefore, under no circumstances can the insured get the full insured amount.
My question is whether such a clause in the T&C of a policy tenable - i.e. the T&C state only 25 percent of the policy value is payable. What is the point of issuing a policy of AED150k if the maximum payout was only AED37.5k?
The following example will demonstrate the issue. Suppose a condition is introduced in a car insurance policy whereby in case of total loss, the payment is capped at 25 percent if at the time of accident the car has 4 black tyres. As cars always have black tyres and therefore the payment will never be more than 25 percent.
I had taken an Involuntary Loss of Employment (ILOE) policy in September 2016 which entitled me to 6 months salary (in case of job loss) capped at AED 50k per month (AED 300k). In March 2017 I received an advice from the insurance company that the cover has been reduced from AED 300k to AED 150k and the terms and conditions are revised. A link to the revised 12 pages of conditions in small print was provided which I didn’t read.
I lost my job end-October 2017 and when I claimed, I was advised that the maximum payout would be AED 37.5k (25 percent of the sum insured) due to one clause in the terms and conditions as reflected below.
The benefit payment terminates at the earliest of the following dates:
When the Individual Covered visa is cancelled and/or he leaves the country. If his job is terminated but visa not cancelled and he continues to remain in the country, the benefit payable is only for a maximum of 3 months or 25percent of the total Sum Covered only in case of 6 months indemnity (i.e. total benefit amount per individual) whichever is less.
As per the above clause, if the insured left the country then the payout is nil. If he remains in the country, then the payout is capped at 25percent. Therefore, under no circumstances can the insured get the full insured amount.
My question is whether such a clause in the T&C of a policy tenable - i.e. the T&C state only 25 percent of the policy value is payable. What is the point of issuing a policy of AED150k if the maximum payout was only AED37.5k?
The following example will demonstrate the issue. Suppose a condition is introduced in a car insurance policy whereby in case of total loss, the payment is capped at 25 percent if at the time of accident the car has 4 black tyres. As cars always have black tyres and therefore the payment will never be more than 25 percent.
