Often in our communications we talk about the importance of having regular reviews of your financial risk management plan and the need for those plans to be amended when they no longer fit your specific life circumstances.
Routinely we advise that cancelling your current insurance products should never be done without thorough consideration and at least a full health check before you do so.
The prime reason for that is that when applying for a new policy your full medical history to date is often required as part of the application process ‒ with any past conditions/injuries potentially resulting in an exclusion in your new policy ‒ and also because there is currently a trend for insurers to be less generous in the benefits and definitions included in new policy products in the marketplace as they strive for improved financial sustainability.
So, there is always a chance of any new policy you are successful in applying for being less generous in terms of the benefits you receive if you ever need to make a claim. Further, it could be that the hurdles you need to jump to make a successful claim may be higher than they were for your previous policy.
Of course, these are just general observations and every individual client’s situation is different.
Enter stage left, James [name changed to protect client privacy.]
James is a middle-aged, married professional with two young adult children. Financially, he is doing well and (as is often the case in recent years) he and his wife Margaret [name changed to protect client privacy] contacted AFRM because they wanted to reduce their levels of cover.
Their rationale was influenced by a range of factors including wanting to reduce the amount they were paying out in premiums but also because they felt their family’s collective life circumstances had changed sufficiently that they no longer needed James to have the high levels of cover that he did when his children were younger.
Margaret had also re-evaluated how much funding she would require to continue to live comfortably in the event of James’ untimely demise. She felt she simply didn’t need the level of funding his current financial risk management plan would provide.
They met with their AFRM adviser, Chris Wlodarczyk, in mid-2020 and asked to get quotes on new life insurance policies that provided about half as much cover as the family previously had.
Naturally, Chris walked James and Margaret through every possible scenario to ensure they had thoroughly thought through their decision.
Ultimately, Chris followed the direction provided by his clients and sought quotes for potential new policies for James.
After several months of consideration and comparisons, James locked in a new Agreed Value Income Protection (IP) policy, which included a Critical Illness Option, after going through the full medical disclosure process at the time of application. By this time, it was late in the third quarter of 2020.
Fast forward to late February, this year, and James called Chris to let him know he’d just been diagnosed with prostate cancer, and he’d be seeking to schedule surgery as soon as possible.
Chris immediately triggered the claim process by flagging the situation with the insurer advising that the biopsy report showed the maximum possible “Gleason score” of seven. In Chris’ view, this diagnosis would certainly mean that James’ condition would fit within his policy’s “Cancer (excluding early-stage cancers)” definition. He asked the insurer if it agreed with his own interpretation of the policy wording so that he could progress a formal claim as soon as possible.
It seemed to be a fairly straight forward claim process, however, there was a delay in James completing the claim forms because, sensibly, he took several weeks to choose the surgeon to perform his operation.
Between March and June, a number of things happened, including:
Chris advising James of the appropriate medical practitioners to complete the relevant claim medical reports and also informed James he didn’t need to wait until after his surgery to formally file his claim.
James undergoing surgery in April
AFRM Claims Manager, Anthony De Lellis, was appointed to take over the management of James’ formal claims process.
A significant factor in the handover notes provided by Chris was the fact that only a couple of months after securing his new IP policy, James discovered that his now deceased father had survived a bout of prostate cancer back in the early 2000s.
For those not aware of the significance of this scenario, to summarise, when assessing an application for a new insurance policy, the insurer seeks to know all significant medical issues in the family’s history as a means of determining the level of risk they are taking on. The person applying for insurance has a duty to disclose all relevant information requested by the insurer ‒ but only to the extent that the client is reasonably aware of the information to disclose.
Using his decades of claims management experience, Anthony anticipated that despite James being unaware of his father’s medical history at policy commencement, the insurer would still thoroughly investigate the circumstances around this Critical Illness claim, as they have every right to do.
Accordingly, he worked with James over a period of months to ensure every possible medical report was sourced and provided to support his claim.
Also, at the time of first filing the completed claim forms and initial medical reports in June, Anthony advised the insurer of the additional family medical history regarding James’ father and confirmed that James had only discovered this information about six months after securing his new IP policy.
Anthony’s foresight was vindicated when the insurer soon after requested James’ Medicare claims history for the three years prior to his claim (suggesting the insurer was seeking to check if there had been any omissions in the information provided at the time James first applied for the new policy in 2020).
As part of its due diligence investigating the claim, the insurer also asked that James produce a copy of his original policy document with all of the terms and definitions included.
Anthony advised James that if he could not locate a copy of his original policy document, the best course of action to expedite his claim would be to complete a Lost Policy Statutory Declaration Form as soon as possible.
These are the kinds of technical issues that AFRM claims managers are aware of that help ensure the swiftest possible outcomes for our clients.
By this time James was also attuned to the insurer’s due diligence process, so when he provided AFRM with his past three-year Medicare claims history he added to that a full timeline of all of his interactions with medical professionals not only over the requested time period but also through to his prostate surgery in 2021.
He also inserted into that timeline the date of his discovery of his father’s history of prostate cancer and how that influenced subsequent follow-up visits to two separate urologists that eventually led to his diagnosis.
When AFRM’s Anthony De Lellis submitted the requested three-year Medicare claims history to the insurer, he went above and beyond with the documentation and information provided. In addition to the Medicare claims history document, Anthony also submitted primary documents including:
an MRI scan,
four years’ worth of blood test results from 2018 through to 2021,
a copy of the original referral from James’ GP to an urologist back in 2018
five separate medical reports from two separate urologists dating from 2018 through to late 2020; and,
James’ timeline of all of his interactions with medical professionals from 2018 through to his surgery this year.
When Anthony followed up with the insurer two weeks later, he was advised the insurer was comparing medical information provided at the time James applied for his new policy with the Medicare claims history ‒ and further ‒ it had also contacted James GP direct seeking a further report.
By August 2021, AFRM’s Anthony again followed up with the insurer seeking an update on progress of the claim, only to be told that the insurer was still awaiting the additionally requested report from James’ GP. Anthony immediately advised James, who of course, followed up with his GP.
A further two weeks later, the insurer advised Anthony that the claim file had been referred to the insurer’s underwriting team to review the disclosures made by James at the time of making the application for the new policy.
These kinds of interactions with insurers demonstrate why AFRM claims management service protects its clients from suffering undue stress and anxiety while they are rehabilitating after serious illness.
Jump forward to the end of August and the insurer finally advised Anthony that James’ Critical Illness claim had been accepted and was awaiting final authorisation.
A week later, Anthony again followed up with the insurer seeking an update on when final formal advice would be provided confirming when the benefit would be paid and the benefit amount.
Almost exactly one hour later, the insurer provided Anthony with the formal payment letter for James, which stated he would be receiving a benefit payment of about $300,000, representing a full settlement of his entitlement under the policy.
Of course, Anthony immediately advised James of the news, plus he advised that there would be an additional refund of premiums to come soon after [about $1500]. Anthony also asked James to note that his policy did have a “Buy Back” option that was detailed in the formal payment letter from the insurer.
The next day James was able to confirm that the funds had been deposited into his account, adding:
“Thank you very much for handling this for me!”
James’s gratitude also extended to his AFRM adviser, Chris Wlodarczyk, whom he contacted soon after, requesting further advice relating to his financial risk management plan and related insurance cover into the future.
Thank you very much for setting up my insurances in the first place and then for your help during the initial stages of the critical illness claim which has just come through successfully. I really appreciate your help!
I'd like to setup a meeting with you to discuss the next steps. That is, in terms of an understanding of what's the current situation regarding the covers I still have (if any) and what would make sense for the future….
Thanks again and best regards,
Chris subsequently shared news of Anthony’s successful claim management with rest of the AFRM team to acknowledge a job well done.
…It was a tricky one given that the policy went into force just recently and the client had some medical checks around time of application.
Just wanted to make you aware of Anthony’s great work and another claim paid.
For Anthony, the key to the success of the claim was assessing the unique circumstances of James’ situation, having a relatively new policy, and also discovering the family history of prostate cancer only after he had gone through the discovery process while applying for the new policy. Anthony anticipated intense scrutiny of James’ medical history.
“Basically, I took my AFRM Claim Manager hat off and put on my insurance company Senior Case Manager hat on,” Anthony said when all was said and done.
“Based on my background, knowledge, and experience, I knew that we needed to request additional medical information from the James’ GP above and beyond what the insurer had already requested, and I explained to James that we would also need to request from all of his medical practitioners’ copies of all of his clinical notes for the past three years, including all blood test results and medical reports.
“This allowed me to undertake the full assessment of his claim and to review the underwriting/disclosure aspect of his claim. And upon receipt of all the clinical notes, I was satisfied that James had no disclosure issues that could warrant any further investigations and that the client’s claim would be approved by the insurer.”
“I explained to James that while the process of gathering all of the additional documentation might be time consuming at the outset, it would ultimately save a lot of time with the insurer in the long run. I also let James know that the entire claim process required the insurer to undertake all possible due diligence while assessing his claim ‒ which they certainly did,” he quipped.