Claim Time? Who will, and who will not pay?
There is one critical service from advisers where they excel beyond all others. This is when the time comes to claim on your insurance cover.
Many times, I have met with folks who have bought insurance without the support of a passionate quality adviser and most times this is during a period of high stress as a result of bereavement or poor health due to an accident or illness. They’ve usually just been told they cannot be paid. Becasue they had no adviser involved, they are forced to deal with call centre staff with whom they have no trusted relationship.
Valid claims should always be paid, but sometimes this only occurs by getting the right advice before submitting the claim. The support of a professional adviser is crucial at this stage of the process.
Even more important however, is to commence cover with the right product from the start. We advisers know the good from the bad insurers, experience teaches us this. We also know the red flags to look out for when preparing claim forms for submission to the claims managers of the insurer. Our knowledge reduces the risk you take as a client by trying to do this unassisted. Further, our involvement removes the stress of this process and allows you to concentrate on more important issues such as the needs of the family at this juncture. We are also far more likely to get the claim paid faster so that bills can be paid and the family burden can be lifted.
We do not accept the verdict of the insurer if we believe a valid claim exists. We also represent a significant number of clients and the insurers know this. One unhappy client is not as much of a problem as one adviser who may represent 300 clients.
The Australian Securities and Investments Commission’s (ASIC) Life Insurance Claims report, released in October 2016, found that there are higher denial rates with direct and group insurance policies offered by super funds, compared to policies sold through advisers. This should not come as a surprise.
Clients with advisers are not alone in their hour of need. The adviser is there to help them submit their claim and to follow through to the point where the claim finally gets accepted and the payment is made to the client.
This is not to say that there will be no delays or issues with the claim. However, any issues can be addressed by the adviser without adding to the stress levels of an already stressful situation. On the opposite side of the argument, those without adviser support are unlikely to get this type of support dealing direct or with group insurers.
One of the reasons a claim could run into issues could and does typically stem back to the selection of the insurance product in the first instance. Hence, making a claim a much smoother or more difficult process depending on the product selected. Using the services of a quality adviser is paramount, because the key value of taking out insurance is getting the claim paid. Otherwise why bother with it? Advisers typically only deal with insurers where there is underwriting before the commencement of the policy. This means no nasty surprises at claim time because the client did not disclose something that is now considered relevant given that the insurer is fully aware of the circumstances involved with the claim.
While getting “covered” without medical might seem an easier route to obtaining cover, in the long term you might be funding premiums to a policy which will not pay out due to a pre-existing condition contained in the small print that was missed by the client when completing the application for cover. This is particularly prevalent when dealing with the direct insurers. There is a much higher percentage of complaints and declined claims: 12 per cent compared to 7 per cent.
Advisers that add the most value with claims commonly have the attributes of persistence, good product knowledge and experience.
Adapted from an article written by Clive Levinthal who is chief executive officer of Experien Insurance Services