Life event: Claims process for personal insurance
A recent review conducted by ASIC of 15 life insurers’* personal insurance claims data in 2015/16 found that approximately 90% of claims were paid in the first instance and roughly $8.2billion in net policy payments were made. But what was actually involved in these claims from start to finish?
Making a claiming on your personal insurances, at a time that is both financially and emotionally stressful, can be a daunting process. We help you better understand what may be involved by taking a look at the steps commonly associated with making a claim.
In a nutshell, the claims process follows three main steps and a fourth step depending on the type of personal insurance policy being claimed:
1. Information. In the case where an unfortunate event does occur, notify your financial adviser of the intent to make a claim on a personal insurance policy. Your financial adviser can then liaise with the insurer on your behalf to start the claims process. The insurer will then send out a claims kit that will include a claim form to be completed and details of things they require from you, such as supporting documentation.
2. Assessment. The actual assessment of your claim begins once you’ve completed the kit and sent it back to the insurer. The insurer’s claims team will assess your claim based on the facts you provide in the claim form and any relevant supporting documents, like medical reports*^ and workplace or vocational assessments. Your claims manager may contact you and your financial adviser if they need further information or specific assessments to assess your claim.
3. Decision. Having completed the assessment, the insurer makes a decision on your claim. The time-frames on when a decision is made will vary depending on the type of claim you’re making and how complex it is. Most claims are straightforward – in these cases the whole process, from start to finish, may take as little as a few weeks; however, in some cases, claims may be more complex and could subsequently take months. In rare instances, claims can be declined, for example, if you didn’t disclose a pre-existing medical condition when you applied for cover or you have not triggered the relevant criteria for a payout.
4. Management. In some circumstances, claims may require ongoing management and assessment. For example, if you have an Income Protection, Key Person Income or Business Expenses/Overheads claim these policies pay a monthly benefit amount, not a one-off lump sum amount. Consequently, you’ll stay in contact with your case manager while you’re on claim as continuous periodic assessment may be required to continue the receipt of payments.
Important things to consider
We hope that you never have to experience an unfortunate event that leads to you needing to make a claim and activating your ‘Plan B’, but we are here to help if such a circumstance does arise. Or if you are a little hazy on your personal insurance cover then revisit your Product Disclosure Statement as a reference – and, talk to us. And remember, it's important to regularly review your personal insurances as your circumstances change.
*Representing over 90% of the market by insurance premiums collected.
*^If you need a doctor’s report it could take up to four weeks or even longer for specialists to put your report together. Waiting on reports is one of the main reasons for delays in claims being processed.
Source: Sound Life Financial Services Financial Knowledge Centre
The information contained in this blog is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial planner.
Sound Life & Superannuation Agencies Pty Ltd trading as Sound Life Financial Services are
Corporate Authorised Representatives of Synchronised Business Services Pty Ltd
ABN: 33 007 207 650 trading as SYNCHRON
Principal address: Level 1, 65 Palmerston Crescent, South Melbourne Vic 3051
Australian Financial Services License Number: 243 313