Financial advisers are spending more time managing the disability and income protection claims of their clients but may have to advocate further to avoid the growing involvement of lawyers in the process.
Affinia general manager Craig Parker said advisers were spending more time managing claims for clients with 'living insurance’ compared to those with life (death) insurance, with the ratio of living to death benefits sitting at an historic high of 2.5:1.
Parker stated that disability cover, income protection and trauma/critical illness cover have increased over the past decade as consumers considered the impact of being unable to work after a claim.
However recent reports of lawyers acting for clients during a claims process meant that advisers needed to become more engaged with their clients and their insurer at the time of a claim.
Parker said advisers usually have a better understanding of the client’s needs and circumstances than a lawyer who would not have an understanding of the insurance products taken out by the clients, nor would they have a regular working relationship with the insurers.
“The increased involvement of lawyers in claims is worrying because this is a role advisers should be performing on behalf of their clients. The involvement of a lawyer will not influence the decision of an insurer. Claims advocacy is the role of the adviser,” Parker said.
“Claims advocacy is a key service proposition of the financial advice profession and if this is not carried out during this current period of heightened claims, advisers are missing out on a crucial opportunity to demonstrate their value.”
