Life insurance news: What your clients need to know about claiming on their life insurance policies
By Etienne Fourie, BrightRock National Distribution Executive
The saying goes ‘the proof of the pudding is in the eating’, and this is particularly true when we speak of insurance policies. The proof of the product is when clients claim. This is the reason why they take out life insurance in the first place – so they can claim when they suffer a serious illness or injury, or when they pass away, and they want to ensure their loved ones are taken care of.
As a financial adviser, you understand how complex the claims process can be – this is when your clients rely on you to provide them with support as they navigate a challenging moment in their lives. Clients have many questions and concerns when it comes to claiming. We address some of those in this article.
It starts with providing accurate information at underwriting stage
The surest way for clients to ensure that they qualify for claims when they meet the necessary criteria is to supply the insurer with accurate information when they are being underwritten for their cover. Clients are asked about health (including family history), work, and lifestyle during underwriting. It’s essential that they share all the information that they’re being asked to disclose at this stage.
This also allows the insurer to accurately assess the client’s risk, charge them the correct premium, and offer the right cover based on their individual risk profile. Sharing the correct information will prevent their policies being restructured or even cancelled later on because of non-disclosure. At BrightRock, we have found that we get more complete information when our clients use our tele-underwriting option (which allows them to confidentially disclose their information with a skilled consultant), as opposed to filling in the underwriting form manually.
Clients must choose waiting periods based on their needs
For cover with waiting periods, like temporary disability cover, clients should choose a waiting period based on their needs at the start. For example, someone who is a salary-earning employee and who has 30 days of paid sick leave in a three-year cycle, can choose a waiting period of one or two months. This is because they will have a salary in the first couple of months of their temporary disability – they would probably only need their income protection cover to kick in after two months, if they’re booked off for a significant period.
A business owner on the other hand, might need a seven-day waiting period as they work for themselves and would be monetarily impacted by a serious illness or injury much sooner, and would therefore need a pay-out sooner.
Give your clients the best chance of qualifying for a claim
As you know, not all products are built equal. Some companies have more comprehensive claims criteria than others. At BrightRock, we cover hundreds of conditions on our permanent disability, temporary disability and critical illness cover. It’s important to thoroughly investigate the conditions that an insurer covers before recommending a product to your clients. Also check for any barriers to claim like survival periods and unnecessarily stringent criteria.
For example, at BrightRock we pay on diagnosis of stage 4 cancer on permanent disability cover – the client doesn’t have to undergo any treatment before we consider their claim for such a serious illness or wait for any period of time before we approve the claim. Not all providers do this, so look out for claims criteria that could negatively impact your clients.
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