A few weeks ago, a woman sued Irish Life over an alleged failure to pay an income protection claim. The case was eventually settled out of court. For sick clients, this is a nightmare scenario, you are unable to work, your income has stopped and you make a claim on the insurance policy that you have been paying into for years. So what is the process if you have to make a claim under an income protection plan? And what is the likelihood that they will actually pay out? I look at the three insurance companies I use for income protection; Aviva, Friends First and New Ireland.
Medical evidence is required to prove the disability. This may include GP/ consultant reports.
Additional medical tests may be required (at Aviva’s cost).
Evidence of current earnings is required to make sure they justify the insured benefit benefit payable. For self-employed, it is the average earnings over the previous 36 months prior to disability. For company directors/ employees, it is the average earnings for the previous 12 months.
The client completes a claim form. At the same time, Friends First will also send a form to your GP to complete.
Your claim is assigned to an assessor who will be your sole point of contact for the claims process.
They will contact you over the phone to go through your claim.
If it is a straight forward case, this will be sufficient.
If it is more complex, they will write to the consultant and may send the client for additional medical tests.
Evidence of current earnings is required to make sure they justify the insured benefit benefit payable. It is the average earnings for the previous 12 months.
Complex cases may also be referred to their Chief Medical Officer (who is a practicing GP) to make a final decision.
You are sent a claim form. When it is received back, the will go over your claim on the phone.
Within 3 working days, they will seek reports from your GP/consultant for medical reports for evidence of claim.
For more complex cases, an independent medical will be required.
Evidence of current earnings is required to make sure they justify the insured benefit benefit payable. It is the average earnings for the previous 12 months. If you chose the Confirmed Income Option at the outset, that income will be used.
If you submit your claim in plenty of time (after 8 weeks if you have a deferred period of 13 weeks), New Ireland will start paying when the deferred period ends, for up to 3 months payments, even if the underwriting process has not been completed. Even if the claim is unsuccessful, they will not ask for the money back.
92% of claims are paid out.
New Ireland provided some very interesting statistics on their claims:
The average age of income protection claims in 2014 was just 42 years of age.
26% of claims was for mental illness
25% of claims were for back injury
15% of claims were for cancer
I am a big believer in income protection cover, especially for those running their own businesses. It should be seen as a necessary business expense. The statistics show that the vast majority of claims are paid and a lot of the illness paid out as completely unavoidable.
