Life can be uncertain. One of the ways to manage uncertainty is to secure yourself and your family financially with a long-term insurance policy. But if you need to claim, you may be wondering how to lodge the claim and what kind of information you need to provide. The claims process is a sophisticated one, and each claim is assessed on an individual basis. Having all the facts to assist you when making a claim can take the stress out of the process.
The truth will streamline the claims process
The amount of coverage and the cost of premiums are decided during the underwriting stage; this is when where you're applying for the cover and questions are asked about your health and personal circumstances. The number of applications received by the insurer at this stage makes it almost impossible to verify all the information provided. Insurers, including Liberty, do their very best to help you to disclose truthfully and fully. Questionnaires are set out to be comprehensive and written in plain language. Where medical evidence is required, often a travelling nurse can helpfully visit you rather than have you finding a nearby doctor or service.
All insurers do rely on a policy of good faith that you answer all the questions in your contract truthfully. Non-disclosure can have serious implications later on. Ursula Torr, the Head of Technical Marketing at Liberty explains, “When important medical, financial, lifestyle or occupational questions are answered incorrectly or where important information is omitted when cover is first bought, this is non-disclosure. It ranges from deliberate fraud to innocent omissions where certain information is simply forgotten and not revealed.”
A study conducted by Liberty revealed that many applicants submit much lower body masses when their BMI is calculated. It also says applicants do not disclose all their medical information to underwriters but reveal more to a nurse. Underwriters purely use this information to correctly calculate premiums. It is essential for them to complete their role at the start of a policy so that the claims process flows smoothly. In the same way an accountant needs correct financials, underwriters need correct health information.
Why is my claim investigated?
When you lodge a claim, a claims investigation process is initiated. What have you done that needs to be investigated? The answer is: nothing! Every claim undergoes investigation to verify that the contract was set up correctly. Insurers perform this check at claims stage rather than at the start of each policy at the start because there are fewer claims than policies, and therefore a much more streamlined process.
What if I make a mistake?
Mistakes happen. Any issues discovered during the investigation stage are then assessed on their individual merit. Liberty decides how best to rectify non-disclosure based on how it affected the fairness of the risk pool. A claim is never dismissed outright but in extreme instances where someone deliberately misleads underwriters, the claim may be rejected and premiums returned.
Do insurers not want to pay claims?
Many people believe insurers try to evade the pay-out stage of the process. This is simply not true. Insurers are in the business of paying claims. Not paying claims will have negative consequences for them. Liberty’s philosophy is to pay all valid claims. As long as the process is followed correctly and honestly, claims are paid when they are required.
Many policyholders believe that if non-disclosure of information does not relate to the cause of life cover claims, then the claim should still be paid out. Your policy is a contract with the insurer. If you do not follow the terms of the contract, then it becomes null-and-void - as with any contract.
If you still have questions, contact your Liberty financial adviser about the claims process, or to either begin a policy or rectify an outstanding one.
* This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice. The material has been created for information purpose only and does not contain any personal recommendations. Please consult your financial adviser should you require advice of a financial nature and/or intermediary services.
** Liberty Group Limited (Reg. no 1957/002788/06) is a registered Long Term Insurer, the Insurer or Liberty Lifestyle Protector and an Authorised Financial Services Provider (FAIS no 2409).