The Count Report - No. 107

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Case Study

Anatomy of a life insurance claim

For many Australians, the 2011 Queensland floods shone a spotlight on the ‘experience’ of making an insurance claim. While not identical, this issue is equally pertinent to clients who protect their financial circumstances through life, disability, and medical trauma policies.

So, how do Count financial advisers and their clients fare in their claims experience with life insurers?

To obtain a perspective from the ‘coal-face’, we spoke with Count Financial Advisers Manish Sundarjee (Kidmans Partners) and Ian Satill (Curo Financial).

In 2010/11, two clients of Kidmans Partners were diagnosed with cancer. Ian Satill, as Kidmans’ Wealth Protection partner, managed the claims.

Manish explains: “At Kidmans Partners we focus on our strengths such as our corporate tax services, and financial advice in areas such as investment, superannuation, and strategic advice. However when it comes to offering our clients advice on Wealth Protection, we have partnered with fellow Count Member Ian Satill from Curo Financial.”

Ian: “Many fellow Count practices employ their own Wealth Protection specialists. However, some, such as Kidmans Partners, choose to partner with us, as this is our area of expertise.”

On the morning of Friday 19 November, Manish received a call from a client who was diagnosed with oesophageal cancer and was given eight to ten months to live. Ian recalls “He had life insurance of $1.16 million that was undertaken 18 months ago, so we knew he was eligible to claim under the terminal illness benefit. From that point Curo Financial took over and contacted the client immediately.”

Even with adviser assistance, a terminal illness claim normally takes about three months to settle. This is in part due to the insurer’s need to conduct due diligence, including sourcing medical reports which can take up to 12 weeks to arrive.

Manish: “Needless to say, this was an extremely stressful time for my client. Medical expenses, repayment of debts, and stoppage of their work income bring financial matters to a head. The emotional impact alone is often too much for a client to deal with a claim on their own. Unnecessary delays can have a material impact on their circumstances, further adding to their stress. I was very glad that Ian’s services were available to my client.”

Aware of the potential for delays, Ian immediately contacted the head of claims at the insurer. “We have a longstanding relationship with their team, and because of our experience we were able to suggest alternatives which were acceptable and met their due diligence needs.”

By Wednesday 24 November, Ian submitted all the required information on behalf of the client, and the Head of Claims notified Curo Financial of their intention to accept the claim. The next day, a payment of $1.16 million was made to the client’s bank account – four working days after the client notified Manish of his cancer diagnosis.

Manish remembers: “My client and his wife were naturally ecstatic and extremely grateful for the incredible service that they had received. Their financial security was now assured and they could focus on personal and medical matters instead.”

So, is this high level of claims service repeatable – or was it a one-off experience?

Ian: “Life insurers have legitimate questions that need to be answered, which unfortunately can cause delays. Despite this, in 2011 we managed claims totalling more than $3 million across three insurers and all were paid within seven working days of speaking with the client.

The key piece of advice I give to insured clients is that they should call their financial adviser if they are diagnosed with a serious health condition. Managing your claim without your adviser’s guidance can be a daunting experience, particularly when you have a number of pressing issues to deal with.”