Getting advice can make (or break) your TPD & Insurance claim

Published 03 Jan 2018

There are many cases where persons have changed their Insurance and Superannuation, from time-to time, having been sold by Customer Service Specialist, in reality salespersons, when attending a bank branch or get called. Many takes up the pitch to transfer the superannuation or changes their insurance. This is all done on the phone, on the internet, or just by filling in a couple of forms.

Most do not experience any difference afterwards. However there have been many horror stories of very negative outcomes – where things take a turn for the worse and the new superannuation and insurance did not account for it. One is left in an even worse situation. The problem however is that there is no real solution once the problem has occurred.

For many the first instinct is that the Customer Service Specialist is at fault (or their employer e.g. the Bank), however this is usually not going to be accepted by a court. The Specialist would most likely in pitching the new product made multiple disclaimers that they are not providing advice, and then there are the disclaimers and waivers on the forms, and on the material confirming the change there are more caveats – they might have even suggested seeking financial advice with their company (which would have been very expensive).

Most of us would have not paid attention to these, but this would have absolved the Specialist from any responsibility when the product does not match up with our needs or circumstances. However this is more than “fine print”, as the Specialist has effectively “warned” us we should seek financial advice – and if we don’t then they would say it is our fault. The law would most likely agree that we were the careless ones, and “beware the buyer”, and this can have a horrible impact on an insurance claim.

The most common situation is in changing the policy it created a pre-existing condition. Many of these kinds of policies have a blanket catch-all clause which could mean any condition - even if not discovered until later - you had prior to the new policy starting is excluded. Changing insurance policies - or superannuation funds which has insurance - may potentially turn an insurance policy into a dud.

For many, this would never become a reality, but for those who find themselves in dire circumstances because of illness, and to learn that the policy has become a dud, is clearly further insult on injury. Worse is that the loved ones are also more negatively affected as a result. Legal (and Financial) advice often seems to have little value – when things go well – however it is often the case that many could have avoided a horrible situation by seeking advice and making plans at the get go.

At Gerard Malouf & Partners, our lawyers have expertise in Insurance Policy claims and advice, particularly TPD and income Protection. Should you have a dispute or which to make a claim on insurance, please do not hesitate to contact our firm for a free consultation with one of our solicitors.

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