Part of our ask the adviser series: Will my claim be paid? by Karen Searle
For the best part of the last 30 years, I have worked in and around the world of Financial Services. So, have seen many changes.
My most recent experience lies within supporting individuals protect their financial world and those important to them. Through life cover, protection of income from sickness or injury or alleviating the financial impact of being diagnosed with a critical illness.
When speaking with my clients the three areas of insurance mentioned above all others is “will the insurer actually payout?”
This is a completely understandable concern. If you are paying for financial protection, you should get it when you need it.
In 2018 (97.6%) of claims were paid based on recent figures released by the Association of British Insurers (ABI) May 2019. This represented £5.3 billion in protection claims which was a large increase of £300,000 compared to 2017. However, there was still a very small percentage 2.4% of claims, that were rejected.
You may be wondering “why is this figure not 100% and could this affect me?”
There are a number of reasons why a claim would not be paid and these are explored below.
Non – Disclosure
The most common reason for a claim to be declined is due to what is called non-disclosure. Each insurance provider will have a set of questions which form their application for cover. Although these questions can vary from company to company they are broadly the same. Insurers look at your medical history and lifestyle.
They expect their application questions to be answered truthfully and accurately, declaring all pre-existing medical conditions. Underwriters have the difficult task of assessing each risk and making a decision. Ideally offering cover at what they consider to be a fair and equitable premium.
If a policyholder has a medical condition which was not disclosed during the application process. And they subsequently passed away as a result of that condition or from associated complications, then the insurance company will not honour the claim. This is because the policy was issued on the basis that the applicant was fit and healthy.
Read our plain English guide to Underwriting decisions to discover how insurers can accommodate existing conditions.
If premiums for your protection policy are not kept up to date, this will result in the policy lapsing (coming to an end). This means that unless the missed premiums are made within an agreed timescale to the insurance provider they will terminate the cover. There is typically a 30 day period of grace for missed payments.
End of the term
If the policy has come to the end of its original term and a claim is made. Again this would result in the claim not being paid. For example, if a life policy was taken out to span the duration of a 25-year mortgage term and the end of the 25-year expiry was reached. There would be no policy in force to make a claim against.
How we can help
At Future Proof, we have a team of qualified advisers. The team take time during their fact-finding calls to really get to know their clients. Completely understand what they need and how best to support them in achieving their goals.
We do this by asking clear in-depth questions in order to understand what their concerns and priorities are. And provide the correct financial cushion when it is needed most.
Our advisers have many years of experience between them in asking the right questions at the right time whilst clarifying at each stage. This allows us to put ourselves in a fully informed position to provide the best possible advice and recommendation based on individuals identified needs.
Part of our role is to work with clients and educate them along the way as to what insurance companies need to know, and the type of information that will be required.
No one wants to think of the worst happening and we totally understand how hard this can be both physically and emotionally. Therefore, if a claim situation arises, we also have a team of trained Claim Handlers, who take our clients through each step of the claims process to ensure this goes smoothly and with the minimum of fuss or inconvenience.
How to avoid non-disclosure
In order to avoid a situation where a claim is refused due to non-disclosure, it is really important for all necessary details to be provided to the adviser at the outset and to be totally honest at the application stage. Even if you think something may not be relevant it is better to mention it rather than not.
Getting expert advice is essential
If you apply all the above advice you will then put yourself in the best possible place to ensure that if you find yourself in a position where you need to make a claim, it would be successfully paid out by the insurance provider.
For help and advice – Call 0800 644 4468
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