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In the face of unexpected health challenges, having a robust critical illness insurance policy can provide much-needed financial support. However, the process of filing a claim can be intricate and overwhelming. If you’re seeking clarity on how to navigate this crucial aspect of critical illness insurance, you’ve come to the right place.
This post demystifies the complexities of filing a critical illness insurance claim, offering a step-by-step guide to empower you during a challenging time. Whether you’re a policyholder or a caregiver, understanding the nuances of filing a critical illness insurance claim is essential for securing the financial assistance needed to cope with medical expenses and maintain financial stability.
Let’s dive into the essential steps of filing a critical illness insurance claim, arming you with the information and know-how to navigate this process seamlessly.
Critical Illness Insurance Claim Statistics
In exchange for ongoing premiums, your critical illness policy will allow you to receive a tax-free lump sum benefit payment if you are diagnosed with a covered critical illness. You can use the benefit to cover medical expenses, pay for out-of-country treatment, and provide financial relief during a difficult time.
A critical illness insurance policy covers around 25 illnesses, although this varies among insurers. The best part is it doesn’t have to be expensive. In fact, you can get a large benefit payment for less than a dollar per day.
Seeing as how common life-threatening cancer, heart attack, and stroke are, it may not be surprising to see that these diseases make up most of the claims. What may be remarkable is the fact they account for 83% of all critical illness insurance claims!
When it comes to a serious illness, no one is immune, no matter their age. For one insurance company, the average age a policyowner bought a critical illness policy was 43, while the average claim age was 49. Keeping in mind that most people don’t buy critical illness insurance until their 40s, the numbers are skewed towards an older claimant in the chart below:
Statistics show that 2 in 5 Canadians are expected to be diagnosed with cancer in their lifetime, while 9 in 10 Canadians have at least one risk factor for heart disease or stroke. With the chance of suffering a serious illness so high, it is prudent to understand the claims process so you know what to do if you need to make a claim.
How To Make A Critical Illness Insurance Claim
If you have recently been diagnosed with a critical illness, you’ll want to know how to navigate the claims process. After all, a smooth handling of your claim will go a long way in helping to relieve some of the stress you’re feeling at this moment. Here are the steps you need to take to file a critical illness claim in a timely and effective manner.
Notify the insurance company
First, you have to be aware of the time limits. If you read your policy documents closely, you’ll see you have 30 days to submit a written notice of claim to the insurance company. Not doing so doesn’t invalidate the claim if you can show it was not possible to do so. In the event you take a year after the claimable event occurred to inform the insurer, your claim will not be accepted.
When you notify the insurance company, you’ll need to provide the following:
- Your name and phone number
- Policy number
- Name of the insured person as it appears on the contract
- Date of diagnosis of a covered condition
- Type of covered condition
The sooner you notify the insurer, the sooner it can review and pay your claim if approved.
Complete the critical illness claim forms
Within 15 days of receiving the notice of claim, the insurance company will send you the proof of claim forms. Alternatively, you can find the documents on the insurance company’s website.
One of the claim forms is the claimant’s statement, where you describe the following:
- Nature and extent of the condition
- Date of diagnosis
- Specialist(s) consulted
- Tests, investigations, and surgeries performed
The other claim form is the attending physician statement, which is to be completed by your medical specialist. The form the insurer sends you is specific to the condition you are claiming to capture the relevant details.
For example, on the claim form for cancer, you’ll answer questions about the site of the tumour, history and staging, whether it is in situ and other related medical information about the diagnosis.
You also have to sign the attending physician statement, which authorizes your doctor to release medical information, records, or knowledge about you and your health to the insurance company.
As stipulated in the contract, you must submit the proof of claim forms to the insurer within 90 days from the date a claim arises. Lastly, the more complete your answers, the quicker your claim will be processed. Therefore, you should always provide as much information as possible on the forms.
Acknowledgement
Once the insurer receives the claim forms, it will send an acknowledgement letter or email indicating the name of the claims examiner who will deal directly with you.
What Happens After You Claim For Critical Illness Benefits?
After you make a critical illness insurance claim, the claims examiner will review the case. This person will look at the criteria your doctor used to make the diagnosis and compare it with the definition of the condition in your contract. Doctors who work for the insurance company will assist the claims examiner in adjudicating the claim.
Contestability period
A claim within the first two years of a policy’s issue date is examined more thoroughly than a claim for one that has been in force for a longer period. This two-year period is known as the contestability period. It’s in place to prevent someone sick from applying for coverage and claiming immediately.
The insurance company reviews the answers on the application to investigate whether any information was withheld or misstated—intentionally or not—that would have resulted in a different underwriting decision. It will also request copies of your provincial health record to review your medical history. That’s why it’s vital to disclose information accurately and in detail while answering the questions on the application.
Out-of-country diagnosis
If you are not in Canada or the US when you are diagnosed with a covered illness, the following conditions must be met to receive a claim payout:
- An out-of-country diagnosis must be the same diagnosis that would have been made in Canada.
- The diagnosis must be supported by the appropriate diagnostic examinations and any other investigation normally carried out in Canada.
- The specialist who makes the diagnosis must be licensed to practice in the country where the diagnosis is made and must have qualifications equivalent to those required of a specialist in Canada for the condition that is diagnosed.
Approve the claim
The insurance company will approve the claim if your serious illness fits the policy’s definition of a covered condition. Fortunately, 82% of claims in the industry are approved, with valid reasons for the remaining being denied.
Since most claims are for cancer, the pathology report is the most essential piece of evidence. If it supports the diagnosis, you can expect to receive the lump sum benefit payment within two weeks. These claims tend to be the most straightforward.
Some illnesses, like heart attack or stroke, have something known as the survival period. This is the number of days following a diagnosis which you must survive to receive the benefits.
In some cases, the claims examiner may not be able to approve or deny the claim based on the details on the forms. It may request further information before it can make a decision.
Claim denied
Unfortunately, not all claims are approved. 16% of claims are denied, and 2% are rescinded. If this is the result of your claim, the examiner will send you a denial letter outlining the reasons for the denial. Below are three common reasons claims are denied.
Definition not met
75% of denials are due to an insured claiming for an illness that is not covered. For example, a skin cancer claim will be denied if the skin cancer diagnosis is 0.6 mm in thickness because the definition in the policy contains an exclusion for malignant melanoma skin cancer that is less than or equal to 1.0 mm in thickness.
Condition not covered
13% of denied claims are because the condition isn’t covered. For example, some critical illness insurance policies cover four specific critical illnesses—cancer, coronary artery bypass surgery, heart attack and stroke. A claim made under the policy for Parkinson’s disease will be denied.
Voided
An insurance company can void a claim for fraud or material misrepresentation, which happens to the remaining 12% of the denied claims. For example, if you had surgery for cancer five years ago but answered “No” to the health question asking if you’ve ever been diagnosed with cancer, this is considered a misrepresentation and would lead to a claim being denied.
Appeal a denial
Although a claim is usually closed after a denial, you can reopen it by appealing the decision. This can happen if you disagree with the decision and can involve other parties, like your life insurance advisor or lawyer.
Have Questions About Making A Critical Illness Claim?
In today’s unpredictable world, facing critical illnesses can be an immense challenge, both emotionally and financially. Amidst such circumstances, understanding how to navigate the complexities of filing a critical illness claim becomes paramount.
Now that you’re empowered with a clear understanding of the process, you’ll be better equipped to secure the financial support you deserve when facing such challenging circumstances.
Don’t have critical illness insurance coverage yet? Contact us at info@briansoinsurance.com or 604-928-1628 for a free consultation on how it can help pay for additional expenses while your income is interrupted by a serious illness. Or use the form at the bottom of the page to request a free quote sent straight to your inbox.
Get Your Critical Illness Insurance Quote Now
While we make every effort to keep our site updated, please be aware that timely information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Brian So Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser. This post is a brief summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details which can be provided upon request. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.
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