The reason for the caption above is, if you have existing policies bought directly from an insurer, agent or online, they must be checked to ensure that claims do not go pear-shaped along the journey.
In my experience working for an insurer over nine years, most declined claims could have been avoided if adequate care had been taken in answering the medical questions correctly. Had the person used an insurance adviser to review their policies, the claim would have likely been paid out. Tragic!
This is often because people do not have the support that they need in completing their insurance application. A lot of care and guidance is required to avoid common mistakes and answer questions accurately. When they are not, people get penalised at claim time.
The chief reason
There are 30 or so medical questions in a typical insurance application.
Think of each medical question as a potential minefield so that is 30 potential minefields to work our way through.
Think of your experienced adviser as a mine sweeper, making sure the questions are answered correctly so an insurance company cannot get out of the contract at claim time.
No errors, no explosions!
Let us take one medical question on cholesterol which is answered incorrectly most times when an adviser is not involved.
The Cholesterol Bomb
The first question on most application forms, for example, is, “Do you suffer from high cholesterol?” Most people on an online application, with no one to guide them or caution them, will answer ‘No’ if they are not on medication.
Theoretically right, but technically wrong.
I typically rephrase the question. It really should be, “Did the doctor ever ask you to exercise and diet to bring down your cholesterol?”
Many would respond ‘Yes,’ even if they think they are okay because the doctor said cholesterol was under a certain limit and did not prescribe any meds.
The correct response for the first question for many should in fact be ‘Yes,’ with a further explanation that the doctor advised diet and exercise.
This may lead to a blood test required at application time, and the insurance company is on notice to accept your contract at standard rates if the results are normal.
Or it may even lead to an increased premium. But paying a little higher premium is far better than getting declined at claim time, right?
Advisor or Negotiator?
A good adviser is also a good negotiator on your behalf – getting the lowest premiums possible and finding ways to even remove that extra ‘loading’ of higher premiums if you can bring your cholesterol levels down within, say, 12 months.
And most importantly, it will get the cholesterol bomb out of the way so that a claim cannot be declined and explode on you when you suffer from heart disease few years down the line.
Get your insurance checked today.
I have highlighted only one bomb and showed the way to address it, but what about the other 29 med questions? Have you answered them correctly?
The trouble is, many people buying insurance online or through a bank do not have the support they need to get this right.
Many of these sales channels seem to encourage what we call ‘inadvertent non-disclosures,’ probably to get the numbers.
People need someone to make sure that, if they suffer a heart attack 10 years down the line, they would not have inadvertently not disclosed their cholesterol situation and miss out on their trauma cover.
That is why insurance advisers like me are here!
An easy way to start is by seeing if your current insurance passes its warrant.
By answering seven easy ‘Yes/No’ questions, you can quickly test whether your cover needs a bit of work to avoid non-payment of a claim in the future.
Anand Srinivasan is a Registered Financial Advisor with several years of experience in finance and insurance. After a long association with AIA New Zealand as National Manager, Key Relationships, he established ‘Brisk Insurance’ to provide advice on all aspects of insurance and a range of services to suit individual needs. He can be contacted on (09) 2128690 or 021-595750. Email: email@example.com