"It won't happen to me." This is one of the key reasons why people do not take out protection, and w...
"It won't happen to me." This is one of the key reasons why people do not take out protection, and why life cover, critical illness and income protection products are sold rather than bought.
The claim will take place at what is undoubtedly an emotional and stressful time for the policyholder and it is essential that the claims process is speedy, efficient and above all, causes as little inconvenience as possible for the claimant and their family. It is inevitable that claims will sometimes be turned down, but the two main reasons have nothing to do with companies hiding behind definitions. The first occurs when the claimant does not actually have the condition they are claiming under.
For example, on critical illness policies, chest pain caused by angina might be distressing and it might also be an early warning of a possible heart attack some time in the future but it is not a heart attack and therefore would not be a valid claim.
The second significant reason why claims are turned down is non-disclosure. If someone applies for a protection product knowing that they are ill or suspecting that they are sick, then they are breaking their duty to inform the insurance company of material facts which could be used in the underwriting of the risk. Failure to disclose these facts can invalidate claims.
This is where an IFA's advice is essential in ensuring that the customer writes down all material facts when they apply. Application forms always highlight the importance answering all the questions truthfully, stressing that if the applicant should disclose everything, whether they think it is relevant or not.
So what happens during a claim and how can IFAs, their clients and providers help speed up the process? Again, with their IFA's advice, they can avoid making claims which are clearly not valid in the first place, such as the aforementioned broken limb TPD claim. Most companies now have customer helplines that will guide policyholders through the claims process.
It is best to inform the insurer of the claim, or potential claim, as soon as possible. The next step is to obtain the company's claim form and carefully read the questions. Ensuring that all the information requested is actually submitted will make the processing of the claim much easier for the assessor and there should be no unnecessary hold ups.
The questions on claim forms are designed to get the necessary information from the policyholder, who should be as thorough as possible in supplying information about their condition, including full diagnosis, names and quantities of any medication. Giving the names and addresses of any doctors or specialists that they have consulted will also speed up the information gathering process.
The worst scenario for a claims assessor is a poorly completed claim form that refers to vague symptoms or non-specific conditions. This means that the company must enter further dialogue with the claimant or their medical advisers which can lead to lengthy delays. After receiving the claim form, the provider will get a report from the claimant's General Practitioner (GP) to confirm their condition or to determine when a condition was initially diagnosed. It is usually at this stage that consultations and diagnosis dates can be checked against those disclosed on the original application. This is when cases of non-disclosure come to light.
Unfortunately, insurers must rely on medical specialists and GPs for evidence. With the strain on today's health service, completing forms is rarely a priority for doctors. A little gentle prompting from the claimant can help to speed up this process, so it is vital for the provider and the claimant to keep each other up to date.
In some cases, especially if the degree of disability is difficult to measure, the policyholder will be asked to see an independent specialist for a further opinion. This will involve attending an examination with a qualified specialist of the insurer's choice. The cost of this will be met by the insurer.
Once all the evidence is gathered together, the claims assessor will make a decision on the case.
Roger Edwards is product marketing manager at Scottish Provident
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