Insurance: Is the claims process really that simple?

There has been a lot of media activity around the process of claiming on personal insurances (Life/TPD/Trauma/IP). For most financial advisers, I doubt that any of these issues are new. The use of Independent Medical Examiners (IME), cherry picking medical evidence to decline claims, getting off on a technicality, I am sure that these have all been raised by clients as they sit across from their adviser. The client might not know about all of these techniques, but what they want to know, and usually ask you, is will the recommended company actually payout when they say they will?

After all, it's not much good to our client if we recommend a company that will leave them ricocheting from one IME to another when they are already financially and emotionally vulnerable. Nor is it a good look for the adviser if they need to recommend that the client gets legal advice. So, how do we, as advisers come to choose one insurance company over the other? I know that the ease of claims is one of the criteria that we use at Achieveit Financial Planning when determining which company to use. That's not to say that the insurance companies are always going to pay out, but that their claims process is clear, timely, and, most important of all, has consistency. That is, that the insurer won't insist on the use of an IME for one thing, but not the other. That the insurer communicates well with the adviser. That the insurer keeps with the "spirit" of their contract, rather than latching onto a technicality so that they don't need to pay up.

Now, the information that I would be most keen to see is whether or not having an adviser on the client's side makes a difference regarding the outcome, or the treatment, of the claim. The reason I am curious about this is that I recently assisted a pro-bono client with a TPD claim. The forms were not simple, as the client has developed a condition that makes their skin photosensitive, rather than a cut and dry back injury. The cover was held through an employer super, which transferred to a personal super mid-claim. It was stressful for the client, who was already struggling with the idea of not working, and I highly doubt that the claim would have been successful without my involvement. Somebody who knew what the insurance company was looking for was needed to navigate the pitfalls that are "standard" TPD claim forms, as well as the reluctance of the employer to make a judgement call on a medical issue, or the Doctor to make a judgement call on the client's ability to perform the duties set out by the employer.

Overall, I found that the claims process for this client, using an insurer that I had no sway with, was not that easy. Every time I touched the file, I wished that the client was with one of the companies that I frequently recommend. How easy would it have been to be able to call the BDM and get the inside run on the claim? BDMs may get a bad rap on occasion, but having gone through this process without one was a learning curve.

So, if this claim, which ran for four months, was a struggle for me, and I know the system, then I have to conclude that no, the claims process for the average person is really not that simple.

Find Erin* at Achieveit Financial Planning, or call for an appointment on 07 4638 5011.

*Authorised Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL 240687

This is general information only and does not consider your personal circumstances. You should not act on any recommendation without obtaining professional advice specific to your circumstances. We recommend you speak to a financial adviser before acting on any of the information you read on this website.

Is super really the be all and end all?

Personally, for myself, the answer is yes, because every few years politicians seem to either try to make superannuation easier for the everyday person, or more complex to drive a further wedge between the role of the accountant and financial planner.  So, as a financial planner, these constant changes mean that I will not be lacking in work for the next 30 odd years, and so superannuation is the be all and end all for funding my career.

However, as a layperson, the answer will often depend on your age.  For those less than 10 years out from retirement, the focus shifts heavily from assets outside of superannuation to getting those assets inside superannuation.  There are two reasons for this.  The first is that, in general, accessibility to the funds is less of a problem as the client is more or less setup and their expenses (aka...children) have decreased.  The second is that we can be about 80% sure that the powers that be won't be changing the rules too drastically, and that any changes that are made, we should be able to cope with.

What I find interesting is that there seems to be a lot of hand wringing and teeth gnashing that younger people, those with more than 10 years until retirement, don't want to contribute more to superannuation than the stock standard 9.5%.  My question is, why should they?

I spend a considerable amount of time with my younger clients emphasising and encouraging them to forward plan their budget so that as their income increases, their expenditure stays the same and they can build for their future.  This often requires a steady hand, with deliberate and well thought out decisions using stable, legislated tax systems.

So, rather than more changes to help the Government balance their books (much like the ones coming in on July 1, 2017), the politicians could provide some consistency and surety in the superannuation system, rather than gimmicks one year and austerity the next.  Perhaps then, we could attract the economy's younger cohort to the superannuation party.

Find Erin* at Achieveit Financial Planning or call for an appointment on 07 4638 5011.

*Authorised Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL 240687.

This is general information only and does not consider your personal circumstances.  You should not act on any recommendation without obtaining professional advice specific to your circumstances.  We recommend you speak to a financial adviser before acting on any of the information you read on this website.