Who is being served?

No, not are you being served, who is being served?

Monday, August 27th 2018, 8:30AM

by Jon-Paul Hale

Looking around at a few cases in the last couple of weeks, the "who is being served" question has been brought into tight focus.

I talked about research and the six-step process in the last couple of posts, and this ties in with that. So bear with me.

As we go about our daily grind, we humans have some underlying programming to guide us to take the easy path.

It's in our DNA. It is about energy consumption and preserving brain cycles, in the time between eating and sustenance.

We can't unwind thousands of years of basic programming in a few decades, so we need to be aware of it.

For us directly, it's about taking the simpler path and our DNA drives us to. And people can prey on that unconscious bias for their own gain.

We see it every day with clients saying "So what would you do?". Which is why you walk away with the sale looking like the answer you gave, it's easy to delegate critical thinking. Especially to someone who looks like they know what they are doing.

Where am I going with this?

Insurance companies. In the last little while, we have seen the rise of no underwriting products into the mainstream benefits we use.

They sound simple enough, we do the advice piece, and we get to hand the whole underwriting piece to the insurer, and get on with the next client.

Justified because the insurer will underwrite at claim anyway, so why not do that for everything? And based on our DNA, that decision makes a lot of sense.

However, our modern world is built to exploit our DNA not to work with it. And that is the challenge.

In the last few weeks, this has come into sharp focus with a client of mine, and a client of a colleague, finding out that their supposed benign skin cancers weren't so benign. In fact, they were melanoma's, and they had not been told.

Now in the course of things underwrite and move on right? Not so much. These were both replacement cases where the client had existing trauma cover at the time of the melanoma.

So back to the old insurer to follow up claims. In the case of mine it turned out to be a problem with the medical records, it looked like melanoma but wasn't one. So we're looking at benign skin cancer exclusions on the additional medical and none on the new trauma. Good to know.

For the other case, the answer is not so great as it was a Clark level 3 melanoma. Upside, it was dealt with, and they're ok, but they never benefited from the trauma cover they have. So it very much looks like they are going to have a trauma claim paid.

The issue, if either of us had used a non-underwritten process to review the cover for these clients, we would not have found the medical history, and potentially the clients would have let go of cover that they could have claimed on there and then.

Added to that, on their new covers they would have potentially had exclusions on new claims due to the past medical history, mine not quite so much but my colleagues definitely.

As it has turned out for my client, manageable. For my colleague, it could have been a significant professional complaint down the track.

Just like we have issues with claim underwritten medical, the newer claim underwritten life products have some significant challenges, particularly if you are replacing existing benefits that have been underwritten.

And while some of these providers have given the direction not to use these products for replacement, we know things still happen that shouldn't.

So be careful in your execution of new cover with these products, especially if you have existing benefits in play and they are likely to be replaced.

Tags: Jon-Paul Hale