Altrisk pays R8 million on early death and monthly income protection claim
In the life insurance industry, an ‘early’ claim is classified as a claim on a policy that has been in force for anything less than two to five years depending on the insurer’s practice. An early claim understandably raises some flags for the insurer to validate that all the pertinent facts were fully disclosed by the policyholder at the time of buying the cover.
"This scrutiny is important to ensure that the burden of unjustified or fraudulent claims is not unfairly born by the insurer, and indirectly, the rest of the insured pool of clients. In such cases, insurance companies will investigate the cause of the claim in great detail, and call for medical and other records to ensure that pertinent facts were not deliberately withheld by the policyholder that could materially affect the insurer’s decision to provide cover for the client in the first place. Although early claims are not a problem if everything is found to be in order, potentially the investigation process can take a considerable amount of time, during which time the policyholder and beneficiaries could be without any income or financial support,” explains Susan Gonnermann, head of claims at Altrisk, a specialist niche risk product provider.
“We’re very aware that a crisis can happen in anyone’s life, at any time, and that early claims can and do happen legitimately. Altrisk’s ethos has always been that we are in the business of paying valid claims and that we will always do what is fair to our clients. It is one of the reasons why we do such thorough underwriting at the time of the inception of a policy, to ensure that clients enjoy a smooth and fair claims process. An early claim investigation is dealt with as quickly as possible to ensure that we don’t compromise clients and their loved ones who may be caught up in the administrative red tape of a complex claim, and left to struggle financially,” explains Susan.
This is exactly what happened with an Altrisk client who was struck with cancer and claimed on his monthly income protection policy little more than a year after its inception, and soon afterwards, on the life policy.
“In this instance, the client had taken out the life cover and monthly income protection benefit with Altrisk in May 2012. Just 16 months later, he was diagnosed with cancer. Unable to work, the client claimed on the income protection benefit which paid out R100k every month, for seven months until he tragically lost his battle with cancer and passed away at the beginning of April 2014.
“Only one week of the monthly income protection benefit would have been payable for April, but our policies allow for the full benefit of R100k to be paid to ensure that his wife was taken care of while the necessary paper work was being done for the death benefit to be paid. With all the comprehensive information on file from underwriting and claim stage, we were also able to pay the full R7.3million life cover just weeks later on 5 May. In fact the delay came from the many public holidays over the period and getting all the necessary paperwork sorted, rather than from any delays pertaining to the early claim investigation,” explains Susan.
The bottom line is that claims always need to be handled efficiently and with delicacy, because they invariably occur at a stressful and emotional time. Straightforward claims are the easy part. But when it comes to more challenging ones, the question to ask is whether the claims policy is based on fairness and solid ethics, and whether claims assessors make every effort to pay claims quickly? The burning question when assessing any risk product provider is whether its claims ethic is defined by what the book of rules tells them to do, or doing what is morally the right thing to do.
