Recent reports that lawyers have been increasingly acting for clients during a claim could indicate that advisers aren’t doing enough to advocate for their customers.
This information comes despite all major life insurance companies reporting large increases in claims on disability and income protection rather than the traditional end of life insurance.
General manager of dealer-group Affinia, Craig Parker, said that the ratio of living to death benefits now sits at a historic high.
However, he said he was concerned that many risk advisers were not stepping up to advocate for customers at claim time.
“The increased involvement of lawyers in claims is worrying because this is a role advisers should be performing on behalf of their clients. The involvement of a lawyer will not influence the decision of an insurer. Claims advocacy is the role of the adviser.”
Parker told Wealth Professional
that the huge increase in claims across the life insurance sector is due to dramatically increased awareness and understanding among consumers, which he said is “fantastic”.
However, he warned that advisers must see this as an opportunity to tap into this growing market by having important conversations with their clients from the beginning, rather than just at claim time.
“If that relationship hasn’t been properly built, at claim time [the client] will go to someone else,” he said. “It’s about making sure the right advice solution is put in place, and when that need is there at claim time the adviser can step the client through the process.”
In this initial conversation the adviser needs to make the client aware of how they can help when it comes to a claim, as well as making sure that the client understands the actual product solution and definitions of what it covers. At claim time the adviser should then be working with the client hand and glove, Parker said.
“The challenge is that from a client’s point of view they only know what they know and if they haven’t been stepped through the right process they will turn to multiple sources. If the adviser is not clearly articulating that right from the start, we’re seeing a missed opportunity.”