How a trauma insurance claim is assessed

Trauma cover — also sold as critical illness or living assurance — pays a lump sum on diagnosis of one of a listed set of conditions. The list looks generous and often runs to forty or more conditions. What decides claims is not the length of the list but the definition attached to each item.

Each condition has a contractual test. A cancer definition will specify the types and stages covered and usually exclude or partially cover certain early-stage and in-situ presentations. A heart attack definition will require specified diagnostic evidence. A stroke definition will require neurological deficit persisting for a stated period. These are medical thresholds written by lawyers and actuaries, and the assessor applies them literally.

The good news is that on a trauma claim you are alive, you have your own medical team, and you can influence the evidence. That is not true of a death claim, and it is why trauma claims reward preparation more than any other type.

1. 1

   Notify early

   You do not need to wait for treatment to finish. Tell the insurer or your adviser as soon as a diagnosis is made — it costs nothing and starts the file.

2. 2

   Read the definition before you lodge

   Get the policy wording for your specific condition and read the test. This tells you exactly what the specialist’s report needs to establish.

3. 3

   Complete the claim form and authority

   Your section, plus a medical authority so the insurer can obtain records from the specialists and your GP.

4. 4

   The treating specialist’s report

   This is the decisive document. A report that says you have been diagnosed and treated is not the same as one that addresses stage, grade, measurements or duration of deficit. Where the policy requires a specific finding, the report needs to speak to it.

5. 5

   The insurer’s medical review

   A claims assessor, often with a medical officer, compares the evidence with the definition. On complex conditions the file may go to an independent specialist or to the reinsurer.

6. 6

   Decision

   Full payment, a partial or severity-based payment, or a decline with written reasons. A partial payment usually reduces the remaining sum insured — check whether your policy has a buy-back.

Two timing points that catch people. Most trauma policies have an initial stand-down period after the policy starts, during which certain conditions — commonly cancer and cardiovascular events — are not covered. And some policies require survival for a stated number of days after diagnosis before the benefit is payable. Both are in the wording and both are routine.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• The exact definition of your condition in your policy, not the marketing summary of it.
• Whether the policy pays a partial benefit for early-stage or lower-severity presentations.
• The initial stand-down period, and whether any recent increase in cover restarted it.
• Whether a survival period applies, and how long it is.
• Whether the trauma cover is accelerated against life cover — if so, a payment reduces the life sum insured.
• Whether a buy-back option lets you reinstate life or trauma cover after a claim, and on what terms.

Every New Zealand insurer writes how life insurance claims work to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• An adviser compares condition definitions across insurers before you buy, which is when a definition problem is cheap to fix.
• At claim time they can read the definition against the medical evidence and identify what is missing before it is submitted.
• They know which insurers pay partial benefits generously and which do not.
• They can manage the claim so that you are dealing with treatment rather than paperwork.
• If the claim is declined on definition, they can tell you whether a further specialist opinion would change anything.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.