Q: I am currently working for the Ministry of Health. I took an insurance policy from an insurance company. Now I want to leave Saudi Arabia for good. When I applied for cancelation of my policy and refund of premium due to me, I was surprised to get the less amount of premium than expected. A: Most of the insurer's apply short period rates for mid-term cancellation of the policies. This clause is present in almost all the policies of major insurers. Whenever you cancel your policy mid-term then the premium retention will be calculated at a higher rate. Suppose your policy is valid for one week then one month premium is deducted. If the policy validity is one month then at least three months premium is deducted. If your policy is valid for eight months then you may not get any refund. Q: We have a Personal Accident policy for our staff based on their wages. I found that in the policy there is an accumulation limit of SR 2,000,000. When I checked with insurance company they said that they will not pay more than SR2 million in case of death of all staff in accident. They are charging us on the higher amount and limiting the cover to lesser amount. Can you clarify? A: The intention of the Personal Accident policy is to cover death, disability and medical expenses benefit. The accumulation limit as per your policy is for conveyance only. If the policy has a conveyance accumulation limit then it is valid. The intention is to restrict the travel by a single conveyance like aircraft or motor vehicle. Suppose one of your managers is insured for 5,00,000, then four similar ranking managers can be covered by a single conveyance. If more people travel by a single conveyance and meet with an accident and all die, then the insurance will not pay more than SR 2,000,000. But in other cases the insurance company will be liable for full limit. * Shujaath Ahmed Khan, an M.B.A., General Manager, Creative Associates is also a consultant and an expert in Insurance, Investments and Real Estate. He can be contacted at [email protected], website-www.creativeassociates.blogspot.com __
