Earlier this year, a 40-year-old client suffered a brain tumour. He survived the operation to remove the tumour although it left him partially deaf in one ear. Over the past decade, we had arranged several critical-illness policies with Skandia, Legal & General and Liverpool Victoria or LV= as it is now somewhat bizarrely known.
I must proclaim that all three providers were more than excellent in how they handled the claim. This was an obviously stressful time for our client and us. The total sum assured exceeded £500,000, making it our biggest claim. I have nothing but genuine admiration and appreciation for how each provider processed the claim sympathetically. The client’s wife was pregnant, so there was added poignancy in the circumstances. Indeed, our client arranged for a private scan to see his baby in case he failed to survive his operation.
LV= was a little slower to pay out than Skandia or Legal & General until our client phoned the claims department with a simple question. With his operation a few days away, he wanted peace of mind that his family would be financially secure. To its immense credit, LV= expedited the claim, calling our client to confirm that all was in order and wishing him luck with his operation.
It is easy for us to fall into a negativity trap about the retail distribution review and farcical Budget announcements but it is only advisers on the front line who really comprehend the value we bring to society.
The regulator will never appreciate what it is destroying until it has been involved in handling a life or critical-illness claim and experienced the difference we make to our clients, their families and businesses.
It is not about charges, commission or initial disclosure documents but ensuring that people carry sufficient protection against the problems life will throw at them and it needs advisers to explain that to clients.
Shortly after his operation, the client advised me of some strange news. He had another critical-illness policy with Standard Life, bought through another IFA, but his claim was declined due to non-disclosure of a knee problem – hardly something that could lead to a brain tumour. When Standard declared the non-disclosure to be “reckless” rather than “inadvertent”, the IFA felt offended that Standard was accusing him and the client of being reckless individuals.
Our client’s gratefulness for the companies that had paid out was tempered by Standard’s decision. Giving up on that IFA, our client sought our assistance. A six-page letter and two months later, Standard agreed with our argument, releasing another £80,000.
I do feel that its initial declinature was harsh and unfair. However, its willingness to listen was laudable and its decision to pay out demonstrated that insurance companies can be approachable and reasonable. Our client was delighted to receive a cheque.
Several months later came another incredible revelation. With no expectation, Skandia issued a further cheque for about £50,000. Apparently, its had not incremented the sum assured several years ago and an internal audit had spotted this.
For every story about insurers not paying out claims, if the mainstream media could publish a story such our client’s, we might just achieve some fairness. Instead, I know of people who have cancelled their policies directly due to adverse media coverage.
In an attempt to redress this balance, I will be sharing this story at the World Critical Illness Insurance Conference in Toronto in April 2008 (www.criticalinsurance.ca) and my client will also be speaking so that delegates can hear it first hand.
Bhupinder Anand is managing director at Anand Associates