It may seem a silly question, particularly when you have insurance in place and are paying a premium, but it is a question that should be regularly asked when reviewing your insurance benefits.
Two years ago, I met with prospective clients who had what appeared to be comprehensive cover in place for both their business and family. Their policies had been underwritten the previous year and they felt comfortable with the benefits they had and the insurer they were with. They were only meeting with me as their previous advisor was no longer selling insurance and they recognised the importance of regular reviews.
After discussions, several meetings and going through a formal needs analysis with them however it became apparent that there were several potential issues within their contracts
It was decided that applications for the increased covers would be submitted with the insurer. The monthly benefit was increased on their business revenue cover by 150%, and there were also increases made within their lump sum covers. A request to review the previous underwriting decisions was also made to ensure that should a claimable event occur, there was peace of mind that the insurance in place would provide the protection they required. The clients obtained their full medical records from their GPs to assist with this process.
When the assessments had been made, the changes were made to the policies, and again the clients felt comfortable that what they had in place reflected their current circumstances and needs.
A few months after the changes were made, the clients called and advised they were now considering taking up a hazardous past time which they had not participated in for over ten years. They had recognised from the work that was done previously the importance of working with their advisor and disclosing changes like this. It was confirmed that this would not affect their existing covers as they had not been considering this pastime when the assessments were being made. The insurer however was notified, and they also confirmed this in writing.
Wind the clock forward to earlier this year, and it was time to do their annual review of covers and an appointment was made. After reviewing the benefits in place, the clients felt comfortable that there was no need to make any changes to their policies at this time and the sums insured were still adequate for their current needs. The weekend prior to the review meeting however, the client had broken a bone in their new sport and was expected to be off work for at least 6 weeks. They had not considered that there may be possible claim, and I organised another time to catch up to go through claims forms for this. During the assessment of the claim, a question was raised by the claim’s assessor re the previous participation in their sport, as ACC records showed an unrelated injury from this sport over fifteen years previously. The email that had been sent when the client notified me of their changes in circumstances was forwarded and the issue was resolved. The client received payments for the time off work from both the Business Revenue and Specific Injury benefit attached to their personal income cover and the claim was closed.
The feedback received from these clients at this time was that they were impressed with how quickly the claim was assessed and paid and the help I had provided them to make this as simple as possible. They also recognised the value of the work we had done previously to ensure that all disclosure had been made to the insurer.
Move forward another two months, and another significant medical event occurred with the client causing total disablement which could last six months or longer. Without the review being completed eighteen months previously to increase the sums insured, there is a high probability the business would not be able to financially survive the current situation without the owner.
The Business Revenue cover has allowed other staff within the business to step up into more senior roles for which they are being remunerated accordingly for the extra responsibilities they have taken on. The business has been able to employ a Business Coach/Manager to oversee the day to day operation of the business and ensure that both staff and customers work together through this situation, and the business has been able to continue meeting its ongoing financial obligations.
The extra support that the insurer has provided over and above the benefit sum insured, has also made a significant difference to the family and for the clients’ rehabilitation.
A lot has happened since the original benefits were put in place less than four years ago. The overwhelming feedback I have received from the clients is how grateful that a formal review process of their situation was undertaken when we first met, as their situation and outlook today may have been a lot different.
So, the question needs to be asked again
Are you truly covered?
If something unexpected was to happen to yourself or a family member today, would your existing insurance covers meet your expectations?
If you have any doubts or are uncertain what benefits you have in place, I encourage you make the review of your covers a priority.