Things advisers should be doing at claim time
It pays to be involved with clients at claim time and understand your policy wordings; I have been astounded over the years, despite product accreditation, about the number of advisers that just don't know their policy wordings. We need to do better.
Tuesday, March 28th 2023, 9:05AM 
4 Comments
by Jon-Paul Hale
A recent client claim, where two events resulted in two claims paid, was initially seen by the insurer as a single event and single claim.
The difference in operating procedures for the claims team and the insurer differed from the actual policy wording.
How many multiple-event claims have you had where the insurer has said one event and one claim?
Just because the insurer has said no, doesn't mean they have it right.
(Claims teams do get it right most of the time; I'm not throwing general stones here.)
I continue to see these examples in the market and continue to be a pain in the arse on this stuff, as I win far more than I lose.
However, all of this starts with being specific about what you are working with:
- The right understanding of the client's situation
- The application of the right products and benefits
- The appropriate management of the application and disclosure processes
- The ongoing management of the client's coverage with life and changes
- Managing the claims as they happen.
That last point is lacking with many advisers; it's a critical part of our job.
- It not only delivers on the promise you have made with your advice and the cover you arranged because some solutions are complicated.
- It also enables you to understand better how policies work and operate so that you can manage this better with your advice and product solutions.
Sure, we're not directly paid to manage claims, but we are paid to look after people and their policies, through renewals and service commissions, including claims.
It also sharpens your understanding of policies, so you know which ones to argue, which claims have benefits missed, and overall ensures that your client has the best possible support from you often when their life is completely falling apart.
- How many lumpsum claims have you missed telling the client they have legal and financial advice benefits available?
- How many clients have spent time in public hospitals, and you've missed they could have claimed on their medical cover?
- Are there home help benefits available? Is there a bonus or specific benefit available for that new claim?
- Have you explored a waiver claim because they can't work, which they have but don't have disability coverage?
That last one is saving one of my clients $600 per month in premiums for their life cover. They're ok with income, but they'd struggle with the insurance premiums on top.
As I'm writing this, I hear Steve Wright saying, "add the extra bits; it's good cover and additional premium" more the point; add waiver to everything; it's an excellent cover, underappreciated, and damn valuable when needed. (I had a waiver claim with my recent two-month recovery from Covid).
All of these nuances can make a massive difference in people's lives. Your people, your clients.
We can all do this thing a little better, and that starts with being really specific with our documentation.
The FMA has felt so strongly that it's a standard licence condition for everyone! ;)
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It reminds me of a client review where the previous adviser had pit in place cover for pregnancy complications, Sovereign’s children and maternity care cover at the time. However while the label on the front covered maternity-related conditions the policy wording excluded women who are over the age of 40, which has since been removed a few years later.
At the time this client had just turned 40 while being pregnant while buying trauma insurance and the adviser failed to provide the cover the client specifically asked for.
The underwriter in normal circumstances would exclude the existing pregnancy, but they didn’t apply and exclusion because it was already excluded by the policy Because the adviser didn’t understand the policy wording sold the policy as being a policy without exclusions.
I know, this is a technical aspect of policy advice and consideration at the same time we are expected to get the stuff right.
They say they are "not paid" to provide such service.
They recognize these clients are no longer able to buy additional or replacement cover, so have no further prospects.
But is that the expectation that was set by the adviser, when the advice was given? I submit that if you did not clearly and explicitly tell the client that your service to them would be limited in that way, before they made a decision on whether or not to follow your advice, then you have in one fell swoop breached Code Standards 1, 2, and 4.
I'm just gonna say it. Abandoning your clients when they claim is disgusting.
These advisers are scumbags.
The result is not only do we sort the issue, and not all are accepted and paid, but certainly better understood by the client, we get the review and update of the portfolio that usually results in more budget allocated to risk management.
Off that, we also get all their friends and family too. And it's loyal committed client's that result, the best sort for life advisory business. So a win for everyone!
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Especially feel the need to highlight this line from it:
"...delivers on the promise you have made with your advice"