Insurance transforms end-of-life care

For Insurance Market adviser Johny Winstone, there are a number of impactful insurance claims his clients have made that stand out.

One case, a middle-aged woman with terminal illness, particularly sticks in his mind. “Once the terminal illness claim was approved, the [life insurance claim] was settled inside three days,” he remembers.

“She was quite a traditional Japanese lady who wanted to be in her own home – she and her husband decided at that point in time to use the life insurance payment in a completely different way than it was originally set up, as many people do.

“They were spending close to $40,000 a week on at-home equipment hireage – she was so susceptible to illness that they had to sterilise the house four times a week.

“When her husband wanted to take in meals or whatever it might be, he had to put on basically a hazmat suit because she was so unwell.

“What stood out was that it would never have been an option without that life insurance payment. Ultimately, they were able to fulfil what her wishes were at that point in time. It was really special to be part of.”

She also made use of medical cover, claiming close to $160,000.

“Treatments, specialist consultations, non-Pharmac medications that were $10,000 a week. The insurer was incredible that process. It took a bit as these things do to get the claim approved but once it was open, the red carpet was rolled out by the insurer to totally support the client. It was great to see they didn’t worry about any of the medical implications to try to get the support they needed at that point in time.”

In another case, a client in his late 40s was diagnosed with terminal illness “basically out of nowhere, with no precursory markers or anything like that”.

The man and his wife had intended to buy a motorhome when they retired and drive around the country.

When the illness changed the plan, they used an insurance payout to make it happen earlier.

“They went out and bought the fanciest motorhome I’d ever seen. They got to use it a couple of times before he ultimately came back to deal with the reality of the situation.

“I went and saw the widow about six months after he passed away and made a comment about the motorhome parked in the driveway – ‘it’s pretty massive’, that sort of comment.

“She said it was a waste of money so I said I bet it helped make the most valuable memories she’d had. She said she could never replace those memories.”

But sometimes it’s the claims that almost could have happened that stick in his mind, too.

A friend suffered a stroke after 18 months of discussion about whether he would add another $1 million of cover to his trauma policy. “Ultimately he didn’t get around to doing the documents despite lots of follow-up and offers to come to his house to fill them out. He says to me ‘let that be the story you tell your clients, by not filling in this paperwork it cost me $1m’.”

In another case, a young couple on a tight budget opted for life and trauma cover for the man but only life cover for the woman. Six months or so later, she was diagnosed with multiple sclerosis.

“Fortunately she had Ultracare 400 in place so she’s been looked after well from a medical standpoint ever since. The claims that could have happened are the ones that stand out sometimes more than the ones that did go through.”

Winstone said people often were not aware of what they could have claimed for.

“One of the questions we ask every review is have there been any health events over the prior 12 months, or between catch-ups.”

In one case, he had a meeting with clients he had not been able to engage with for a while. “I said ‘how’s the health been’ – he’s a mid-50-year-old man who had a lifestyle block and market garden in Kumeu. He goes ‘I’m still 10 foot tall and bullet proof’ – his wife just booted him under the table and said ‘what are you talking about you had prostate cancer?’”

Winstone said the couple had not claimed because the man did not think it was serious enough.

The information was collected and sent to the insurer and a payment was made on their trauma policy.

“They were past the point where they needed financial support. I remember him clearly going ‘that’s good timing for my daughter, I’ve got to pay for her wedding in a few weeks’ time. It was pretty hard case.”

Winstone said advisers just starting out might underestimate the extent of the emotion involved in the role.

“I always get pretty emotionally involved in clients claims.”

In the case of the Japanese woman, her husband did not have anyone else he could talk to who was familiar with what was going on, saw the financial situation as it was and could be a neutral sounding board.

“Friends are there to provide support for them, doctors are there to provide support from a medical standpoint, we sit in between in a position where we are just getting entrusted with so much information and confidence in us, they can unload their worries and information and we’re there to listen.

“I don’t think there’s enough preparation for new advisers to be aware of how involved sometimes claims can be, that experience builds over time.”

Winstone said an adviser could be there to offer guidance, and be the first option for a response when an insurer needed more information, to reduce the pressure on clients at claim time.

“A number of clients call us, they don’t know which way is up and they’re dealing with high emotions, they’ve never been through the process before.

“We’re giving them guidance on what will be required and indicating what the timeline is going to be. Advisers work in the background to minimise additional pressure being put on a household when they’re dealing with something so significant.”

He said advisers could also make a difference at the outset, to get the most appropriate cover in place.

“If a client has gone online to take out a policy they weren’t familiar with in most cases they will accept what’s been given to them. An adviser is going to challenge every case that’s come back with modified terms on that policy.

“They can also show the client while they might have applied at provider A there might be B, C and D that can be considered. It might offer a more favourable outcome. I always say to clients arguably you’re going to be in the best state of health and mind right now than you will ever be, now is the time to make sure the policy is set up correctly to protect you if one of those things changes.”