Cedric E. Stephens, Contributor

Question: I am a young, highly trained professional. In 2004, I developed a very rare illness called fibromyalgia. This was after suffering injuries in a car accident. The condition is very debilitating. There is no known cure. I have had to stop working. In 2003, I bought an income- replacement policy. I surrendered it and submitted a claim on November 1, 2007. The insurer says they do not have a precedent for settling my claim. They need a few weeks to research the matter! Can you please help me? I need to get my money as quickly as possible.

- D.L., Kingston 5.

Answer: Your question also forced me to carry out research. Frankly, I knew zilch about income-replacement insurance! Add to that my ignorance about your disorder.

The penny finally dropped when I looked at an article from the franchise known as Lloyd's. It was about a Dutch wine maker. He had insured his nose for the princely sum of euro5 million (J$561.1 million). His sense of smell is vital to wine making. Anything that hampers the ability of his nose to detect millions of different scents will threaten his income.

The policy you were sold was to restore the income you earn as a professional. That is why it is labelled as income replacement. Americans use the term disability-income insurance. The basis for it is that there is a risk of becoming disabled, permanently or temporarily. When this happens, earnings may be reduced or come to a complete stop. In the US, it is estimated that at the age of 40, the risk of becoming disabled for 90 days or more, prior to the age 65 is 43 per cent. Claims are triggered by the inability to practise one's profession or business.

Your policy is most reader-unfriendly - even for me! The insurer uses language that would make an 18th-century lawyer feel at home in today's world. Even more surprising, there is no guide to tell buyers what information is needed to settle claims. There was at least one typographical error. There should be a great demand for this type of insurance. However, the contract and back-room processes need make-overs before it is offered to 21st-century buyers like you.

You Need A Proof of Loss

In order to have your claim paid quickly, you need to do two things. The first is to present your insurers with written evidence from your doctor that describes his or her diagnosis, when it was made, and outlines the treatment you have been receiving. It should also state the prognosis for the illness. Bear in mind that the company will have its own medical specialist. It is very likely that they will refer your physician's report to him or her for a second opinion given the rarity of your disorder.

Your second task will be to provide the insurers with convincing evidence about your loss of income. The challenge will be to prove, based on actual data, what you would have earned during the last three years had there been no injury. The difference between that figure and the amount you earned should be your loss of income. In other words: you need to prove your loss.

Maximum benefit

After reading section 2 of the contract - Payment of Income Benefits - two things are clear. Payment will be made in "monthly instalments in arrears." The second is that there is a maximum benefit. Apparently, it bears no relationship to the face amount on the policy. Everything else is clear as mud! I learned that you were sent a cheque representing about one-third of the face amount. Since the letter that came with it was written on the assumption that you are an 18th-century lawyer, may I suggest that you write a letter to your insurer with the aim of finding out full details of how the payment was calculated and if and when further payments can be expected.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. If you need free information or counsel to help you solve a problem write to The Financial Editor or contact Mr. Stephens directly at aegis@cwjamaica.com