The Simfuni platform can be configured to automatically cancel policies if they get too far into arrears. Your organization will specify how many days past due policies can go before policy cancellation is triggered, as well as what communications the system should generate to notify the client that they are at risk of cancellation.
Arrears Cancellation Process
On the day that a client's first missed payment is confirmed as declined (usually the day after the payment was attempted, as this is when Simfuni can be sure it wasn't processed):
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- The policy is 1 day past due and displays the Overdue status.
- The missed payment displays in the Past Payments tab of the policy with the Declined status.
- The missed payment is rescheduled in the Upcoming Payments tab of the policy. If the policy premium is paid weekly or fortnightly then the missed payment is stacked onto the client's next payment, to be re-attempted on their next scheduled payment day, or if the policy premium is paid monthly or quarterly then the missed payment is scheduled to be re-attempted in 14 days' time.
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- The configured "Missed payment" comms are generated to notify the client.
- The policy displays in the Arrears Worklist.
- If more payments are missed then the above steps repeat and the number of days past due increases, until the client reaches the configured cut-off day (x number of days past due).
- On the cut-off day:
- The policy is automatically cancelled, with an outstanding underpaid closing balance of x days' worth of premiums.
- The policy cancellation status is Underpaid.
- The policy displays a cancellation banner that shows the Underpaid status and closing balance.
- The configured "Cancellation effective" comms are generated to notify the client.
- The policy displays in the Cancellation Worklist.
Overdue amount vs closing balance:
Overdue policies that are paid on term based billing (for example, each week start with a $0 balance, are billed $10, then go back to a $0 balance after the successful weekly payment) include within the overdue total an instalment that was billed to cover the upcoming payment period. When calculating the closing balance on the cancellation date, the system excludes this last overdue instalment that was intended for future coverage. Consequently, the calculated cancellation balance may be lower than the final attempted instalment amount.
If a client has had their policy cancelled but would like it to be reinstated, there is functionality available to do so. You can find more information on policy reinstatement in this article.