A reassuring fact is that 92-93% percent of claims were accepted and paid (as reported by AIA & Fidelity life). However for those families where expected protection fails, it is a bad time. For many families the protection can be more robust by understanding the reasons why claims are not successful.
Transparency is key: Why honesty builds the strongest policies
When taking out a policy, there are many health questions to complete. Also the fine print is important – if it pertains to full health disclosure being made. The answers is how an insurance company decides if they can provide full cover at standard pricing. Sounds simple enough, however there is something you should know. When a claim is made, insurance companies will request medical information to check that you meet the requirements under the policy wording. At this point (and it could be years after taking the policy) if the insurance company discovers medical issues which were not disclosed at the time of taking a policy they can have grounds to deny the claims or worse still cancel the policy.
Understanding what is covered
Some amazing types of cover have become available over time, however they are not all the same. Some covers like Trauma – has specific medical conditions which are covered at certain stages. This is one of the main three reasons why claims don’t work out. Finding out that a condition is not covered at the time of the claim is the worst time to discover this information. Using a decent insurance adviser(life ours) to compare policies is important. Income cover tends to provide cover based on ability to work where as trauma cover tends to have specified conditions. Different insurance companies tend to varying levels of cover at early stages of health conditions with trauma cover.
Back to work faster: knowing your wait period
Surprisingly the third reason why claims are not successful is that the wait period on income type covers. Clients return to work before the wait period. These policies tend to be cheaper if you select a longer wait period(the time you have to impaired before getting a claim). Or cheaper if you have a shorter claim period selected. So it is important to review these covers periodically or especially when there are financial or employment changes. Having a larger savings can allow for longer wait periods. Having alternative ways of accessing capital can mean that shorter payment terms could be acceptable.