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Making a life insurance claim is an important process for policyholders and beneficiaries to get to grips with. Whether you're about to make a claim, or are making sure your next of kin is familiar with the process, here are the simple steps to keep in mind.
If you need to lodge a life insurance claim, you'll usually need to follow these steps:
The relevant life insurance policy will have details of who to contact about a claim. You may be able to find details of the insurer you need via the deceased's bank statements.
If you can't locate a policy, The Financial Services Council (FSC) could help you out. They can reach out to their life insurance members and asking them to check their records.
You can usually let the insurer know you want to make a claim by calling them or by sending an email. They will let you know about the required documentation that you'll need to gather. You'll typically need to confirm:
They'll need this and other information (such as a note from a GP, for example) ahead of any pay-out being made to a beneficiary or beneficiaries.
Once you've completed the claim form, submit it to your insurer. They will let you know if any additional details are required. Straightforward claims may take a couple of weeks to process. It can take months, however, for more complex cases to be finalised before any payment can be issued.
Good to know. If your claim is for an ongoing income protection payment, may need to maintain your policy by updating your insurer with your health status.
ASIC tracks the claims related disputes performance for Australian insurers. The tables below show claims and related dispute information for death cover bought directly from insurers, through advisers and held within a superannuation fund between 1 January 2018 and 31 December 2018.
| Insurer | Claims accepted rate | Average claim time (months) | Disputes per 100,000 lives insured | Policy cancellation rate |
|---|---|---|---|---|
| AIA | * | * | * | 21.00% |
| AMP | * | * | * | 17.50% |
| Allianz | * | * | * | 13.10% |
| ClearView | 97.70% | 2.4 | 3.8 | 16.60% |
| CommInsure | 93.30% | 4.1 | 22.2 | 14.20% |
| HCF | * | * | * | 12.70% |
| Hallmark | * | * | * | 32.10% |
| Hannover Re | 89.70% | 1.1 | 8.3 | 10.70% |
| Industry Average | 88.00% | 3.3 | 15.7 | 15.20% |
| MLC | * | * | * | 16.00% |
| MetLife | * | * | * | 14.20% |
| NobleOak | * | * | * | 9.60% |
| OnePath | 94.50% | 5.4 | 66.6 | 18.00% |
| St Andrews | 85.50% | 2.3 | 0 | 22.60% |
| Suncorp/Asteron | 88.00% | 3.6 | 29.4 | 17.20% |
| Swiss Re | 90.90% | 3.1 | 1.5 | 9.30% |
| TAL | 72.80% | 3.1 | 18.9 | 24.50% |
| Westpac | 94.60% | 3.1 | 8.3 | 13.30% |
| Zurich | 94.30% | 2.4 | 14.1 | 16.60% |
*The number of finalised claims is too small to provide a reliable result.
| Insurer | Claims accepted rate | Average claim time (months) | Disputes per 100,000 lives insured | Policy cancellation rate |
|---|---|---|---|---|
| AIA | 97.40% | 2.3 | 9.4 | 15.20% |
| AMP | 97.50% | 5.4 | 7 | 17.00% |
| ClearView | * | * | * | 15.20% |
| CommInsure | 88.50% | 2.1 | 11.5 | 14.80% |
| Hallmark | * | * | * | 19.40% |
| Industry Average | 96.30% | 3.1 | 7 | 16.00% |
| MLC | 97.90% | 2.4 | 6 | 18.00% |
| MetLife | * | * | * | 25.60% |
| NobleOak | * | * | * | 4.70% |
| OnePath | 96.50% | 4.3 | 5.6 | 16.70% |
| QBE/Integrity | * | * | * | 0.00% |
| Suncorp/Asteron | 97.20% | 1.9 | 8.8 | 15.10% |
| TAL | 98.40% | 0.9 | 9.2 | 13.50% |
| Westpac | 95.00% | 2.2 | 2.6 | 15.20% |
| Zurich | 96.30% | 1.4 | 5.8 | 14.30% |
* The number of finalised claims is too small to provide a reliable result.
| Insurer | Claims accepted rate | Average claim time (months) | Disputes per 100,000 lives insured |
|---|---|---|---|
| AIA | 98.50% | 0.8 | 1 |
| AMP | 99.90% | 8.4 | 0.4 |
| CommInsure | 96.50% | 1.3 | 0.8 |
| Hannover Re | 97.60% | 0.9 | 1.1 |
| Industry Average | 98.20% | 1.3 | 0.8 |
| MLC | 99.10% | 0.7 | 0.4 |
| MetLife | 99.60% | 0.8 | 0.4 |
| OnePath | 97.10% | 1.2 | 1.6 |
| QInsure | 93.50% | 1.7 | 1.5 |
| Suncorp/Asteron | 94.00% | 1 | 0 |
| TAL | 98.50% | 0.8 | 0.7 |
| Westpac | 98.40% | 1.6 | 0.5 |
Note: The policy cancellation rate is not shown for the superannuation fund sales channel as changes are mainly due to superannuation trustees changing the insurer of the fund.
Here are some key considerations into account when making a life insurance claim:
In the event of a complaint or dispute you should look at taking the following steps:
A common cause of life insurance disputes revolves around pre-existing medical conditions. Each year, the AFCA is contacted by hundreds of cases of people following their income protection claim being rejected. The life insurance company has usually rejected the claim due to the policyholder not letting them know about a pre-existing medical condition related to their claim.
These cases highlight the sheer importance of disclosing all known information to insurers before signing the contract of insurance. Many applicants will withhold details of pre-existing conditions or lifestyle habit in an attempt to save on their policy premiums. As part of the insureds duty of disclosure, it is their responsibility to state all known information regarding pre-existing medical conditions to their insurer to avoid this situation occurring.
A pre-existing medical condition is commonly recognised as any condition:
Under the insurance contract act of 1984, each applicant is required to state every matter that they know, or would be expected to know that is relevant to the insureds decision to provide cover and at what rate. Each applicant will be required to answer questions during the application regarding their health, occupation and lifestyle. It is safer to contact your insurer to discuss any matter that you are unsure about disclosing during the policy application to avoid any surprises at claim time.
It is important to remember that life insurance benefit payout is not taxable at the time of a claim, if the nominated beneficiaries are financially dependent on you. These generally include:
If you have nominated specific individuals as the benefactor of your life insurance policy and they are not financially dependent on you, there may be some tax implications and we'd encourage you to speak with a tax specialist.
Read more about whether or not life insurance is tax deductible.
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