In this claims case study, adviser Mark McNeany shares his experience of having to make his own insurance claim, and the impact this had on his view of the advice industry.
At a glance
Provided by: Mark McNeany
Business name: Vertex Group
Date of claim: July 2010
Claim type: Income protection
Mark McNeany has been advising for more than 20 years. He and fellow adviser Chris Steiger have their own advice business, which opened in 2002, called Vertex Group. Together Mark and Chris deliver a range of holistic advice services to self-employed business owners and medical professionals, specialising in risk insurance advice.
In July 2010, business was good and the partnership strong, when Mark was struck down with a mysterious illness. Hospitalised and severely jaundiced, Mark was subjected to numerous tests, as doctors tried to identify the cause of his symptoms. His liver function was 40 times above normal, and he was in very real danger of liver failure.
With no diagnosis and no clear picture of where this acute illness was heading, Mark lodged a claim on his income protection policy. He expressed his relief at having the claim accepted almost immediately, with only minimal paperwork required to receive his first payment. “I wouldn’t have had the mental or physical capability to deal with a problematic claim,” he said. “I was lucky I knew who to call and how the claims process worked, otherwise I would have definitely wanted an adviser to step in and take care of it.”
It was nearly seven weeks later, after seeing a number of specialists and participating in a variety of tests, that a diagnosis was made – acute hepatitis acquired through a ‘mystery’ virus. By this time Mark’s liver function had started to improve. By Christmas he had returned to work part-time, and by March 2011 had made a full recovery.
just as importantly, review your own levels of cover and get them right.
The experience crystalised the importance of insurance in his mind, especially as he was unable to work at all during the illness. “I was probably kidding myself initially thinking I would work from home, because I didn’t feel particularly unwell, I just felt very tired and was quite jaundice,” said Mark, recalling the first few days of his illness.
“I thought maybe I could take care of a few quick emails each day, but I didn’t even have the energy to spend a minute in front of the screen.”
Mark says his own situation also demonstrates the importance of personal insurance for small business owners. Without a regular monthly payment coming in from his insurer, Mark and his family would have had to look to his business for support.
“If you are a small business owner without insurance and you suffer an illness or injury that stops you working, what do you do for income? It could mean drawing down on borrowed funds, if you have access to them, selling off assets, or drawing cash out of the business. Or, if it’s a business where you are one of two owners who participate equally, how can you make a decision to keep paying a salary to someone who is generating no revenue for the business, while the other is running the show? It becomes a moral issue, not just a financial one. Yes, there are alternatives to income protection insurance, but they’re not good ones.”
Mark says he has used his own claim experience with clients to help illustrate not just the value of income protection but the value of holding different types of insurance.
“Initially we find that a lot of our clients don’t quite see where trauma insurance fits in, so my example helps to illustrate that. I was sick, I couldn’t work, so my income protection paid straight away. But if I had taken a turn for the worse, if for example I had required a liver transplant, I had a trauma policy there backing me up which would pay a lump sum to both myself and to my business. And if the worst had happened, I had a substantial amount of terminal illness and death cover.”
Having avoided what could have been a significant trauma event, Mark also believes that insurance plays a valuable role in aiding recovery.
“I was running the numbers every month, and it was tighter than you expect. Going on an income protection claim is an immediate 25% pay cut! I think that if I’d had some insurance but not enough, then it would have felt like having none. I had to focus on getting better, and being with my wife and kids. If I’d had to worry about how they were coping financially, and how my business was going to pay me, my recovery would have been a lot tougher to get through!”
Mark’s message to advisers? Review your clients’ needs regularly and, just as importantly, review your own levels of cover and get them right. “Because when you call on it, you need every cent of it.”