Super fund admits claim after adviser speaks out

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There has been a successful outcome for one of the industry super fund cases which adviser Melinda Houghton spoke out about last week.

Since Wealth Professional covered the story a week ago – about a terminally ill woman whose claim was put on hold until she could provide the fund with company information (which she did not have as a sole trader) – Care Super reassessed the case and admitted the claim.

Houghton was told on Friday the woman’s medical bills will be paid by Care Super within 10 days.

Care Super CEO Julie Lander told Wealth Professional often advisers have more information to act on than them and the fund is happy to work with external advisers in this regard.

“Having read the case raised by Melinda Houghton, I rang her personally last Friday to clarify the circumstances of her client. I concur that the insurer had asked for some information that was not relevant to this member’s claim.

“Unfortunately in this case, claim forms were sent to the member in March 2013 and follow up letters were sent in April with no response being received. This can occur if people are making a recovery. 

“The next we heard was via Ms Houghton who completed the forms on behalf of the member in November 2013. Had the member contacted us directly and explained her current condition, we certainly would have acted speedily.”

CareSuper takes its role in acting in members’ best interests seriously, and pay eligible claims as quickly as possible, Lander said.

While it is a good outcome for this client, Houghton has not heard from the other two super funds that her clients were having difficulty with.

“I have had no contact from AMIST, or from LUCRF. They are clearly not interested in addressing our concerns,” she said.

A client of hers with LUCRF Super increased his life cover from the default to about $440,000. He was subsequently diagnosed with liver cancer and passed away within five months.

“The superfund held up the claim for 12 months saying because he increased his cover he knew he was going to die,” Houghton said.

According to Houghton, it was only when her firm Houghton Strategic Solutions became involved and rang the super fund weekly that the man’s widow and two kids got a pay-out.

A spokesperson from LUCRF Super told Wealth Professional on Tuesday they were investigating the allegations directly and could not comment immediately, but would respond once enquiries were finished.

In the third case, the mother of Houghton’s young client – who like in all three of these cases became a client after finding the fund would not pay out – had made a non-binding nomination of her super and life insurance of 50% to her second husband and 50% to her daughter.

Houghton said the super fund refused to follow the wishes of a dead woman to grant half her super and life insurance to her second husband and half to her daughter, a 22-year-old single mother who badly needs the money.

Australian Meat Industry Superannuation Trust CEO James Thomas told Wealth Professional he had no comment to make about this case.

 


 
  • Adviser Fred on 24/02/2014 9:53:18 AM

    Insurance claims are complex, and can be tricky. Those with financial advisers are more likely to get a pay out when appropriate, as an adviser can cut through all the tricks employed by some Insurers and Super Funds. This is why the Industry Super Funds are continually waging war on the financial advice industry. They don't want their clients to receive financial advice and increase the chance of having to actually pay benefits.

  • Sean on 24/02/2014 10:39:34 AM

    FPA / AFA should team up and run an ad campaign suggesting that members of Industry Funds who are having trouble getting their claims paid go see a financial planner, who can act on their behalf to ensure they get the payout to which they are entitled. Perhaps the ad could "compare the pair"- an industry fund member v one retail client with an adviser...

  • Melinda Houghton on 24/02/2014 10:44:37 AM

    I would like to sincerely thank Julie Landers from Care Super for following up on this claim and arranging a prompt re-evaluation. The client is extremely relieved that they will have funds to pay for living expenses and medical costs now.
    What is important to note however, is that when a client is seriously and in this case terminally ill, the claims process and forms to complete can be too much and they are entitled to have someone assist on their behalf. This is what happened in this case. This client was not able to contact the fund directly, she was not capable of dealing with this issue herself.
    Care Super have done the right thing here in the end however, and we acknowledge and appreciate that.

  • GAB on 24/02/2014 12:02:14 PM

    I reviewed a clients life cover the other day. A couple of years ago we increased the cover in her industry super fund. To my horror...it is gone, no cover. They have two children and a home loan, one child disabled. Client thinks she got a phone call from the super fund one day about life cover but didn't really understand what they were talking about. The client probably should have asked me at this stage, but the fact is...why can't the client nominate a servicing adviser on their industry super fund? I'm not asking for a trail commission, just would like to be informed about major changes...such as cancellation of Life Cover.

  • Julie Lander on 24/02/2014 3:00:51 PM

    Adviser Fred - we have no issue at all paying out on eligible and legitimate claims. Nor do we have an issue with members receiving financial advice. We encourage them to access advice. Of course we have advisers too! Advisers can also be of assistance in clarifying for a member whether their condition qualifies as being TPD, a definition which some members do not totally understand. No tricks - just obtaining complete information to process a claim.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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