Do you know what is in your insurance policy?
Fair Go and the media regularly cover situations where insurance companies don't
pay out on a claim. Having been an intermediary between insurers and the insured party for 25 years, we have seen very few claims not paid out.
The key is to ensure that you disclose all relevant information (which can be more information than you might think, and it is our role to help you to do this when you are signing up for a life/trauma/health/income protection insurance policy) and that you understand what your insurance policy does and doesn't cover.
The claims that have not been successful for our clients since we have been advising include a trauma claim for a botched stomach reduction surgery (this was over 20 years ago when there were no ICU stay benefits on these policies), trauma claims for pituitary gland tumours - not covered by the definitions, and an income protection for a client with testicular cancer, where he continued to work more than the 10 hours a week that the policy allowed.
Often the terminology used in insurance policies is difficult to understand, which is hopefully where your insurance adviser can step in and assist you. Rob Stock wrote an interesting article on this topic recently on Stuff (click here to see the article - Surprises lurking in your insurance policies).
Some of the things highlighted in this article were these clauses - which mainly apply to Fire & General Insurance policies, but can also apply to Life related contracts:
Criminal checks (policies often have clauses requiring the insured to co-operate with the insurers investigations, which can include providing materials like bank statements, health records and agreeing to things like police checks.)
Insured needs to carry on paying the premium (until the claim is finalised)
No time limits (to handling claims)
Obligation to take reasonable care
What is your 'stuff' really worth? Are you underinsured? Overinsured?
It is worth understanding the policy wording of your policy so that you don't get a shock at claim time (although it is understandable that you may not be interested in the wording until a potential claim is imminent.
There is a big difference in quality of life, trauma, health and income protection insurance, make sure that you talk to your adviser to make sure that you are getting the best value for the money that you are able to spend.