Early last year an old friend of mine asked me for a life insurance quote. I need to take some poetic licence to protect her identity but the main points are clear.
My friend enjoys her work and is always ready to work hard and didn’t want income protection, so I suggested a large amount of trauma insurance. This is a policy that pays out on diagnosis of cancer, heart attack, stroke and about 70 other, rarer but serious illnesses.
What happened next is quite common ...
I followed up a few times and the answer was clear – she wanted to take out the insurance, she simply wanted some time to read through the paper work. A common problem occurred at this point: she got caught up in day to day things and didn’t make the time to do this.
A few weeks ago I got a call that she had been diagnosed with an aggressive cancer that was immediately cut out but, at that stage she didn’t know whether she would live days, weeks, a few years or a normal lifespan.
I asked her whether she had made a will and she started to cry.
At this stage a normal lifespan looks most likely but her risk profile makes her probably uninsurable for the next 10 years.
This is quite a common scenario. The most common time for a trauma claim is 18 months after a policy has been taken out. It is as if people might have some premonition. Some choose to follow it up and take out insurance, some choose not to.
My friend had to go straight back to work, while the trauma payout would have allowed her to take months or even years off to deal with the illness.
Meeting a client with a big cheque from the insurance company is one of the more rewarding moments for an insurance broker. Informing a client that it is now too late is one of the lower moments.
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