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Case Study

In AFRM Managing Director, Rob Vitnell’s, August Referral Partner Update on the subject of “retrospective claims” he mentioned the case of husband and wife clients, John and Kate [names changed to protect client privacy], who scheduled a review meeting earlier this year.

Their last review had been in 2019.

Among several reason for seeking a review of their current financial risk management plan were:

  • To revisit discussions back in 2019 when John was considering changing his level and type of cover to reduce the cost of his premiums,

  • To review whether their current financial risk management plan remained appropriate now that their children were approaching their teens and in 20 years’ time John would be approaching retirement, and;

  • To assess whether their “expensive” insurance is providing the appropriate level of cover that they had originally planned.

John and Kate also wanted to discuss their superannuation and retirement planning. AFRM provided advice in relation to these subjects as far as they related to their financial risk management plans but guided them to their referring financial advisor and to an estate planning law specialist for more specific advice in these areas.

John held three policies: Income Protection (IP); Term Life with Total and Permanent Disability (TPD); and a Trauma policy, with premiums for all three policies totalling around $650 per month ($7,800 per annum).

Kate also held the same three policies. However, two of Kate’s policies were subject to exclusions and her monthly premiums were slightly higher, totalling $812 ($9,744 per annum).

Together, the couple’s life insurance premiums totalled more than $17,500 per annum.

John and Kate were keen to investigate ways of mitigating their current premium costs.

During the review meeting, Rob asked how they had both been health-wise over the time since they had last caught up?

That’s when John revealed he’d had a major medical episode several weeks earlier and had to be rushed to hospital in an ambulance. He’d even received shock treatment via a defibrillator on the way.

It turns out, John had essentially had a heart attack. After being admitted to Emergency he’d undergone an angiogram and had a stent inserted in one of his heart’s arteries. He was in hospital for three days (including two nights).

While no heart tissue had “died” during the event, he had suffered what is called a supraventricular tachycardia (SVT), which is a hyper rapid heartbeat that develops when the normal electrical impulses of the heart are disrupted. He’d also shown high levels of Troponin in his blood. (Very high levels of troponin are considered a sign that a heart attack has occurred.)

These various factors are crucial to ensuring a trauma claim meets the definition of a heart attack under the terms of a policy.

Despite the seriousness of this incident, it had not occurred to John that this episode merited a claim under his Trauma insurance. Again, the very same insurance that he had questioned the merit of continuing to pay the premiums.

Rob counselled John not to make any changes to his insurance policies until such time as AFRM had investigated filing a Trauma claim on his behalf. Rob also had to point out that this recent serious medical episode may hinder his ability to get new policies on terms as favourable as those he already had.

AFRM then investigated the potential of making a claim under John’s Trauma insurance policy and also under the “Nursing Care” ancillary benefits included in his IP policy. [Read this separate case study for more information about ancillary benefits]

Jump forward to September 2021 after months of compiling and submitting all of the relevant documentation from John’s cardiologists, the Emergency Department treating physicians and other related medical and financial documentation and AFRM was pleased to advise John that he had been awarded a partial benefit under his Trauma policy in excess of $50,000 because his condition met its definition for “angioplasty – single or double vessel.”

However, an additional claim for an ancillary “Nursing Care” benefit under his IP policy did not meet the terms of the contract because to do so he would have had to have been in hospital for more than three consecutive days. He would have been eligible if he had spent one more day in hospital.

Needless to say, John was extremely appreciative of AFRM’s support through the claim process and was grateful for having that cover in place.

Ironically, the very same policy is now up for renewal, less the $50,000 partial claim amount, but with heart attack coverage retained on the balance.

We suspect John will now see the real value in keeping this cover in place.


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