Despite the myths, insurers do pay

The mention of the word ‘statistics’ mostly elicits a wide yawn and heavy eyelids. Yet statistical research is vital to understanding New Zealanders and their insurance needs.

Where exactly are the heaviest risks that we need to protect ourselves from? We buy insurances to make sure we have an ambulance at the bottom of the cliff. After all we never know what the heck is going on inside us, do we? More and more, we are taking notice of what we stick in our mouths, in the distant hope that we can live longer and healthier.

Here is a snapshot of insurance claims for the year ended June 30, 2016.

Life and terminal illness claims ● 94.5 per cent of all terminal illness claims were for cancer.

● Death claims for males due to heart issues has increased from 22 to 27 per cent.

● Death and terminal illness claims for cancer decreased from 45 per cent last year to 40 per cent this year.

What does that tell us? Cancer is still omnipresent, but perhaps New Zealanders are taking more notice by adopting healthier lifestyles. In 2010 we were fourth in the world for cancer rates. However, earlier diagnosis, improving treatments and public awareness are helping, but still we are medalists when it comes to skin and bowel cancer. Income protection claims

● 47 is the average age of claimants – 76 per cent were male, 24 per cent female.

● Income Protection made up 18 per cent of all claims, of which 53 per cent were due to illness.

● Muscular and limb injuries made up the other 47 per cent of claims.

● 56 per cent of all female trauma claims were for cancer, compared to 35 per cent of male claims.

● $2.3 million for total and permanent disablement was paid out by Fidelity Life in year to June 30, 2016. This made up 2 per cent of all claims received in that year. Conclusion

Insurance companies do want to pay your claim, if the claim meets the conditions of the policy. Therein arises the notion that ‘insurance companies will weasel out of paying, no matter what’.

Many people simply misunderstand the policy or the conditions around a claim. Having an adviser who understands your policy, the claim process and knows your insurer can go a long way to avoiding the pain of claim. The insurer at that time will ask your doctor for your medical records, so here are some tips:

● Ensure full medical disclosure at time the policy is taken out. If you are unsure, ask the potential insurer to get your medical records or get them yourself and send them to the Insurer.

● Contact your adviser/insurer as soon as you are aware of a potential claim. They will check to see your condition is covered. Be honest.

● See the doctor and obtain a ‘medical certificate’.

● Be honest.

● If claiming under income protection, ensure you have your financials (latest payslips or accounts) available. Self-employed are best to work through a qualified financial adviser.

Once a claim is established, the insurer will appoint a case manager or claims specialist to you or your estate. Declined claims usually arise because of a policy holders lack of understanding of the condition. Your adviser can be your best friend at such times, as they understand policy conditions, and what may or may not be covered.

Policy ownership/Letters of administration/wills

● Will – Insurer needs the Will and Probate

● No Will – Insurer needs Letters of Administration – could take six to eight months.

● Nominated Beneficiary – Payment will be made to the nominated beneficiary (on insurance policy) and not the person stated on the Will – unless a Court order to the contrary.

It is boring stuff, but if something goes wrong, you will be very interested in what you get.

Sources: Fidelity Life, The Guardian.com, World Cancer Research Fund.

Disclosure: Care has been taken to ensure that any information is accurate. No liability is accepted for its use. Enquiries are welcome.

Experienced in lending, risk advice and planning, Allistar Walker is a Registered Financial Adviser, Senior Fellow of Financial Services Institute of Australasia and director of IFL Associates Limited. His full disclosure is available free at www.mortgagehelp.co.nz or he can be contacted at 09 410 6023 or enquiry@mortgagehelp.co.nz Blog site www.alsoup.blogspot.co.nz.