CMFAS HI Common Policy Provisions question: individual Disability Income Insurance policy

CMFAS HICommon Policy Provisions

Mr Sim has an individual Disability Income Insurance policy that is conditionally renewable, stating it will renew until he reaches age 65. He turns 65 while a valid disability claim is already being paid. What is the position?

A The insurer may decline renewal at 65, but must keep paying the valid claim already in payment
B The insurer cannot decline renewal at 65, because age is treated as a health-related condition
C The insurer may decline renewal and may also stop paying the existing claim from age 65
D The insurer must renew, because a conditionally renewable policy can never be declined

Show the answer and explanation

Answer: A. The insurer may decline renewal at 65, but must keep paying the valid claim already in payment

Age is a permitted (health-neutral) non-renewal condition, so the insurer may decline renewal at 65. However, a claim that is valid and payable at the time premium falls due is protected — the insurer may not undermine it by electing not to renew.

Common mistake

Age is not a health condition, so non-renewal at 65 is allowed; but the in-force valid claim must still be paid.

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Original study material mapped to the public CMFAS HI syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.