Jon-Paul Hale returns for part two of Disability Benefits

Rather than make comments on the original article, I’ll expand things here, as it’s important for everyone.

First, a few acknowledgments:

• Thank you to Paul Flood for your help after the last article. Your insights about pass backs were valuable and became a key point in my later discussion with Fidelity Life.
• Thanks to Fidelity Life for recognising the issues and coming to the party.

Fidelity Life has now addressed the rehab and retraining issues I raised.

Here’s how the conversation went:

* Can we have these?
* No.

* Ok, can you explain why we can’t have these?
* It’s Fidelity Life’s discretion, and we’re not providing them.
* Ahuh, so we’re doing it the hard way. (refer to the previous article)

Further to the complaint I raised, the answers above were not the company line; retraining and the reversal of those answers have been actioned by Fidelity Life.

Thank you; our mutual client has been overjoyed with the resulting engagement.

Now to the second bit, the start of the benefit payment period. Which got a few comments along the lines of: "That’s how it’s supposed to work”.

And I stated early on in the piece that “I’ve been caught on this hop with this too”. Sometimes I’m mistaken, but not often wrong. In this case, I didn’t have it right, but that, too, may have helped the client without my insurer having to respond.

To be clear, there was no opportunity for me to “fix” the coverage issues for the client before they were disabled, as they were disabled early in the advice process, before recommendations could be made.

Two main factors led Fidelity Life to change their approach:

1. Four and a half years ago, I outlined in writing what the plan was by withdrawing the disability claim and continuing the waiver claim.
2. Pass backs applied to the benefit changed the basis of the definition of date of disability to the original policy wording.

On the first point, since Fidelity Life didn’t correct the misunderstanding back then, our approach has some merit. It doesn’t fully change how the date of disability is set, but it does introduce an important consideration with pass backs.

Between the policy commencing and the date of disability, Fidelity Life added a clause stating that, in the situation of a retrospective claim, they could determine the date of disability from the date the client submitted the claim.

(The internal review team missed this detail when they reviewed my concerns about the payment term).

For many advisers, the ability to set a retroactive date can be a problem if a client should have claimed years ago. I had a case like this with Fidelity Life early in my career.

However, in this situation, we needed Fidelity Life to have the discretion to apply the income protection claim from the date it was resubmitted.