Right oh, if you are reading this from the perspective of trying to claim, we might be a bit shutting the gate after the horse has bolted. Though there may still be things we can do, so do check out our claims advocation service. Where we can we help people get the support they need from what is available.
For those who are looking for life insurance and wanting to find the best deal on life insurance, this is the starting point. Knowing what you don’t know that can hurt you.
The best deal in life insurance is a policy that responds and works when it is needed, not the premium you pay. Because paying a cheap premium doesn’t necessarily mean you have the right cover. Nor does it guarantee you put it in place correctly.
The right cover:
Now I know there’s plenty of don’t sell me anything and don’t talk to an adviser they’ll sell you something you don’t want. Frankly, while there are situations like that, we don’t work like that.
No, we’re worse, we’ll take your situation and scare the bejesus out of you with your own reality. Sorry, salespeople pftt! They’ll sell you something, we’ll advise on the reality, and unfortunately for many, the reality isn’t so pretty.
Not to worry, we have an in-house rule, we only implement cover once we have a clear understanding our client knows and understands what they are making a decision about, and we have explicit permission to proceed. We want to know that you understand what we are doing for you.
With Willowgrove Consulting you will end up with the cover you need, you have decided on, and what you consider the most appropriate for you. And if you don’t like it, we’ll help you make it right.
Now that’s not to say we’ll agree with every decision you make (usually to under insure) at the same time we will work damn hard to ensure you have the right cover for the risk you want covering.
And when it comes to claims, that last statement is the key one. If you don’t have the right cover for the situation, you need the support for, no matter how good the broker, adviser, claims manager or insurer is if the policy doesn’t cover it no claim will get paid.
Underwriting and disclosure, of everything you do this piece, is the piece you have control over, second to deciding what cover you want. If you are not upfront about your medical, financial, and occupational situation, you will have trouble at claim time.
Insurance is based on a contract of good faith, good faith that you have told the truth to the best of your knowledge, and the insurer in the handling and management of your policy.
In the New Zealand market, we don’t have any particular insurer that is more difficult to deal with at claim time than any other, in terms of the decisions made. What is difficult with some is their level of communication and service alongside their policies.
We hear many stories of insurer X is a pain in the arse, and we don’t want to be there while hearing insurer X is awesome from the next client. This is usually driven by a bunch of reasons; usually, our first point, get the right cover, and this point, be truthful with the insurer.
We are yet to see an insurer, with all the information, decline a valid claim they should have paid. Yes, we have seen many insurers backtrack decline decisions with additional information, and even some that had still paid when they shouldn’t have when the insurer was knowingly lied to by people around the claimant and the insurer knew about it.
So when you hear a story about an insurance claim being declined, ask a few more questions. Because the insurer is an arseh%&e, isn’t a reason, that is an opinion. The why of the situation is the real reason, and it comes back to the two points of right cover and right disclosure.
Disclosure, how much and what should you be doing:
We have had some recent high profile cases where the insurer has declined to cover claims, in all of them, we have seen, the reason for the decline was non-disclosure of information that the client should have been aware of.
Now to say an appendix out 20 years ago was the problem for travel insurance is potentially a stretch that wouldn’t fly in a reasonableness test. Adhesions and scar tissue that was causing abdominal pain before getting on the plane is quite a different story and is one that the client should be aware of, and should be disclosing.
And it is this understanding about disclosure that the general public is struggling with. Yes, the appendix out should have been disclosed. But in reality, every underwriter, if there have not been symptoms in the 20 years since, will take a look at it and go tick, sorted and not ongoing, not likely to be a problem and move on without excluding it.
It’s when there are symptoms that have been noted that haven’t had a clear answer that start to cause issues. Many people have been to the Dr and said, this hurts. The Dr says I think it’s this, take this if it doesn’t resolve in a few days to a week come back.
And then nothing. Did this condition resolve itself, or was there ongoing for a time. Did the Dr follow it up or was it left to fester?
It is these situations that cause all manner of issues with claims, especially when there are multiple notes for similar but slightly different symptoms in peoples medical notes.
So when it comes to disclosure, you are better to say I think there was something rather than not say anything at all. I think I had xyz, but it’s not been a problem for years, is far better than taking the stance of I think I had something, but it’s resolved so I won’t bother. The later could come back and bite you.
We once had a client submit an application with every box ticked and every page filled in and then some, with about 100 pages of medical notes. The existing cover had some severe exclusions we didn’t think were fair nor should apply.
Yes, the client was looking at us sideways saying, you sure about this, there’s a lot of information there? We said, hold my beer!
The result, we ended up with a single exclusion. While there was plenty of medical history, there wasn’t anything outside an operation on a knee that was ongoing and not resolved.
This is our point, disclose everything you can to the best of your knowledge, this puts the underwriter on notice for the issues, and they can then decide if they are going to cover them, and often they are quite fine with the disclosure and don’t exclude things if they have resolved.
It also means if the underwriter needs more information they can ask and you have discharged your obligations of good faith.
Additional to this you can also submit a copy of your medical notes if you have them. The insurance companies only ask for medical records if they need them.
They will not ask for them because you said they should get them. This is for a couple of reasons.
- They have to pay the Dr’s for them, so the more they ask for, the more costs they experience. This translates straight to higher premiums for you, so they try and manage this as best they can.
- The second and more significant, back in 2009 the Privacy Commissioner of the time rules that insurance companies were not allowed to ask for clients medical notes unless they had a specific reason to do so. They couldn’t request the whole file, and they had to limit their request to the matter they needed information for.
So if you are relying on the insurance company to request your medical notes to cover your non-disclosure or missed information, That’s not going to work, and it is the government’s fault, not the insurers.
Clearly, this has implications for you the policyholder in a negative way, if you don’t like it, please have a read and respond to the privacy commissioner here.
In our experience, no one has been overly concerned about their medical information being available to an insurer. If you feel your medical notes are necessary for your insurer to get it right, by all means, request them from your Dr and submit them with your application form. You have the right to request them under the privacy act, they are your notes.
But don’t tell the Dr they are for insurance purposes, as they will either refuse on the basis they want the insurer to request them (so they get paid), or they will want you to pay for them.
Either way, we feel the current environment is weighted in favour of the medical profession to limit the work they have to do and ensure they get paid more for doing it than it is about insurers trying to avoid claims.
Clients, advisers, and insurers are not being served well with the current privacy rules in place. And the only people that can lobby this change is the public, as the medical and insurance industries are seen to have too much interest in the conversation to be seen as unbiased.
So you now have your cover:
From this point, if the above has been done well, you now have the protection you can rely on. Ensure the premium is paid and when a claimable situation comes up, you should have no trouble with the claim process.
However, if you are claiming, get your adviser involved, they should be helping you manage this so you can focus on getting well and recovering.
Which is to say, one of your questions right at the start should be, Mr/Mrs Adviser, do you manage the claims for your clients directly? If not why not?
We get involved with claims, we want to ensure that the promises made about your coverage happen as they were intended.
Then make your decision about who your adviser is.
The claim process:
Well, I haven’t talked much about that, because that’s what your adviser is also for.
To sum it up, the claim process:
- Have an event
- Call your adviser; hopefully you have someone like us ;)
And yes, the claim does start with the advice and the application form, not the event that is claimable.