Monday, August 31, 2009

Money not equal to guaranteed insurance cover

In an application form to get more insurance coverage, it contains many questions ranging from personal particulars, existing insurance coverage, current health condition, past medical history as well as family health background, etc.

I'm always worried whenever I encounter a client with pre-existing conditions, negative family health background or client having some sort of surgeries before. There can be a lot of work involved ranging from applying with different insurers, arranging client for medical check-ups, insurers requests for questionnaires and medical report from specialist, etc. End of the day, the chance is high that we don't get anything for all the time spent.

Many clients will give up the application along the way as there can be a lot of inconvenience caused over a period of time. It can also be a challenge to convince the client to take up the plan with a loading or exclusion.

There are a few reasons that they give up.
* They don't believe that their condition is an issue and its an over-reaction by the insurance company to request for this and that.
* They do not see the urgency to get the insurance done. They feel that it is too troublesome and time consuming.


I just like to share a few of my recent cases:
a) Mr "A" got an insurance plan for his daughter many years back but not convinced to get his own coverage at that time.
* When he is finally convinced and sign up some plans with me, I got to know that both his parents contracted Colon Cancer at the same time few months prior me meeting him.
* As he had automatically fall into a high risk group for colon cancer due to family history, the insurer excluded Colon Cancer for his 30 Critical Illnesses Coverage even though he went to check-up to prove that he is perfectly healthy.
* Mr Lim decided not to take up this plan with me as he feels that he is healthy and not convince with the exclusion.

b) Mdm "B" applied for a health and term insurance with me. She has fibroid at her ovary and she go for check-ups yearly to monitor the fibroid.
* As her fibroid is still in her ovary and there is a need to monitor the situation regularly, the insurer decided to exclude Ovarian Conditions for the Health plan and to exclude Ovarian Cancer for her term plan.
* She is not fully convince and deciding if to try more insurers. I don't think any prudent insurers will want to put her as a standard case.

c) Mdm "C" applied for a Savings Plan for her Son. A premium waiver rider is attached to it. She has thyroid problem since 2 years ago.
* She was asked to go for a medical check-up and subsequently had a premium loading of $2/mth to the current $4/mth premium.
* She insisted that Thyroid is very common and minor and the insurer should not load her. She is not very happy with the insurance company and deciding to carry on with the plan despite it is a very small loading.

d) Mr "D" applied for a term insurance with 2 insurers. He is a Hep B carrier.
* He was asked to fill up several questionnaires, to go for check-ups by 2 and to extract medical reports from his specialist, etc. It was a lot of work.
* The 1st insurer had rejected his case and he was very upset as he claims that Hep B is common and there is absolutely nothing wrong with him.
* He seems very frustrated with all the forms the insurers sent him and he may give up anytime soon with the 2nd insurer.


These clients, when encountered with resistance from the insurers are normally quite upset and disappointed with the insurer. They feel that there are nothing wrong with them and their problem is a common problem. They feel very troublesome to buy insurance when asked to go for medical check-ups, requesting for reports and ended up having an exclusion or premium loading.

I know all these problems are common and seemingly small, but the insurance underwriters normally look at a more statistically point of view and over a longer term period for consideration. If they see the condition to be an extra risk, they have to do something.
Of course, when it seems unreasonable, I'll try to fight for my clients rights but when it simply seems too logical, I have to try explain to my client on the needs or to find an alternative for them. I represent 10 insurers, I can't be submitted 10 insurance proposal for them.

Pls don't take insurance for granted. Its can be a lot of work before you can be insured. Its not something that you can buy even when you have the money. Your health condition probably looks small to you but you may not know how the insurance underwriters look at it. Get it when you are in the pink of health!!!


Anonymous said...

These clients of yours deserve it

Anonymous said...

Adrian, thanks for your sharings. Based on what you have described, I think the crux of the issue is that your clients' trust and respect level on you is not that high. You may wish to better sell yourself first before you try to help/sell them. Think of ways to increase your credibility and visibility. Blogging here is a good start, but not good enough. Having done that, clients will respect you more, and you will have lesser probelms i.e. getting them to do ME etc.

As an advisor, you must do a very good job in persuading them to take charge of their own financial furture and in helping them to take the 'medicine' you prescribed, failing which you are doing them a great disservice by exposing them to the risk involved. Of course, you can ignore those smartasses. You must make known to your clients what they are in. They should be more concerned about getting the solutions than you. People say when the advisor needs the commission more than the client needs the product, both the advisor and client are in trouble. Don't worry, keep doing what you are doing, and your well shall not run dry. There will be more people willing to refer their loved ones to a dependable advisor like you than those looking for sleazy saleman.

Anonymous said...

You should conduct a preliminary underwriting on behalf of your client. This way you will know roughly whether the case may be accepted or not and by which insurer.

When you do the actual application and get rejected, this will leave a record with the insurer. This sort of undesirable record will prevent your client to be accepted by other insurance co.