Updated: Apr 26, 2022
In many of our case studies we share with you examples of what can go wrong when you do not have an up-to-date financial risk management plan in place or when you cancel, or downgrade, your cover as a means of saving money in your monthly budget.
This case study highlights the opposite. This case study demonstrates the outcomes possible when you keep good levels of cover in place for the long-term and trust that all of your financial risks will be managed appropriately if the worst should happen and you need to make a claim.
It is the story of Jane – a long-term AFRM client who along with her husband, Joseph, are principals of a successful professional practice with an extensive client list.
Accordingly, each have financial risk management plans that address the fact that the ongoing financial success of the practice is highly dependent upon both of them continuing to be able to work.
Jane has Income Protection (IP), Term Life and Trauma with Total and Permanent Disability (TPD) policies.
Jane has always been the primary point of contact for the couple’s AFRM advisers over the years, holding regular review meetings each year.
With the ongoing success of their professional practice, the couple saw no great need to make changes to their level of cover ‒ a view shared by their AFRM advisers, the current one being Phil Hatherly, one of AFRM’s most senior advisers, who has been with the company 15 years this year.
However, over the years AFRM did provide advice and assistance to Jane and Joseph regarding setting up Trauma cover for their three children, and also as the eldest of those children reached adulthood, switching the relevant child trauma policies to adult, self-owned, policies.
Phil and Jane met in March 2021 for their annual financial risk management plan review.
They discussed impacts on the practice during the previous 12 months due to the COVID-19 pandemic, reviewed all existing insurances the couple had in place and, as with previous reviews through the years, deemed the current risk management plan appropriate for their current life circumstances.
Then, in the third quarter of last year Phil received a phone call that none on the team at AFRM ever wants to receive but is always ready for…
Jane called to say that after a routine mammogram check she had been given an initial diagnosis of breast cancer but was awaiting further pathology results to confirm the severity and extent.
Phil immediately commenced an assessment of the implications on Jane’s insurances and scheduled a follow up call as soon as further pathology results were known.
The early pathology suggested Stage 1 breast cancer but there was some evidence it may have spread to lymph nodes as well. Part of the tumour had already been removed, however there was concern among treating oncologists and surgeons that there may be an insufficient margin of healthy tissue in the vicinity of the tumour.
Jane advised that her medical practitioners were working on a strategy for further treatment.
Reviewing applicable insurances, Phil advised Jane her Trauma cover could assist with treatment and other out of pocket costs and that her IP policy would provide cover for lost income while Jane was unable to work.
Immediately after that call, Phil set the claim process in motion, advising the insurer of the diagnosis, that a treatment plan was being formulated, and that AFRM would be managing Trauma and IP claims on behalf of Jane and requested that the relevant claim form application packs be provided.
Within the week another follow-up call ensued with Jane, in which the sad news was relayed to Phil that a single mastectomy was required in the first instance and further gene testing was underway to determine if a possible double mastectomy may be required at some future date.
This call concluded with Phil letting Jane know that AFRM’s Claims Manager, Anthony De Lellis, would be assigned to assist and support Jane through each claim, managing all aspects of the process so that she could just focus on dealing with her medical treatment and rehabilitation.
That same day, Anthony called to introduce himself to Jane and to talk her through the details and information that would be required for each of her claims and explained how he would assist her through the administration and management of the process.
Anthony and Jane also discussed her immediate priorities and agreed to focus on the Trauma claim paperwork and supporting documentation as the highest priority, with the IP claim as secondary.
Significantly, Jane had the same insurer for both her IP and Trauma policies and when reviewing the Product Disclosure Statement for these “old” products from more than a decade ago, Anthony noted that the same “Cancer” definition applied to each claim.
By now it was late 2021 and, as is usually the case, the process of liaising with treating medical practitioners to compile all of the medical reports and other documentation to support each claim took several months, mainly due to continuing assessment of appropriate treatment for Jane.
By February 2022, both claims had been formally submitted to the insurer with full supporting documentation. At that time, Anthony highlighted to the insurer that the evidence provided by Jane’s medical reports demonstrated her condition met the policies’ PDS definition for Cancer.
Following submission of the claim applications, Anthony was in regular touch with the insurers to push for progress updates.
It is also worth noting here that a Trauma policy (and claim) is based upon the suffering of a specific illness or injury – in this case malignant cancer. There is no need to assess the claimant’s ability to work for a Trauma claim.
In contrast, IP claims are typically based on a medical assessment of the claimant’s ability to work.
However, in this case, Jane also had a Trauma benefit built into her IP policy contract that specified the policyholder would be paid the full insured monthly benefit for a period of six months (based on suffering the same illness or injury as defined in the Trauma policy) regardless of whether the claimant is able to work or not.
Thanks to the thoroughness with which Anthony had completed each claim application, there was no push back from the insurer on either claim and once due process was completed – including the insurer liaising with its reinsurer for agreement on the claim assessments – just over a month after AFRM had submitted both claims, we were formally advised that both Jane’s IP and Trauma claims had been accepted.
Jane’s Trauma benefit payment in excess of $2.9m was the largest individual Trauma claim payment ever achieved by AFRM. She also received a Financial Planning Benefit which entitled her to a reimbursement of up to $2,500 for financial planning advice related to how she should best handle receiving the Trauma benefit.
Jane also received IP and related benefits totalling in excess of $60,000.
In addition to her benefit payments, Jane also received a refund of premiums paid for both policies of more than $24,000.
While no amount of money can ever make up for the trauma of suffering from cancer and a mastectomy, AFRM was able to shield Jane from the stress of having to manage all of the work required to compile full claim applications (with all of the required supporting documentation) and achieve the best possible claim outcomes on her behalf to ensure her medical treatment and out of pocket costs were covered.
That provided Jane with the best possible foundation upon which to build her recovery, rehabilitation and return to wellness.