During what is often a very stressful period in people’s lives, it’s good to know what to expect - and that help is at hand.
The handling of life insurance claims came under scrutiny in early 2016 following allegations that the Commonwealth Bank's life insurance arm – CommInsure, had denied heart attack claims based on outdated policy definitions.
Quite understandably, the scandal rattled many consumers’ confidence in life cover. However, our money regulator ASIC undertook a review of life insurance industry. It found that across the full suite of life insurance products including income protection, Total and Permanent Disability (TPD) and trauma cover, “90% of claims are paid in the first instance”1. When it focused solely on life insurance, ASIC found only 4% of claims were declined2.
So the good news is that the vast majority of claims are paid out and last year alone, around $8.2 billion was paid out in life insurance policies3.
Managing the process
On a practical level, the real hurdle for many people is that claims on life insurance are usually made at a time of tremendous personal grief when it can be hard to think straight. It’s also a process most people have never been through before, or had experience with, so it can be hard to know where to start.
So, while it may sound like a depressing topic (and hopefully, you won’t ever have to claim on your insurance cover), it’s worth understanding the process involved. Not only does this makes things easier for you or your loved ones, it may also help to reduce any unnecessary delays in the payout stage.