Making a life insurance claim

Who to contact

Moneysmart puts it simply: speak to the person or company you bought the policy from.

• Bought from an insurer: contact the insurance company.
• Through an insurance broker or financial adviser: speak to them first.
• Through a super fund: contact the fund.
• Through an employment arrangement: speak to your employer.

Ask how the claims process works and which forms you need, and have the policy number ready. If you are struggling physically or emotionally, Moneysmart suggests asking a trusted friend or family member to help with the process.

If someone has died and you are not sure what cover they held, it may have been through a super fund, an employer or a separate policy. Money from old life insurance policies can also turn up in Moneysmart’s unclaimed money search; those claims go through the life insurer that originally held the policy.

What you may be asked for

Depending on the kind of cover, Moneysmart lists:

• medical reports and test results from your doctor
• details of your work duties, including physical requirements and the hours you work each week
• payslips and tax returns, or financial statements if you are self-employed
• if a person has died, a death certificate or a medical report listing the cause of death

The insurer may ask permission to contact your doctor, and you may be asked to attend an independent medical examination. For income-related claims, if illness or injury keeps affecting your ability to earn, you may need regular assessments and progress claim forms.

The Code adds some limits on the insurer’s side. Each time you make a new claim, it asks for your consent to collect information about your finances, job or health, and tells you each time it uses that consent unless you ask it not to. It asks for what it reasonably needs as soon as possible and keeps repeat requests to a minimum. If you tell the insurer you are having trouble providing information, it will work with you on a solution, which may include collecting the information for you with your permission.

The claim, ring by ring

These are the Code’s own timeframes, in the order you meet them. A Business Day is Monday to Friday, except public holidays.

1. The Claim Received Date

   The date the insurer records receiving the first piece of information, though not necessarily all of it, that lets it start assessing the claim. The clock starts here.

   Code, definitions

2. Within 10 Business Days

   The insurer tells you how to access the Code, what your cover is and any waiting periods, the relevant benefits under the policy, and how the claims process works.

   Clause 5.5

3. At least every 20 Business Days

   An update on progress, unless you (or your representative, or the owner of a group policy) agree to a different timeframe. If you ask about the claim at any point, the insurer responds within 10 Business Days.

   Clauses 5.6 and 5.7

4. Within 20 Business Days of a request

   When the insurer needs a medical or financial report, it asks the provider to deliver it within this time, and tells you if the provider misses it.

   Clause 5.55

5. Within 15 Business Days of having everything

   Once the insurer has all the information it reasonably needs and has finished its enquiries, it tells you its decision in writing. A decision means admitting, declining or closing the claim.

   Clauses 5.50 and 5.51

6. 2 months: income-related claims

   A decision on an income-related claim, such as income protection, within 2 months of the Claim Received Date or, if later, the end of the waiting period.

   Clause 5.48

7. 6 months: lump sum claims

   A decision on a lump sum claim, such as a death benefit, within 6 months of the Claim Received Date or, if later, the end of any waiting period.

   Clause 5.49

When the clock can stretch

The Code allows for “Circumstances Beyond Our Control”. They include the insurer not yet having information it reasonably asked for from you, your doctor or a government agency; you not responding to reasonable requests; the insurer being unable to contact you; you asking for a delay; and a reasonable suspicion of non-disclosure or fraud that needs more investigation. A delay waiting on a reinsurer is not one of them.

If those circumstances are likely to push a decision past the 2-month or 6-month mark, the insurer tells you in writing what they are before the deadline, updates you at least every 20 Business Days, and tells you how to complain. If a final decision looks likely to take more than 12 months, the claim goes to a senior member of staff or a review committee, and you are told the outcome in writing.

If you need money while you wait

Moneysmart suggests speaking to the insurer or super fund if you need urgent financial help while a claim is assessed. They will consider your circumstances and may be able to speed up the decision or make an advance payment. You will need documents that show the need, such as bank or Centrelink statements, and any advance may reduce the final payout.

Under the Code, once the insurer has all the evidence it needs for a request like this, it lets you know within 5 Business Days what help it can offer, and that you can ask it to review that decision.

Claims after a death

Moneysmart suggests contacting the insurer as soon as possible to find out whether a claim can be made; the insurer can explain the documents it needs. If a death claim is accepted, the Code says the insurer will tell you if it may not be able to pay until the person’s representatives have obtained probate or letters of administration.

Cover held inside super is usually paid as part of a super death benefit, and the fund decides who receives it under super law, its own rules and any nomination. That is a separate process with its own timeframes, which vary between funds. Who can receive the money is covered in who receives the money.

If the claim is declined

The Code says the insurer tells you in writing:

• its reasons, and a summary of the information it relied on
• where a pre-existing condition is the reason, the medical connection between that condition and your claim
• that you can ask for copies of the documents it relied on, which it sends within 10 Business Days of your request (to you, or to your doctor if it thinks that more appropriate)
• that you can ask it to review the decision or give it more information
• how its complaints process works.

You or the policy owner can ask the insurer to reopen or reassess a closed or declined claim. If it agrees, there is a new Claim Received Date and the Code’s timeframes start again. If you are not satisfied with the process or the decision, Moneysmart suggests complaining to the insurer or super fund as soon as you can, and then to AFCA if you can’t reach agreement. The steps are in when something goes wrong.

When a claim is paid

For an accepted claim that is not income-related and is worth at least $25,000, the Code says the insurer will suggest you consider independent financial advice to help manage the payment, unless the benefit is paid to a super trustee. For ongoing income-related benefits, payment is due by the later of the due date or 5 Business Days after the insurer has everything it reasonably needs to decide to pay.

Claims through super can take longer

The Code does not apply to super fund trustees unless they have adopted it. Moneysmart’s claims comparison tool, which shows how long insurers take to decide claims, notes that its figures leave out the time a super fund takes to process a claim, and that the total time can be significantly longer. For a death benefit claim, Moneysmart suggests asking the fund what stage the claim is at and what it still needs.