Good Grief! They want to know what I ate for breakfast!

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I know – it does feel a bit like that completing insurance application forms.

The whole reason you fill out these forms and go through this process is to protect yourself, your business and the people you love.

Recently there was a provocative article on the television programme, “Fair Go” regarding a client whose income protection claim had been declined. “Yes”, it is upsetting to see people struggling, however, there is often another perspective. A key factor for me was that the client took the case to the insurance ombudsman who ruled in the favour of the insurer. Since the first screening, the medical information supplied to support the claim has been amended by the medical profession and as a consequence, the claim has been paid. A good outcome in the end but a lot of stress along the way.

If there is blatant non-disclosure, an insurer cannot be expected to pay the claim. If they do, the knock-on effect is increased premiums for those that make honest disclosures. In recent conversations with a senior underwriter, he advised that he would prefer the client say if they cannot remember specific dates or that the dates are approximate, rather than not completing details at all. The underwriter will then follow up as required.

The forms can be challenging to complete and require real thought as to your medical history. The reality is that you are entering into a legal contract whereby your estate may be paid hundreds of thousands of dollars in the event of your death, or you may be paid similar sums if you are diagnosed with an illness such as cancer, or find that you will never work again.

The lack of balance in the Fair Go programme was frustrating. $1.2 billion was paid in personal insurance claims last year which takes a great deal of pressure off the public purse – and provides New Zealanders with choice and dignity when they are working through tough personal medical issues.

As a financial adviser, specialising in insurance; we often have some hard conversations with our clients. I appreciate and respect that it is a huge leap of faith for many to have these discussions.

However, it is not possible to provide you with good advice unless we ask the questions that enable us to get an understanding of your goals and values. If there is a medical issue, it is best to disclose it upfront and let the insurer determine whether it has a material impact on your application. It is also best to have this discussion at the time we are setting the policy up, rather than an added stress at claim time, or at worst a potential decline of cover.

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