Much is touted, and rightly so, about the importance of the initial risk insurance advice process:
- Research; and
Only after all the above has occurred is the application submitted to the insurer. Yet, as crucial as initial advice is, arguably advice at the other end of the process i.e. claims advice, is more important with a simple but compelling logic applying:
“If you get the initial advice wrong but the claim advice leads to a payment being made, the client may still be happy; however, if you get the initial advice right but the claim advice leads to the claim being denied, the client will be sad.”
Ideally good advice applies in both areas; however, the above highlights the point that, to the extent a robust initial advice process is required, the equivalent is also required when a claim is being considered.
What follows are 20 actions that might be undertaken prior to submitting a claim form to the insurer; noting, of course, that some may not apply, depending on the claim type and some should not apply if they would run contrary to an adviser’s fiduciary duty.
(i) Initial point of contact
When setting up an insurance portfolio and at each subsequent review, the client should be encouraged to make the adviser the initial point of contact particularly if there is the possibility of a claim being made. Whilst the analogy is not perfect, it indicatively holds; if someone falls foul of the law, they would be well-served to have a solicitor attend with them at any police interview.
A vital role undertaken by the adviser is to act as a conduit of communication and interpretation between the client and the insurer. This has nothing to do with ‘hiding’ anything from the insurer; this is all about ensuring that the information flow occurs in a clear and unambiguous way such that misunderstandings and delays are minimised.
The adviser is also perfectly placed to question the insurer about the claim’s management process including the relevance of any claim requirements and explaining both to the client to allay any concerns.
(ii) Single point of contact
If agreeable to the client, the adviser would obtain, and later lodge, an authority to be the single point of contact (written and verbal) in regard to the claim. This again reduces the chance of miscommunication as well as streamlining the flow of information and questioning.
If a client’s insurance is with multiple insurers, the authority could extend to the adviser being the co-ordination point for each insurer; thus avoiding the duplication of requirements, for example, if more than one insurer wants a report from the treating specialist, one report can be obtained and shared as required.
(iii) Claim fact find
Not dissimilar to the initial advice fact find, the claim equivalent sets the scene:
- Personal details – including a high-level statement of the client’s current position and where they want to be;
- Client constraints – are there claim related constraints as distinct from work related ones; physical and/or psychological, mental incapacity, communication/language difficulties; time and geographical constraints, etc?
- Legal considerations – does clear title exist; beneficiaries, third party complications e.g. relatives, divorce, problem children; is a solicitor involved, should one be involved?
- Insurance portfolio – products under which claim might be made; premium position; policy terms that apply including upgrades; exclusions, pre-existing or otherwise; policy duration; possible impact of Insurance Contracts Act?
- Claim details – what is the insured event; sickness or injury; chronic or acute; duration; pre-existing to policy; new or recurrent claim?
- Medical details – who, when and why attended; treatment; when was doctor first consulted, immediately or was there a delay; has medical attention been ‘regular’; is medical condition deteriorating, stable or improving?
- Occupation details – employed or self-employed; full-time, part-time, casual, unemployed; if unemployed, why; education/training/experience; duties and restrictions to same; return to work plans; etc?
- Financial position – current earnings; earnings history - increasing, stable or reducing; debts and otherwise encumbrances; are there financial urgencies or imperatives; should financial institutions be advised of pending claim?
- Third parties – how will claim impact on rest of the family; will life partner need to stop work; if self-employed or partnership, impact on the business; will business insurances be called upon, key person, loan protection;
- Confidentiality – are there any issues with media; peer, business or industry reputation?
The list is potentially long with the above not necessarily being definitive.
(iv) Check applications
Obtain and check application(s) for insurance to see if anything might benefit from an explanation. This is more likely if the policy duration is short. Ask client to again confirm that the duty of disclosure was met. If there are any potential problems, undertake appropriate investigations and, if necessary seek advice, legal or otherwise.
(v) Review policy schedule and policy terms
Obtain and review copies of the original and, if applicable/appropriate, details of any upgrades. If different terms apply, which are most beneficial to the client.
Consider claim eligibility and likely/reasonable claim requirements and whether there is merit in including those available with the claim form when lodged.
Also consider the timing of the claim, for example, if a policy anniversary is imminent, is it possible to take advantage of the benefit amount indexation increase? Is indexation consumer price index (CPI) or does a minimum apply?
(vi) Discuss claim with treating practitioner
Is it worth the client booking an appointment with the treating medical practitioner in order to:
- Review the medical claim form – if necessary, adviser might assist in interpretation/completion whilst being careful to avoid inappropriate influence;
- Discuss attitude of doctor to providing entire client file including clinical notes, if requested by the insurer; is there a preference to responding to specific and relevant questions by way of a report. If preference for the latter, consider advising insurer to this effect; what is the likely turnaround time for reports; again consider advising insurer;
- Discuss doctor’s role of objective, albeit supportive reporting rather than being client/patient advocate; and finally
- Does the treating practitioner have any general advice based on previous experiences?
(vii) Three-year Medicare/PBS report
Consider obtaining and providing a three-year Medicare Report at time of claim lodgment. Undertake and provide an analysis of claim-relevant consultations; provide context if any potential red flags, for example, has there been ‘regular medical attention’ or pre-application consultations.
(viii) Claim form completion
When completing the claim form with the client, provide information that is necessary and relevant to the claim rather than simply answering the questions. If a question is only partially relevant, consider amending it prior to answering.
If spatially challenged, use attachments. Ensure claim form is neat and easy to read.
(ix) Additional medical information
If it is believed additional medical information would assist to speed up a favourable claim assessment, consider providing it, for example, medical reports; details of treating practitioners, current and past; upcoming medical consultations and testing’s, etc.
If there are ‘many’ past and/or present treating practitioners, direct the insurer to the best source of relevant information, for example, is there one doctor coordinating the client’s overall treatment regime?
(x) Own occupation
If the description of own occupation is pivotal to the claim, do not simply entrust it to the claim form questions. An expanded document might include a description of the employer company, large/medium/small; internal reporting line, is client senior management; what are the important duties, what are the functions making up those duties and the skills required to perform those functions.
A document along the lines of the above can then form a direct link to the medical restrictions emanating from the medical practitioner reporting.
If the claim occupation differs from the application occupation, an explanation may assist to avoid confusion, suspicion and additional questioning.
(xi) Proof of earnings
If proof of earnings is relevant, provide requisite proofs, for example, tax return and/or employer letter detailing earned income and also confirming earned income is as per the policy definition. If tax returns are not yet available, advise when they will be available. If the client’s financial position is complex, commission a simplifying report from the accountant.
(xii) Information, relevant (v) irrelevant
Under Section 8.5 of the Life Insurance Code of Practice, an insurer is prevented from requesting information that is not relevant to the claim and the policy. By proactively forming a view of what information might be relevant, requests for code-breaching information can be challenged.
(xiii) Prudent precautions
Pass on to the client advice of prudent precautions including:
Do not respond to ‘random’ assessor phone calls. If the adviser is the single point of contact, all communication should be via the adviser. Client calls should be booked ahead with prior advice of what topics are to be discussed;
Be aware the claim’s assessor will likely view the client’s online presence such as Facebook, LinkedIn or YouTube. Thus, the client should check if anything is in conflict with claim advice or has the possibility to be misconstrued. Consider merit of providing an explanation.
(xiv) Duty of disclosure
A sound safety precaution is to advise the client of the claim equivalent to the application duty of disclosure i.e. in making a claim, there is a requirement to act in good faith.
Ramifications of acting in a way deemed by the insurer to be ‘fraudulent’ can be severe, including cancellation of claim and policy.
(xv) Declarations and authorities
It is crucial that the client carefully and thoughtfully reads all declarations and authorities so that, if they are signed, this action is taken on an informed basis. To assist, the adviser might have a general understanding of their content and purpose so that guidance can be provided.
If the client is in any way uncomfortable with statements agreed to or authorities to be signed; discussion should be encouraged so that deletions and/or amendments might follow, for example, an open-ended medical authority might be deleted and replaced with a statement to the effect that, the provision of additional medical information will be agreed to subject to that information being relevant to the claim and the policy (refer xii, above). A specific authority can then be provided to the insurer on request.
Any delay arising out of not providing an open authority up-front can be reduced to ‘hours’ by the adviser facilitating speedy communication.
(xvi) Corporate entities
If numerous corporate entities exist, the client’s accountant might, by way of a letter, explain the purpose of each and confirm which are active (v) inactive and relevant (v) irrelevant to the claim, such that information is not sought by the insurer about the inactive and irrelevant.
(xvii) Do not assume...
Advise the client ‘do not assume’ i.e. that the insurer will act with empathy, technical expertise, timeliness, and many other characteristics. This is not to denigrate the insurer or all who sail in her; it is simply a prudent precaution and sometimes reality.
If assumptions are made, and shortcomings become the reality, the claim might flounder. By acting net of assumptions, precautions can be taken such that the claim remains on course.
- Ask for confirmation of receipt of documents sent;
- Ensure all relevant and reasonable questions are the subject of an equivalent response; and
- Record details of favourable and unfavourable insurer conduct so that, if necessary, appropriate, corrective or reporting actions may be taken without the need to trawl back over previous correspondence and file notes.
Ensure emails communicating more than one point, have each point numbered and, if necessary, titled. In this way, identification and subsequent follow-up of unanswered questions and referral back to matters raised, becomes easier.
(xviii) Require timeframes, names or titles
Make a note to the effect that, any action timeframe provided by the insurer must be capable of appearing on a calendar, for example, ‘as soon as possible’ and ‘in due course’ are out; ‘by the end of the week’ and ‘within a day or two’ pass the muster.
Any referral should be to a person with a name or a title, for example, ‘my senior’ and ‘internal stakeholders’ are out, ‘to Mary, my manager’ or ‘the claim review committee’ similarly pass the muster.
Any insinuation that the above borders on the pernickety, fails to recognize the impact of dehumanisation on the client when they are left without any clear idea of when decisions will be made or actions taken and, worse still, the sense that this critical time of their life is being controlled by entities rather than persons.
Consider what possible additional actions might assist to facilitate a speedy and favourable claim assessment bearing in mind the client’s unique circumstances as revealed within the claim fact find.
And, most importantly, if in doubt about anything, seek advice and assistance.
(xx) Client empowerment
People involved in making a claim are either sick, injured or grieving and thus they may also be psychologically vulnerable. Not only can the above actions assist in speeding up the claim’s management process and better enabling a favourable claim assessment, but they could help the client to feel they have some control and understanding of the process.
At this time, client empowerment is a great gift for the adviser to give.
Whilst the suggestions made might be a far cry from ‘complete and submit the claim from as quickly as possible to get things moving’, the claim pre-assessment and preparation process does not need to take more than a few days. It is also likely that those days will be easily clawed back in assessment time savings and logically, an enhanced chance of a successful claim outcome and client appreciation and endorsement of adviser actions.
Yet another in the long list of adviser value-adds!
Col Fullagar is principal of Integrity Resolutions Pty.