It can be hard to get an insurance claim paid. And it can be even harder if you’re a high-net-worth individual. So why would an insurance claim be challenged and what can be done about it?

Insurance brokers resolve claims challenges using a combination of clear communication and attention to detail. In most cases, life insurance claims present fewer challenges than long-term disability claims.

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Most potential issues are headed off while putting together the policy application. Insurance claim managers see non-disclosure at the root of many of the difficulties that arise in the claims process. For example, you go scuba-diving several years before an insurance application is drafted and the broker omits this detail because it seems dated. An insurance company could construe that as non-disclosure and invalidate the contract. Though not a frequent occurrence, non-disclosure of details not connected to cause of death can lead to withholding of payment.

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Delays can also arise if the beneficiary named in a person’s will is not the same individual named in the policy—a situation that sometimes arises when a person remarries. The legal implications vary from province to province, observes Susan St. Amand, a certified financial planner and president of Ottawa-based Sirius Financial Services, but payout delays are possible and may involve lengthy and costly negotiations.

So make sure your wealth manager takes notes about your situation and your wishes, and files them correctly, she suggests. In the event of legal proceedings, the notes and files may prove that you mentioned in conversation your intention to change beneficiaries but had not proceeded, perhaps due to time constraints.

Another challenge occurs when people die away from home—overseas while on vacation or on business. This can require detailed documentation from several doctors or medical institutions in the foreign jurisdiction, a potentially time-consuming and expensive process. St. Amand notes these reports must be paid for in advance. For the broker, that means alerting the estate executor to the possibility of a large bill against the estate and suggesting that the necessary funds be set aside.

With Critical Illness (CI) or Long Term Disability (LTD) claims, problems can arise outside of the actual claims process since a person isn’t always psychologically prepared for a diagnosis of cancer or other critical ailment. A wealth manager can expedite the information-gathering process by obtaining your authorization to communicate directly with the doctor, and providing the doctor or even several doctors with a list of questions to be answered in letter form and attached to the claim forms. “Facilitation of communication between parties is one of the most valuable roles [wealth managers] play at claim time,” she says.

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A disability claim can become a matter of negotiation when it becomes a residual claim. This occurs when a wealthy person suffering from a disability elects to continue working but with a reduced schedule. An individual serving as vice president of marketing and whose ailment impedes his performance in a family firm can make a claim for the cost of hiring someone to assume some of his responsibilities.

Similarly, some ailments that qualify for Long Term Disability, such as Alzheimer’s and cancer, can be progressive, meaning a transition over time from partial disability—during which the individual can delegate some responsibilities. For the broker, this again means guiding the client, or, with the client’s authorization, communicating directly with the doctor about the documentation required.

Claim denied, call in case manager

When an insurer declines a claim you and the broker have several choices, including litigation and case management, which may turn the tide in the client’s favour.

Dr. Raymond Rupert, founder of Toronto-based Rupert Case Management Inc., notes one case where two insurers declined claims for CI and LTD. The client had become confused and unable to work or function well for two years, but doctors had not arrived at a clear diagnosis that conformed to the language of the client’s policy. “He couldn’t remember things. There was clearly a cognitive issue,” Rupert recalls.

Rupert examined “four inches of medical files” looking for gaps in the analysis. Examination of the client’s background revealed a period where he played semi-pro hockey, and received several blows to the head. Medical scans provided evidence of multiple areas of stroke in the brain—he had suffered hockey players’ concussion syndrome. His online journal provided further evidence. “He had developed several areas of damage that were stroke-like and the sum total of all of these strokes was this thinking disorder,” Rupert says.

This work provided enough evidence to underpin the successful claim for the payouts.

Al Emid, a financial journalist, covers insurance, investing and banking.

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