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Life Insurance Claims

Want to find out how to make a life insurance claim? Learn about the process with Savvy today.

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, updated on July 19th, 2023       

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Life Insurance Banner - A woman holding flowers placing her hand on a coffin at a funeral

Understanding how life insurance claims work and finding a policy with a seamless and straightforward process can be a real time-saver. By knowing about how this process works, you can prepare your beneficiaries for when you pass away or know the steps to take when claiming on a trauma or income protection policy.

You can find out all about the steps involved in the life insurance claims process, as well as what you may or may not be able to claim for, right here with Savvy. Read our handy guide to claiming on your policy to learn all the key details today.

How do I make a life insurance claim and what do I need to provide?

The process of making a life insurance claim is straightforward. However, it can differ depending on the type of insurance you purchase and who you purchase it through. 

Claiming in the event of death

In terms of what information will need to be supplied for a term life cover claim, your beneficiary will first need to provide the original policy document and schedule. On top of this and a completed claim form submitted to your insurer, they'll also likely be asked for the following:

  1. Death certificate or Medical Attendant's Certificate to show evidence the life assured passed away and provide relevant details of their death
  2. Copy of a document showing the life assured's date of birth, such as a driver's licence, passport or birth certificate
  3. Copy of a document to provide proof of the claimant's identity and relationship to the life assured, such as a driver's licence, passport or birth certificate

Copies of documentation regarding the identity of the life assured and claimant must be certified, meaning they're witnessed and signed by an individual such as a Justice of the Peace, solicitor, doctor or police officer. 

Claiming in the event of illness, injury or disablement

You'll need to gather up some supporting evidence which can help substantiate your claim. In addition to a copy of your policy and schedule and proof of your identity, you'll typically need to provide your insurer with the following information:

  1. Details surrounding the injury, illness, critical illness or disablement, including when, where and how it happened
  2. Detailed description of how your injury or illness has stopped you from performing your usual job (if applicable)
  3. Any relevant work or medical history
  4. Contact details for your doctor or any other medical professionals or specialists with whom you've consulted
  5. Proof of your wages before you were injured or became sick (if applicable)

There’s no time limit as such when making a life insurance claim. However, Australian laws say you need to file a claim within six years of an incident occurring, or three years if you live in the Northern Territory. Individual insurance companies may have their own timeframes which you must follow, so it's important to check with them if you're unsure of how much time you may have to make a claim.

How are life insurance claims assessed?

After you submit your life insurance claim, your provider will assess it based on your version of events and the evidence you’ve been able to provide. This assessment can take some time, with the type and complexity of your claim, along with how quickly you were able to provide information, impacting the time it may take to have your claim assessed.

During this process, your insurer may require further documentation or information from you to help them assess your situation accurately, so they'll contact you if they require you to provide more to help substantiate your life insurance claim. 

Once your insurer has completed the assessment of your claim, they’ll notify you or your beneficiary of their decision to either pay your covered amount or reject it. It’s important to read over your policy’s Product Disclosure Statement (PDS) so you can get a complete picture of what’s included in your coverage and what isn’t. This will help you avoid filing a claim for something your insurance doesn’t cover.

What are some of the things I can and can’t claim for under my life insurance policy?

What you can claim on life insurance depends on the type of policy you purchase. For example, a loved one can claim for your death through a term life insurance policy, but they won’t be able to claim for loss of wages due to a debilitating injury under the same policy. Becasue of this, it pays to make sure you’re across what’s included in your policy before you buy. It's also important to note that all coverage will be subject to your insurer's terms and conditions.

  1. Life cover: can provide a lump sum payout for the death of the life assured, with the payout able to be used to cover your funeral, everyday costs and loan or mortgage repayments. A claim can also be made if you’re diagnosed with a covered terminal illness and given under two years to live.
  2. Income protection insurance: can cover up to 70% of your usual wage if you’re unable to work due to an injury or illness. You can receive benefits for up to five years, depending on the benefit period you selected on your policy.
  3. Total and permanent disability (TPD) insurance: can cover disability which affects your ability to work. This can either be Own Occupation cover (unable to return to your current job, but able to complete other work relevant to your qualifications and experience) or Any Occupation cover (unable to complete any work relevant to your qualifications and experience).
  4. Trauma cover: if you’re diagnosed with a critical illness or injured in a major accident which is covered by your policy, you can make a claim on your trauma cover policy. This may include diagnoses of cancer, heart conditions, head trauma and cardiovascular diseases, although this will depend on your insurer's terms and conditions.

Life insurance companies also have a list of general exclusions which are effectively universal across most providers. However, it’s still a good idea to check what won’t be covered in your PDS, as coverage for pre-existing medical conditions can sometimes vary depending on who you buy through. Some of the common reasons why life insurance won’t pay out include:

  1. Acting irresponsibly or carelessly, such as driving recklessly or not seeking appropriate medical treatment
  2. Travelling to a country against Australian travel warnings. Make sure you check with the federal government’s Smartraveller website to see if your destination has a travel advisory against it.
  3. Illegal activity that results in your death won’t be covered by your insurer. For example, if you break road rules and die in a traffic accident, you wouldn’t necessarily have your policy paid out.
  4. Life insurance providers won’t pay out if your death is a result of suicide inside the first 13 months of holding your policy (subject to your insurer's terms and conditions).
  5. You won’t be covered if you purchase a policy and you already have a terminal illness.

It's always important to check with your insurer when buying your policy so you can be sure of what is and isn't covered and make any claims accordingly.

Frequently asked questions about life insurance claims

How long does the claims process usually take to complete?

The length of the process depends on several factors, such as the type of insurance and the complexity of the claim. In many cases, these can be settled within a couple of weeks, but this may be longer if your insurer requires more information.

How are life insurance claim payouts made?

Life insurance payouts are made in lump sums and are paid either to you or the nominated beneficiary, or beneficiaries, listed on your policy. Some insurers offer advance payments on life cover policies to help your family access funds for funeral expenses and other end of life costs.

Do I need to pay tax on a life cover claim payout?

Whether your life cover payout is taxable depends on who it goes to. It generally isn't subject to any tax if your beneficiary is a financial dependent, such as your child or partner. However, if you've listed a business partner or financially dependent child as your beneficiary, they'll likely have to pay tax on the lump sum.

How many beneficiaries can I name on my life insurance policy?

In most cases, you're allowed you to list up to five beneficiaries on your policy. It’s worth remembering that adding more beneficiaries can complicate the claims process and make it more difficult, so clearly outlining what proportion of your payout each beneficiary receives may help sidestep this potential issue.

Can I claim on multiple life insurance policies in Australia?

If you have multiple life insurance policies, you may be able to make claims on them concurrently so long as you stick to each of their terms and conditions. For example, you’ll generally have to disclose that you already have a life insurance policy which you’ve claimed under before claiming on another policy.

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Compare life insurance policies side-by-side

Through Savvy, you can consider a range of competitive life insurance policies from reputable insurers, whether you're after life, income protection, trauma or TPD cover. Get the ball rolling on comparing your available options today!

Disclaimer:

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.

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