Paying Life Insurance claims: Putting customers before profit
We all remember scandals in the media surrounding Life Insurance and insurers not paying claims. It was one of the reasons financial services was included in this year’s Royal Commission. This press continues today.
This is in relation to an ASIC enquiry into the Direct Life Insurance industry and recent significant regulatory reforms that have redesigned the adviser commission structure and implementation of a Code of Practice by the FSC.
All of us have heard senior management teams state that “the customer comes first” and “the customer is central to our business”, but in some instances the behaviour of the business is inconsistent with this important objective. This can be an indication of poor culture or at the very least, a misunderstanding down the line as to what these statements mean day to day.
Many people in both claims and client service roles across the Life Insurance industry genuinely care about the customer and aim to provide the best customer experience. This is often the reason why they are in these roles. A company’s culture can naturally either help or hinder their actions in maintaining their passion and commitment – as well as the results they achieve.
Life Insurance is a social responsibility, not just a business. It comes down to human nature. We have a responsibility of looking after each other. This is not in conflict with being a commercial entity. In fact, I believe it can be completely consistent. Looking after your customers and doing the right thing is simply good business.
We are proud that at NobleOak, our culture is very important to us and we truly believe in helping our clients. This is shared right across our organisation.
It’s that genuine belief in doing the right thing wherever we can that is just as important as adhering to the wording in a PDS (Product Disclosure Statement).
Benefits of fully underwritten cover
At NobleOak we only offer fully underwritten cover. Yes, you will need to provide more detailed information when you apply but this will provide you more certainty at claim time, and possibly at a lower cost than partially underwritten cover.
By taking out fully underwritten Life Insurance, the claims process will be greatly simplified, and your loved ones will have more certainty because the Life insurer already has all the necessary information about you.
Although it’s easy to obtain Life Insurance which has limited or no underwriting (avoiding any upfront medical assessment), the result is that your policy has not been established with you and your individual circumstances fully considered.
In practice, your dependents and loved ones may need to deal with an invasive review of your medical history at claim time, a time of extreme emotional stress and potential financial difficulty. If something in your medical history or the manner of your death is considered significant, there could be a chance that your claim entitlement may be significantly reduced or even denied.
The importance of the industry
The Australian Life Insurance Industry has consistently provided financial security for Australians for over 150 years. It paid over $9 billion in claims in 2016 alone – that’s almost $25 million each and every day. Most claims would have been paid without drama and without unnecessary hassles and delays.
I hope that on the other side of this adverse media coverage regarding the Royal Commission, the Australian community continues to understand the value of their Life Insurance cover and better understand what quality cover looks like.
Please note that the information we provide is not advice but general information only.