Case Study – Interpreting the Policy Intent (Example 1)


In this claims case study, the adviser was able to negotiate an overturn of the insurer’s original decision to decline the claim by looking closely at the original intent of the policy, as well as its literal wording. It demonstrates the importance of building strong relationships between advisers, dealer group management and claims managers.


At a glance

Submitted by: Tony Lye
Company: Aon Financial Planning & Protection
Claimant: Male, blue-collar worker
Claim type: Income protection


In detail

A builder injured his rotator cuff in a work accident.  The rotator cuff is made up of a group of muscles that help move and stabilize the shoulder joint.  Damage to any one of the muscles or their ligaments that attach the muscle to bone can cause significant pain and disability.

Treatment for the injury involved cortisone injections into the shoulder.  While the builder was having treatment he was able to go to work and chose to do so.  But after six months the shoulder was no better.  The builder had an operation to repair the shoulder and took time off work.  It was only after he had the operation that he submitted an income protection claim.

Because of the six-month time delay between the accident and the claim being initiated, the insurer classed it as ‘sickness’, and the claim was rejected.

The Chief Claims Manager agreed with the argument regarding the intent of the insurance policy

However, Aon, through its client advocacy process, approached the insurer to discuss the claim in terms of the intent of the policy; its moral and ethical intent.  The Chief Claims Manager agreed with the argument regarding the intent of the insurance policy and agreed to pay the income protection benefits claimed.

There are more detailed elements involved in this case than the brief summary above, where the insurer could have presented a valid case for denying the claim by applying a literal interpretation of the policy wordings.  Both Mr Lye and Managing Director of Aon Hewitt Wealth Management, Pierre Kraft, have given credit to the insurer for their goodwill in reassessing this and other denied claims in the spirit in which the original policy was intended to protect the client in their time of need.

For another example of how Aon’s client advocacy process worked in favour of a claimant, see also: Interpreting the Policy Intent (Example 2).