Income Protection - Claims Education

It goes without saying that people making complex decisions about their financial situation –mortgages, pensions, savings, insurance or any other aspect – should be encouraged to seek the advice of a qualified professional Adviser.

Consider the impact on someone’s financial situation should they be unable to work and be forced to rely on Statutory Sick Pay of £95.85* a week, or if that is not available, family and friends.  For the vast majority, this would represent a significant fall in earnings, and most would struggle to make their mortgage or rent payments, let alone other essential outgoings such as food or heating.

When it comes to sales of Income Protection, one of the most important things to consider is ‘will my claim be paid?’

Cirencester Friendly has been publishing detailed Claim Statistics for the last decade and consistently reporting over 94% of claims paid out annually.  They believe that it is not the frequency of reporting the results, or in fact the overall figure that is of most importance, but the transparency that is applied and demonstrated to Advisers and their clients that is most valuable.  Having been at the forefront of publishing detailed claim statistics for the last 10 years, the Income Protection provider has developed a transparent and accessible way of demonstrating how it reaches its overall percentage of claims paid to provide a deeper understanding and to help Advisers avoid their client’s claims being declined.

Many of the reasons for claims being declined stem from the original application form, so it is worth looking at the potential obstacles and how they can be avoided.

First and foremost, it is essential that clients fully disclose their medical history.  Failure to do so means the cover they take out may not be appropriate and could result in any claim not being paid due to non-disclosure of pre-existing conditions.  The use of tele-interviews by skilled nurses certainly helps to elicit the necessary information and as an additional bonus, it can save the Adviser considerable time.

Advisers should also ensure that their clients are paying for the correct level of cover and are aware of how much they will receive in the event of a claim being made.  Care must be taken to fully understand what other continuing income would be paid and whether this is from their employer, other similar insurances or even the State.

Health, lifestyle and finances may change so it is important that Income Protection contracts are reviewed annually to ensure that they continue to meet needs and requirements.  I would encourage Advisers to do a full cover check with their clients at each review, especially as some providers are regularly adding additional benefits and rewards after the contact may have commenced.  Many contracts have a degree of flexibility and include valuable facilities such as Guaranteed Insurability Options where cover can be increased without medical evidence following lifestyle events, such as marriage, promotion or moving to a new home.

Lastly, clients need to be aware of what is required when making a claim.  Being up to date with premium payments and submitting the proper documentation such as proof of earnings and medical certificates is vital to a swift and successful outcome.

People turn to their Income Protection providers when they are at their most vulnerable.  The last thing they need is to find out that their claim has not been accepted due to something that was easily avoidable.  By ensuring your clients are fully educated and the cover is appropriate and checked regularly, there is no reason why all expectations should not be met.

Cirencester Friendly is committed to supporting both Advisers and their clients at a time when it is most important.  By sharing claims statistics, we feel it can help Advisers make informed decisions when selecting Income Protection, and ultimately, help clients ensure that the claims they submit are valid.

For more information on our claim statistics, take a look at our Claim Statistics Card or call our Sales Team on 0800 587 5098.  They will be happy to talk you through our range of products and tips to recommend them.

David Macgregor, Commercial Director at Cirencester Friendly