At a conference in February Nadine Tereora, the CEO of Fidelity Life, stated that their claims rating was 99.8%. All the insurance providers Plus4 work with have claims ratings of over 95%, which illustrates very clearly that insurance providers are paying out on the vast majority of claims that are made.
On the back of this evidence, and our own experience, as advisers we are often taken aback by the staunch belief of some people that insurance companies will do whatever they can to get out of paying out on claims.
If you are curious about that small percentage of claims that don’t get paid, read on, and find out what you can do to make sure you are in the 95% if you ever need to claim.
Yes, all those forms are a pain to fill out, but doing it properly and taking it seriously is critical to getting that pay-out when claim time comes.
We believe the insurance providers we use pay out on all legitimate claims, but insurance providers need all the relevant information to be able to make the decision to underwrite a client’s insurance.
The main reason claims are not paid out is due to material non-disclosure.
Material non-disclosure means things that are relevant or pertinent to the claim. For example, if you have a skin cancer diagnosis but didn’t disclose your knee surgery that shouldn’t be an issue, however if you had previously had cancerous moles removed and didn’t disclose that, it is going to compromise your ability to make a successful claim.
When it comes to making a claim, it doesn’t matter whether the non-disclosure is accidental or deliberate, the claim could be denied.
If you feel tempted to hold something back because you are worried you won’t be covered, you should know that you could still get comprehensive cover, with some minor exclusions for pre-existing conditions. And for some conditions, after a symptom free period you can be covered. Working with an adviser and being honest with them about your concerns and history, means you will know where you stand, and be able to make informed choices about your cover.
One of our Plus4 values is that we will recommend the best policy, but sometimes when we take on new clients and review their current insurance we find they have policies that are out of date, below current industry standards, or not from a provider we would use or recommend.
In these circumstances we would work to recommend a better policy to the client. We make sure the policies we recommend are at the top of industry standards for wordings, and make sure it still matches your current situation.
A potential concern with changing policies is the loss of any pre-existing conditions that were covered, however if we recommend a change there will be good reason to do so. When going through this process we are careful to not lose cover, by applying for the new policy before changing or cancelling the current policy. This provides continuation of cover, and also means that if the provider comes back with exclusions we can work with the client to weigh up their choices.
In addition to making sure our clients have the best cover, we want them to be informed and empowered when making decisions for their insurance.
Making sure your expectations are aligned with the ins and outs of your cover means you will know when you can make a legitimate claim.
One of the interesting contributors to the statistics on denied claims is a lack of understanding of what different types of insurance cover and claims being made that the policy doesn’t actually cover.
For example, if you have income protection and cannot work because of a health condition your income protection should cover you. However if your child has a severely broken leg and you cannot work because you need to care for them, unfortunately you cannot claim on your income protection.
Depending on your policy however, if you have trauma cover and your child becomes unwell with one of the listed conditions (such as cancer) you may be eligible for a lump sum pay out. When you are choosing your insurance policies, talking through different scenarios with your adviser to understand which policies come into play under which circumstances will help you make informed decisions.
If something happens and you want to find out if you can make a claim, get in touch with your adviser and they will help you understand which policy you should be claiming under will guide you through the claims process.
The absolute best way to get your insurance claim paid is to work with an adviser from the very beginning. Our job is to put you in the best claimable position at any given point.
If insurance companies regularly tried to get out of paying legitimate claims, stories like these would not be newsworthy. Insurance claim statistics are high, what drives them down is unsuccessful, non-legitimate claims.
However, New Zealanders are underinsured*, and we believe these sensationalised stories in the media, given without the full background information, are irresponsible because they discourage people from getting insurance.
Getting your insurance cover in place by working with an adviser, and maintaining an ongoing relationship with them, is a critical step in having good cover and making successful insurance claims. If you don’t have an adviser get in touch with one of ours today. If you have an adviser and would like to change to one of ours, you won’t to have to change your policies, though if we think you could have better cover, we will let you know.
*New Zealand has one of the lowest penetration rates of life insurance in the developed world (Massey University and Financial Services Council – Exploring under-insurance in New Zealand) and approximately 30 per cent of Kiwi households have life insurance cover. (NZIER – Resetting life insurance)
Here are a few reviews from some of our existing clients around New Zealand