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Client suffered heart attack before signing insurance contract

A woman who had a heart attack before she had signed her insurance contract has made an official complaint about her adviser.

Tuesday, July 2nd 2019, 6:00AM 8 Comments

The woman approached her adviser in 2018 about adding mortgage repayment cover to her existing life insurance policy.

The adviser found a suitable policy and sent her medical information and application to the insurer.

In July last year, the insurer sent back an offer of terms. Over the next few months, the adviser called the client to find a time to discuss the terms of the policy.

The client never called the adviser back to arrange this.

She then suffered a heart attack in October and was unable to work. Because she had not accepted the insurer’s offer of terms, she was not covered.

She said the insurer should have done more to encourage her to finalise her application, and it should have been pointed out to her that the offer was only available for a month.

The adviser should have presented her with the offer in writing, she said.

The adviser argued he had called nine times trying to arrange a meeting.

His impression as that the client was not going to accept the policy because the premiums were too high.

She complained to FSCL, which found the adviser did not keep file notes of his calls to the client.

“This was concerning, as he could not show what he had discussed with [the client]. The adviser was, however, able to produce phone records showing nine calls from his number to [her] mobile phone.”

FSCL said the insurance advisers’ actions had not caused the client any loss so it recommended she drop her complaint.

The adviser agreed to review his processes and keep better file notes in future.

“If the insurance adviser had kept file notes of his calls to [the client], this would have been a simple case to assess. He would have been able to clearly show he had been in contact with [the client] and had discussed the relevant terms of the insurer’s offer. It is always best to keep detailed records of your contact with clients, so you can show you have complied with best practice if a complaint ever arises,” FSCL said.

Tags: complaints

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Comments from our readers

On 2 July 2019 at 4:17 pm Richard Pykett said:
Exactly why we try to make all client calls from our E-Broker system.
On 2 July 2019 at 6:52 pm Brian W Brown said:
Has the world gone mad or as i suspect this is a story to scare the bejesus out of us advisors.The advisor called the client 9 times over a 3 month period with no reply from the client and according to the FSCL even though the advisor never got to talk to the client he should have been able to produce 9 file notes detailing a non existent conversation, as the phone records with no reply weren't good enough.I was taught never to discuss an offer of terms over the phone with a client as it is a very complex decision.The FSCL obviously deems otherwise if this example is anything to go by.I feel sorry for the advisor and nil sympathy for the client on this occasion.
On 3 July 2019 at 7:22 am I was wondering said:
Is this even a story? How can you discuss terms with a client who won't call you back? If she hadn't had a heart attack the adviser would still be waiting for her reply. Silly woman was the author of her own misfortune.
On 3 July 2019 at 10:06 am Bikedude said:
Not at all surprising in this day of "it must be someone else's fault even though I have responsibility for it."
On 3 July 2019 at 1:39 pm all hat, no cattle said:
Adviser's records seem perfectly adequate to me.

Adviser knew he had made 9 attempts to contact client regarding needing to present terms.
Understood client was unimpressed with loaded premiums.
Client did not respond or meet.
Client did not in fact accept the terms.
Client outcome was result of client action/inaction.

End of story.

The right outcome.

If the client doesnt answer the phone or agree to a meeting, then what "discussion" does one enter into one's "file notes" ?

Should we perhaps be concerned that this DRS seemed to struggle to come to the correct outcome here?
This is not so much a matter of "best practice" as it is a case of a ridiculous claim not being emphatically sent packing and instead the scheme finding whatever nits they can pick.
On 3 July 2019 at 3:06 pm kickarse said:
Better believe this is true, I know the adviser , They went out thier way to help the client with the Travel Insurance claim, consoling the Partner and family just to be have the complaint, This went through to the directors decision and it cost the adviser $2600 and a hell of lot of angst because the client never toke personal responsibility to say yes to the insurance.
On 3 July 2019 at 8:30 pm Ron Flood said:
Am I missing something here?
"If the insurance adviser had kept file notes of his calls to (the client), this would have been a simple case to assess. He would have been able to clearly show he had been in contact with (the client) and had discussed the relevant terms of the insurers offer".
What a load of rubbish, and these are the people who assess claims.
He never made contact with the client, as she took it upon herself to ignore his phone calls. Therefore there was no record of a non existant discussion.
Yes, he should have noted the calls(unawnsered) in the clients file, but how could he record something that never happened (conversation with client).
On 4 July 2019 at 10:03 am Tash said:
My advice to all advisers. Do not join a DRS becuase it is less expensive than the competition or for any other essentially irrelevant reason. Join one with people who understand the life and health business, insurance principles and products and who are courageous enough to make sensible calls, not just virtue signalling!!!

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