The actual reason for claims being declined on group income protection is much more nuanced, says Group Risk Development spokesperson Katharine Moxham. “It’s a complex relationship because this is really insurance for the employer. The employer won’t know the individual’s state of health and can’t ask due to the Equality Act 2010, so our advice is to just put the claim through to help them fulfil their duties as an employer,” she says.
“They might know it’s unlikely to be a valid claim, but they want verification, so we tell them to put it through. We just take it on the chin [in terms of it being logged as a declined claim].
“The main cause of declined claims is the individual not meeting the definition of disability, in that they are still able to do their job, with or without modifications,” Moxham continues.
“Also, work-related factors represent a significant contributor. But just because a claim is turned down, doesn’t mean that’s where it ends. Group insurers will often pay for treatment and/or make ex gratia payments. And even though there might not be enough medical evidence to support a claim, they’ll often dig deeper and, through this, might discover underlying mental health issues that weren’t previously identified.”
Ellis adds: “The fundamentally different way that group and individual protection policies are administered and underwritten leads to different claims experiences. Claims paid rates are therefore not comparable across the product sets.
“While they are a strong indication of the value of individual protection, they are not a good indicator of the value provided by group protection.”
All industry data reported by GRiD shows that almost 40 per cent of all claims submitted last year were able to go back to work because of early intervention, of which 47 per cent received help to overcome mental illness.
Group insurers say such outcomes are valued by both the employer and employee., but they cannot be measured in a “claims paid” rate as they are not progressed to a traditional claims assessment. “Maybe start calling it an early intervention service, instead of group income protection,” suggests McLoughlin.
Last, but certainly not least, portability. Group protection only lasts as long as the individual is with that employer. “I consider group protection through the employer as rented protection,” says Harper.
